[Federal Register Volume 87, Number 142 (Tuesday, July 26, 2022)]
[Proposed Rules]
[Pages 44502-44843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-15372]
[[Page 44501]]
Vol. 87
Tuesday,
No. 142
July 26, 2022
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
42 CFR Part 405, 410, 411, et al.
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Organ Acquisition; Rural Emergency Hospitals: Payment
Policies, Conditions of Participation, Provider Enrollment, Physician
Self-Referral; New Service Category for Hospital Outpatient Department
Prior Authorization Process; Overall Hospital Quality Star Rating;
Proposed Rule
Federal Register / Vol. 87 , No. 142 / Tuesday, July 26, 2022 /
Proposed Rules
[[Page 44502]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 411, 412, 413, 416, 419, and 424
[CMS-1772-P]
RIN 0938-AU82
Medicare Program: Hospital Outpatient Prospective Payment and
Ambulatory Surgical Center Payment Systems and Quality Reporting
Programs; Organ Acquisition; Rural Emergency Hospitals: Payment
Policies, Conditions of Participation, Provider Enrollment, Physician
Self-Referral; New Service Category for Hospital Outpatient Department
Prior Authorization Process; Overall Hospital Quality Star Rating
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would revise the Medicare hospital
outpatient prospective payment system (OPPS) and the Medicare
ambulatory surgical center (ASC) payment system for Calendar Year (CY)
2023 based on our continuing experience with these systems. In this
proposed rule, 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 proposed
rule would update and refine the requirements for the Hospital
Outpatient Quality Reporting (OQR) Program, the ASC Quality Reporting
(ASCQR) Program, and the Rural Emergency Hospital Quality Reporting
(REH) Program. We are also proposing updates to the requirements for
Organ Acquisition, Rural Emergency Hospitals, Prior Authorization, and
Overall Hospital Quality Star Rating. We are establishing a new
provider type for rural emergency hospitals (REHs), and we have
proposals regarding payment policy, quality measures, and enrollment
policy for REHs. Finally, we are soliciting comments on the use of CMS
data to drive competition in healthcare marketplaces, and an
alternative methodology for counting organs.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by September 13, 2022.
ADDRESSES: In commenting, please refer to file code CMS-1772-P.
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-1772-P, 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-1772-P, 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:
Elise Barringer, [email protected] or 410-786-9222.
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact
the HOP Panel mailbox at [email protected].
Ambulatory Surgical Center (ASC) Payment System, contact Scott
Talaga via email at [email protected] or Mitali Dayal via email
at [email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Administration, Validation, and Reconsideration Issues, contact Anita
Bhatia via email at [email protected].
Ambulatory Surgical Center Quality Reporting (ASCQR) Program
Measures, contact Cyra Duncan via email [email protected].
Blood and Blood Products, contact Josh McFeeters via email at
[email protected].
Cancer Hospital Payments, contact Scott Talaga via email at
[email protected].
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck
Braver via email at [email protected].
Composite APCs (Low Dose Brachytherapy and Multiple Imaging),
contact Au'Sha Washington via email at [email protected].
Comprehensive APCs (C-APCs), contact Mitali Dayal via email at
[email protected].
Hospital Inpatient Quality Reporting Program--Administration
Issues, contact Julia Venanzi at [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 Emily Yoder via email at
[email protected].
Inpatient Only (IPO) Procedures List, contact Abigail Cesnik at
[email protected].
Mental Health Services Furnished Remotely by Hospital Staff To
Beneficiaries in Their Homes, Emily Yoder 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
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].
[[Page 44503]]
Organ Acquisition Payment Policies, contact Katie Lucas via email
at [email protected], or Mandy Michael via email at
[email protected], or Kellie Shannon via email at
[email protected].
Outpatient Department Prior Authorization Process, contact Yuliya
Cook via email at [email protected].
Overall Hospital Quality Star Rating, contact Tyson Nakashima 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].
Request for Information on Use of CMS Data to Drive Competition in
Healthcare Marketplaces, contact Terri Postma via email at
[email protected].
Rural Emergency Hospital Provider Enrollment, contact Frank Whelan
via email at [email protected].
Rural Emergency Hospital Quality Reporting (REHQR) Program Issues,
contact Anita Bhatia via email at [email protected].
Rural Emergency Hospitals (REH) Physician Self-Referral Law Update
Issues, contact Lisa O. Wilson via email at [email protected] or
Matthew Edgar via email at [email protected].
Skin Substitutes, contact Josh McFeeters via email at
[email protected].
Use of the Medicare Outpatient Observation Notice by REHs, contact
Nishamarie Sherry via email at [email protected] or Janet
Miller 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 proposed rule, 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 on the CY 2022 OPPS/ASC Final Rule
With Comment Period
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
B. Proposed Conversion Factor Update
C. Proposed Wage Index Changes
D. Proposed Statewide Average Default Cost-to-Charge Ratios
(CCRs)
E. Proposed Adjustment for Rural Sole Community Hospitals (SCHs)
and Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2023
F. Proposed Payment Adjustment for Certain Cancer Hospitals for
CY 2023
G. Proposed Hospital Outpatient Outlier Payments
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
I. Proposed Beneficiary Copayments
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New and Revised HCPCS Codes
B. Proposed OPPS Changes--Variations Within APCs
C. Proposed New Technology APCs
D. Universal Low Volume APC Policy for Clinical and
Brachytherapy APCs
E. OPPS APC-Specific Policies
IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payment for Devices
B. Proposal to Publicly Post OPPS Device Pass-Through
Applications
C. Proposed Device-Intensive Procedures
V. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals
B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals Without Pass-Through Payment Status
C. Proposal in Physician Fee Schedule Proposed Rule To Require
HOPDs and ASCs to Report Discarded Amounts of Certain Single-Dose or
Single-Use Package Drugs
VI. Proposed Estimate of OPPS Transitional Pass-Through Spending for
Drugs, Biologicals, Radiopharmaceuticals, and Devices
A. Amount of Additional Payment and Limit on Aggregate Annual
Adjustment
B. Proposed Estimate of Pass-Through Spending for CY 2023
VII. Proposed OPPS Payment for Hospital Outpatient Visits and
Critical Care Services
VIII. Proposed Payment for Partial Hospitalization Services
A. Background
B. Proposed PHP APC Update for CY 2023
C. Outpatient Non-PHP Mental Health Services Furnished Remotely
to Partial Hospitalization Patients After the COVID-19 PHE
D. Outlier Policy for CMHCs
IX. Proposed Services That Will Be Paid Only as Inpatient Services
A. Background
B. Proposed Changes to the Inpatient Only (IPO) List
X. Nonrecurring Policy Changes
A. Mental Health Services Furnished Remotely by Hospital Staff
to Beneficiaries in Their Homes
[[Page 44504]]
B. Comment Solicitation on Intensive Outpatient Mental Health
Treatment, Including Substance Use Disorder (SUD) Treatment
Furnished by Intensive Outpatient Programs (IOPs)
C. Direct Supervision of Certain Cardiac and Pulmonary
Rehabilitation Services by Interactive Communications Technology
D. Use of Claims Data for CY 2023 OPPS and ASC Payment System
Ratesetting Due to the PHE
E. Supervision by Nonphysician Practitioners of Hospital and CAH
Diagnostic Services Furnished to Outpatients
F. Coding and Payment for Category B Investigational Device
Exemption Clinical Studies and Devices
G. OPPS Payment for Software as a Service
H. Proposed Payment Adjustments Under the IPPS and OPPS for
Domestic NIOSH Approved Surgical N95 Respirators
I. Proposal To Exempt Rural Sole Community Hospitals From the
Method To Control Unnecessary Increases in the Volume of Clinic
Visit Services Furnished in Excepted Off-Campus Provider-Based
Departments (PBDs)
XI. Proposed CY 2023 OPPS Payment Status and Comment Indicators
A. Proposed CY 2023 OPPS Payment Status Indicator Definitions
B. Proposed CY 2023 Comment Indicator Definitions
XII. MedPAC Recommendations
A. Proposed OPPS Payment Rates Update
B. Proposed ASC Conversion Factor Update
C. Proposed ASC Cost Data
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC)
Payment System
A. Background
B. Proposed ASC Treatment of New and Revised Codes
C. Proposed Update to the List of ASC Covered Surgical
Procedures and Covered Ancillary Services
D. Proposed Update and Payment for ASC Covered Surgical
Procedures and Covered Ancillary Services
E. ASC Payment System Policy for Non-Opioid Pain Management
Drugs and Biologicals That Function as Surgical Supplies
F. Proposed New Technology Intraocular Lenses (NTIOLs)
G. Proposed ASC Payment and Comment Indicators
H. Proposed Calculation of the ASC Payment Rates and the ASC
Conversion Factor
XIV. Requirements for the Hospital Outpatient Quality Reporting
(OQR) Program
A. Background
B. Hospital OQR Program Quality Measures
C. Administrative Requirements
D. Form, Manner, and Timing of Data Submitted for the Hospital
OQR Program
E. Payment Reduction for Hospitals That Fail To Meet the
Hospital OQR Program Requirements for the CY 2023 Payment
Determination
XV. Requirements for the Ambulatory Surgical Center Quality
Reporting (ASCQR) Program
A. Background
B. ASCQR Program Quality Measures
C. Administrative Requirements
D. Form, Manner, and Timing of Data Submitted for the ASCQR
Program
E. Proposed Payment Reduction for ASCs That Fail To Meet the
ASCQR Program Requirements
XVI. Requirements for the Rural Emergency Hospital Quality Reporting
(REHQR) Program
A. Background
B. REHQR Program Quality Measures
C. Quality Reporting Requirements Under the REH Quality
Reporting (REHQR) Program
XVII. Organ Acquisition Payment Policy
A. Background of Organ Acquisition Payment Policies
B. Counting Research Organs To Calculate Medicare's Share of
Organ Acquisition Costs
C. Costs of Certain Services Furnished to Potential Deceased
Donors
D. Technical Corrections and Clarifications to 42 CFR 405.1801,
412.100, 413.198, 413.402, 413.404, 413.420 and Nomenclature Changes
to 42 CFR 412.100 and 42 CFR Part 413, Subpart L
E. Clarification of Allocation of Administrative and General
Costs
F. Organ Payment Policy--Request for Information on Counting
Organs for Medicare's Share of Organ Acquisition Costs, IOPO Kidney
SACs, and Reconciliation of All Organs for IOPOs
XVIII. Rural Emergency Hospitals (REH): Payment Policies, Conditions
of Participation, Provider Enrollment, Use of the Medicare
Outpatient Observation Notice, and Physician Self-Referral Updates
A. Rural Emergency Hospitals (REH) Payment Policies
B. REH Conditions of Participation
C. REH Provider Enrollment
D. Use of the Medicare Outpatient Observation Notice by REHs
E. Physician Self-Referral Updates
XIX. Request for Information on Use of CMS Data To Drive Competition
in Healthcare Marketplaces
A. Background
B. Request for Public Comment
XX. Addition of a New Service Category for Hospital Outpatient
Department (OPD) Prior Authorization Process
A. Background
B. Controlling Unnecessary Increases in the Volume of Covered
OPD Services
XXI. Overall Hospital Quality Star Rating
A. Background
B. Veterans Health Administration Hospitals
C. Frequency of Publication and Data Used
D. Overall Hospital Quality Star Ratings Suppression
XXII. Files Available to the Public via the Internet
XXIII. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
B. ICRs for the Hospital OQR Program
C. ICRs for the ASCQR Program
D. ICRs for Rural Emergency Hospitals (REH) Physician Self-
Referral Law Update
E. ICRs for Addition of a New Service Category for Hospital
Outpatient Department (OPD) Prior Authorization Process
F. ICRs for Proposed Payment Adjustments for NIOSH-Approved
Domestic Surgical N95 Respirators
G. ICRs for Proposed REH Provider Enrollment Requirements
XXIV. Response to Comments
XXV. Economic Analyses
A. Statement of Need
B. Overall Impact of Provisions of This Proposed Rule
C. Detailed Economic Analyses
D. Regulatory Review Costs
E. Regulatory Flexibility Act (RFA) Analysis
F. Unfunded Mandates Reform Act Analysis
G. Conclusion
H. Federalism Analysis
Regulations Text
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
In this proposed rule, we propose to update the payment policies
and payment rates for services furnished to Medicare beneficiaries in
hospital outpatient departments (HOPDs) and ambulatory surgical centers
(ASCs), beginning January 1, 2023. 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 of the Department of Health and Human
Services (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 practice, changes in technology, and the
addition of new services, new cost data, and other relevant information
and factors. In addition, under section 1833(i)(D)(v) of the Act, we
annually review and update the ASC payment rates. This proposed rule
also includes additional policy changes made in accordance with our
experience with the OPPS and the ASC payment system and recent changes
in our statutory authority. We describe these and various other
statutory authorities in the relevant sections of this proposed rule.
In addition, this proposed rule would update and refine the
requirements for the Hospital Outpatient Quality
[[Page 44505]]
Reporting (OQR) Program and the ASC Quality Reporting (ASCQR) Program.
We are also proposing updates to the requirements for Organ
Acquisition, Prior Authorization, and Overall Hospital Quality Star
Rating. We are also proposing new regulatory requirements to codify
payment policy, quality measures, and enrollment policy for Rural
Emergency Hospitals. Finally, we are soliciting comments on the use of
CMS data to drive competition in healthcare marketplaces, and a Request
for Information on an alternative methodology for counting organs.
2. Summary of the Major Provisions
OPPS Update: For 2023, we propose to increase the payment
rates under the OPPS by an Outpatient Department (OPD) fee schedule
increase factor of 2.7 percent. This proposed increase factor is based
on the proposed hospital inpatient market basket percentage increase of
3.1 percent for inpatient services paid under the hospital inpatient
prospective payment system (IPPS) reduced by a proposed productivity
adjustment of 0.4 percentage point. Based on this update, we estimate
that total payments to OPPS providers (including beneficiary cost-
sharing and estimated changes in enrollment, utilization, and case-mix)
for calendar year (CY) 2023 would be approximately $86.2 billion, an
increase of approximately $6.2 billion compared to estimated CY 2022
OPPS payments.
We propose to continue to implement the statutory 2.0 percentage
point reduction in payments for hospitals that fail to meet the
hospital outpatient quality reporting requirements by applying a
reporting factor of 0.9805 to the OPPS payments and copayments for all
applicable services.
Data used in CY 2023 OPPS/ASC Ratesetting: To set CY 2023
OPPS and ASC payment rates, we would normally use the most updated
claims and cost report data available. The best available claims data
is the most recent set of data which would be from 2 years prior to the
calendar year that is the subject of rulemaking. Therefore, we are
proposing to use the CY 2021 claims data to set CY 2023 OPPS and ASC
rates. However, cost report data usually lags the claims data by a year
and CMS believes that the CY 2020 cost report data are not the best
overall approximation of expected outpatient hospital services as the
majority of the cost reports we would typically use for CY 2023 rate
setting have cost reporting periods that overlap with parts of the CY
2020 Public Health Emergency (PHE). In order to mitigate the impact of
some of the temporary changes in hospitals cost report data from CY
2020, we propose to use cost report data from the June 2020 extract
from Healthcare Cost Report Information System (HCRIS), which includes
cost report data from prior to the PHE. This is the same cost report
extract we used to set OPPS rates for CY 2022. We believe using the CY
2021 claims data with cost reports data through CY 2019 (prior to the
PHE) for CY 2023 OPPS ratesetting is the best approximation of expected
costs for CY 2023 hospital outpatient services for ratesetting
purposes. As a result, CMS is proposing to use CY 2021 claims data with
cost reports with cost reporting periods prior to the PHE to set CY
2023 OPPS and ASC payment system rates.
Partial Hospitalization Update: For CY 2023, we propose to
calculate the CMHC and hospital-based PHP (HB PHP) geometric mean per
diem costs consistent with our existing methodology, except that while
we propose to use the latest available CY 2021 claims data, we propose
to continue to use the cost data that was available for the CY 2021
rulemaking.
Changes to the Inpatient Only (IPO) List: For 2023, we
propose to remove ten services from the Inpatient Only list.
340B-Acquired Drugs: For CY 2023, we formally propose at
this time 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. This
proposal is in accordance with the policy choices and calculations that
CMS made in the months leading up to publication of this proposed rule
before the Supreme Court issued its decision in American Hospital
Association v. Becerra (Docket 20-1114). However, we note that, in
light of the Supreme Court's recent decision in American Hospital
Association v. Becerra, we fully anticipate applying a rate of ASP + 6
percent to such drugs and biologicals in the final rule for CY 2023 and
making a corresponding decrease to the conversion factor consistent
with the OPPS statute and our longstanding policy that this adjustment
is made in a budget neutral manner. We are still evaluating how to
apply the Supreme Court's recent decision to prior calendar years. In
that decision, the Court summarized the parties' arguments regarding
budget neutrality and stated that, ``[a]t this stage, we need not
address potential remedies.'' We are interested in public comments on
the best way to craft any potential remedies affecting cost years 2018-
2022 given that the Court did not resolve that issue.
Device Pass-Through Payment Applications: For CY 2023, we
received 8 applications for device pass-through payments. We solicit
public comment on these applications and will make final determinations
on these applications in the CY 2023 OPPS/ASC final rule. Beginning for
OPPS device pass-through applications received on or after January 1,
2023, we propose to publicly post online the completed application
forms and related materials that we receive from applicants, excluding
certain copyrighted or other materials that applicants indicate cannot
otherwise be released to the public.
Cancer Hospital Payment Adjustment: For CY 2023, we
propose to continue providing 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
proposed to use a target PCR of 0.89 to determine the CY 2023 cancer
hospital payment adjustment to be paid at cost report settlement. That
is, the payment adjustments would 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 propose
to adopt a policy to update the ASC payment system using the hospital
market basket update. Using the hospital market basket methodology, for
CY 2023, we propose to increase payment rates under the ASC payment
system by 2.7 percent for ASCs that meet the quality reporting
requirements under the ASCQR Program. This proposed increase is based
on a hospital market basket percentage increase of 3.1 percent reduced
by a productivity adjustment of 0.4 percentage point. Based on this
proposed update, we estimate that total payments to ASCs (including
beneficiary cost-sharing and estimated changes in enrollment,
utilization, and case-mix) for CY 2023 would be approximately 5.4
billion, an increase of approximately 130 million compared to estimated
CY 2022 Medicare payments.
Changes to the List of ASC Covered Surgical Procedures:
For CY 2023, we propose to add one procedure, a lymph node biopsy or
excision, to the ASC CPL based upon existing criteria at Sec. 416.166.
[[Page 44506]]
Hospital Outpatient Quality Reporting (OQR) Program: For
the Hospital OQR Program measure set, we are proposing to: (1) add a
data validation targeting criterion to our existing four targeting
criteria that reads: ``Any hospital with a two-tailed confidence
interval that is less than 75 percent, and that had less than four
quarters of data due to receiving an ECE for one or more quarters,''
beginning with the CY 2023 reporting period/CY 2025 payment
determination; (2) align patient encounter quarters with the calendar
year, beginning with the CY 2024 reporting period/CY 2026 payment
determination; and (3) change the Cataracts: Improvement in Patient's
Visual Function within 90 Days Following Cataract Surgery (OP-31)
Measure from Mandatory to Voluntary Beginning with the CY 2027 Payment
Determination. We are requesting comment on the future readoption of
the Hospital Outpatient Volume on Selected Outpatient Surgical
Procedures (OP-26) measure or another volume indicator in the Hospital
OQR Program.
Ambulatory Surgical Center Quality Reporting (ASCQR)
Program: For the ASCQR Program measure set, we are proposing to change
the Cataracts: Improvement in Patient's Visual Function within 90 Days
Following Cataract Surgery (ASC-11) Measure from Mandatory to Voluntary
Beginning with the CY 2027 Payment Determination. We are also
requesting comment on: (1) the potential future implementation of a
measures value pathways approach in the ASCQR Program; (2) the status
and feasibility of interoperability initiatives in the ASCQR Program;
and (3) the potential readoption of the ASC Facility Volume Data on
Selected ASC Surgical Procedures (ASC-7) measure or another volume
indicator in the ASCQR Program. We are also proposing to suspend
mandatory implementation of the ASC-11 measure.
Organ acquisition payment policy: We are issuing a Request
for Information on counting Medicare organs for use in calculating
Medicare's share of organ acquisition costs, rather than making a
proposal, and will use the information to inform potential future
rulemaking. Also, we propose to exclude research organs from the
calculation of Medicare's share of organ acquisition costs and require
a cost offset; these proposals would help ensure that Medicare does not
share in the cost of research, and would lower the cost of procuring
and providing research organs to the research community. Finally, we
propose to cover as organ acquisition costs certain hospital costs
typically incurred when donors die from cardiac death, to promote organ
procurement and enhance equity.
Rural Emergency Hospitals (REH): Provider Enrollment: We
are outlining provider enrollment requirements for REHs. The most
important of these is that REHs must comply with all applicable
provider enrollment provisions in 42 CFR part 424, subpart P in order
to enroll in Medicare.
Rural Emergency Hospitals (REH) Physician Self-Referral
Law Update: We propose (1) a new exception for ownership or investment
interests in an REH; and (2) revisions to certain existing exceptions
to make them applicable to compensation arrangements to which an REH is
a party.
Rural Emergency Hospital Quality Reporting (REHQR)
Program: For the REHQR Program, we are proposing to require a
QualityNet account and Security Official (SO) requirement in line with
other quality programs for purposes of data submission and access of
facility level reports. We are also requesting information on: (1)
measures recommended by the National Advisory Committee on Rural Health
and Human Services and additional suggested measures for the REHQR
Program, and (2) and comments on rural telehealth, behavioral and
mental health, and maternal health services.
Overall Hospital Quality Star Ratings: For the Overall
Hospital Quality Star Ratings, we are: (1) providing information on the
previously finalized policy for inclusion of quality measure data from
Veteran's Health Administration hospitals; (2) proposing to amend Sec.
412.190(c) to state the use of publicly available measure results on
Hospital Compare or its successor websites from a quarter within the
prior 12 months (instead of the ``prior year''); and (3) conveying that
although CMS intends to publish Overall Hospital Quality Star Ratings
in 2023, we may apply the suppression policy discussed in the CY 2021
OPPS/ASC proposed rule (85 FR 48996 through 49027) should data analysis
demonstrate that the COVID-19 Public Health Emergency (PHE)
substantially affects the underlying measure data.
REH Payment Policy: Section 125 of the Consolidated
Appropriations Act of 2021 (CAA) established a new provider type called
Rural Emergency Hospitals (REHs), effective January 1, 2023.
REHs are facilities that convert from either a critical access
hospital (CAH) or a rural hospital (or one treated as such under
section 1886(d)(8)(E) of the Social Security Act) with less than 50
beds, and that do not provide acute care inpatient services with the
exception of post-hospital extended care services furnished in a unit
of the facility that is a distinct part licensed as a skilled nursing
facility. By statute, REH services include emergency department
services and observation care and, at the election of the REH, other
outpatient medical and health services furnished on an outpatient
basis, as specified by the Secretary through rulemaking.
By statute, covered outpatient department services provided by REHs
will receive an additional 5 percent payment for each service.
Beneficiaries will not be charged a copayment on the additional 5
percent payment.
We are proposing to consider all covered outpatient department
services, other than inpatient hospital services as described in
section 1833(t)(1)(B)(ii), that would otherwise be paid under the OPPS
as REH services. REHs would be paid for furnishing REH services at a
rate that is equal to the OPPS payment rate for the equivalent covered
outpatient department service increased by 5 percent. We are also
proposing that REHs may provide outpatient services that are not
otherwise paid under the OPPS (such as services paid under the Clinical
Lab Fee Schedule) as well as post-hospital extended care services
furnished in a unit of the facility that is a distinct part of the
facility licensed as a skilled nursing facility; however, these
services would not be considered REH services and therefore would be
paid under the applicable fee schedule and would not receive the
additional 5 percent payment increase that CMS proposes to apply to REH
services.
Finally, we are proposing that REHs would also receive a monthly
facility payment. After the initial payment is established in CY 2023,
the payment amount will increase in subsequent years by the hospital
market basket percentage increase.
Proposed Addition of a New Service Category for Hospital
Outpatient Department Prior Authorization Process: We propose to add
facet joint interventions as a category of services to the prior
authorization process for hospital outpatient departments beginning for
dates of service on or after March 1, 2023.
Mental Health Services Furnished Remotely by Hospital
Staff to Beneficiaries in Their Homes: For CY 2023, CMS is proposing to
consider mental health services furnished remotely by hospital staff
using communications technology to beneficiaries in their homes as
covered outpatient department services payable under the OPPS and would
create OPPS-specific coding for these services.
[[Page 44507]]
We are proposing to require an in-person service within 6 months prior
to the initiation of the remote service and then every 12 months
thereafter, that exceptions to the in-person visit requirement may be
made based on beneficiary circumstances (with the reason documented in
the patient's medical record), and that more frequent visits are also
allowed under our policy, as driven by clinical needs on a case-by-case
basis. We are also proposing that audio-only interactive
telecommunications systems may be used to furnish these services in
instances where the beneficiary is not capable of, or does not consent
to, the use of two-way, audio/video technology.
Supervision by Nonphysician Practitioners of Hospital and
CAH Diagnostic Services Furnished to Outpatients: For CY 2023, to
improve clarity, we propose to replace cross-references at Sec.
410.27(a)(1)(iv)(A) and (B) and Sec. 410.28(e) to the definitions of
general and personal supervision at Sec. 410.32(b)(3)(i) and (iii)
with the text of those definitions. We also propose to revise Sec.
410.28(e) to clarify that certain nonphysician practitioners (nurse
practitioners, physician assistants, clinical nurse specialists and
certified nurse midwifes) may supervise the performance of diagnostic
tests to the extent they are authorized to do so under their scope of
practice and applicable State law.
Exemption of Rural Sole Community Hospitals (SCH) from the
Method to Control Unnecessary Increases in the Volume of Clinic Visit
Services Furnished in Excepted Off-Campus Provider-Based Departments
(PBDs): We are proposing to exempt rural Sole Community Hospitals
(rural SCHs) from the site-specific Medicare Physician Fee Schedule
(PFS)-equivalent payment for the clinic visit service, as described by
HCPCS code G0463, when provided at an off-campus PBD excepted from
section 1833(t)(21) of the Act (departments that bill the modifier
``PO'' on claim lines).
Proposed Payment Adjustments under the IPPS and OPPS for
Domestic NIOSH-Approved Surgical N95 Respirators: As discussed in
section X.H of the preamble of this proposed rule, the Biden-Harris
Administration has made it a priority to ensure America is prepared to
continue to respond to COVID-19, and to combat future pandemics. To
improve hospital preparedness and readiness for future threats, we are
proposing to provide payment adjustments to hospitals under the IPPS
and OPPS for the additional resource costs they incur to acquire
domestic NIOSH-approved surgical N95 respirators. These surgical
respirators, which faced severe shortage at the onset of the COVID-19
pandemic, are essential for the protection of beneficiaries and
hospital personnel that interface with patients. The Department of
Health and Human Services (HHS) recognizes that procurement of domestic
NIOSH-approved surgical N95 respirators, while critical to pandemic
preparedness and protecting health care workers and patients, can
result in additional resource costs for hospitals. The proposed payment
adjustments would account for these additional resource costs.
We believe the proposed payment adjustments would help achieve a
strategic policy goal, namely, sustaining a level of supply resilience
for surgical N95 respirators that is critical to protect the health and
safety of personnel and patients in a public health emergency. We are
proposing that the payment adjustments would commence for cost
reporting periods beginning on or after January 1, 2023.
3. Summary of Costs and Benefits
In section XXIII of this proposed rule, we set forth a detailed
analysis of the regulatory and federalism impacts that the changes
would have on affected entities and beneficiaries. Key estimated
impacts are described below.
a. Impacts of All OPPS Changes
Table 84 in section XXIII.C of this proposed rule displays the
distributional impact of all the OPPS changes on various groups of
hospitals and CMHCs for CY 2023 compared to all estimated OPPS payments
in CY 2022. We estimate that the policies in this proposed rule would
result in a 2.9 percent overall increase in OPPS payments to providers.
We estimate that total OPPS payments for CY 2023, including beneficiary
cost-sharing, to the approximately 3,502 facilities paid under the OPPS
(including general acute care hospitals, children's hospitals, cancer
hospitals, and CMHCs) will increase by approximately $1.8 billion
compared to CY 2022 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 an 8.4 percent decrease in CY 2023
payments to CMHCs relative to their CY 2022 payments.
b. Impacts of the Updated Wage Indexes
We estimate that our update of the wage indexes based on the FY
2023 IPPS proposed rule wage indexes would result in no change for
urban hospitals under the OPPS and no change for rural hospitals. These
wage indexes include the continued implementation of the OMB labor
market area delineations based on 2010 Decennial Census data, with
updates, as discussed in section II.C of this proposed rule.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment
Adjustment
There are no significant impacts of our CY 2023 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 2023 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 2023 is 0.89, equivalent to the 0.89
target PCR for CY 2022, and therefore has no budget neutrality
adjustment.
d. Impacts of the OPD Fee Schedule Increase Factor
For the CY 2023 OPPS/ASC, we are establishing an OPD fee schedule
increase factor of 2.7 percent and applying that increase factor to the
conversion factor for CY 2023. We note that the following estimated
changes are based on the formal proposal discussed in V.B of this
proposed rule. However, we are making available online alternative
impact tables and other supporting data associated with the alternative
policy for 340B-acquired drugs.
As a result of the OPD fee schedule increase factor and other
budget neutrality adjustments, we estimate that urban hospitals would
experience an increase in payments of approximately 3.0 percent and
that rural hospitals would experience an increase in payments of 2.6
percent. Classifying hospitals by teaching status, we estimate
nonteaching hospitals will experience an increase in payments of 3.2
percent, minor teaching hospitals would experience an increase in
payments of 3.0 percent, and major teaching hospitals would experience
an increase in payments of 2.6 percent. We also classified hospitals by
the type of ownership. We estimate that hospitals with voluntary
ownership would
[[Page 44508]]
experience an increase of 2.8 percent in payments, while hospitals with
government ownership would experience an increase of 2.8 percent in
payments. We estimate that hospitals with proprietary ownership would
experience an increase of 3.5 percent in payments.
e. Impacts of the Proposed ASC Payment Update
For impact purposes, the surgical procedures on the ASC covered
surgical procedure list are aggregated into surgical specialty groups
using CPT and HCPCS code range definitions. The percentage change in
estimated total payments by specialty groups under the CY 2023 payment
rates, compared to estimated CY 2022 payment rates, generally ranges
between an increase of 1 and 6 percent, depending on the service, with
some exceptions. We estimate the impact of applying the hospital market
basket update to ASC payment rates would increase payments by $130
million under the ASC payment system in CY 2023.
B. Legislative and Regulatory Authority for the Hospital OPPS
When Title XVIII of the Act was enacted, Medicare payment for
hospital outpatient services was based on hospital-specific costs. In
an effort to ensure that Medicare and its beneficiaries pay
appropriately for services and to encourage more efficient delivery of
care, the Congress mandated replacement of the reasonable cost-based
payment methodology with a prospective payment system (PPS). The
Balanced Budget Act of 1997 (BBA) (Pub. L. 105-33) added section
1833(t) to the Act, authorizing implementation of a PPS for hospital
outpatient services. The OPPS was first implemented for services
furnished on or after August 1, 2000. Implementing regulations for the
OPPS are located at 42 CFR parts 410 and 419.
The Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA) (Pub. L. 106-113) made major changes in the hospital OPPS.
The following Acts made additional changes to the OPPS: the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA) (Pub. L. 106-554); the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003 (MMA) (Pub. L. 108-173); the Deficit
Reduction Act of 2005 (DRA) (Pub. L. 109-171), enacted on February 8,
2006; the Medicare Improvements and Extension Act under Division B of
Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA)
(Pub. L. 109-432), enacted on December 20, 2006; the Medicare,
Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173),
enacted on December 29, 2007; the Medicare Improvements for Patients
and Providers Act of 2008 (MIPPA) (Pub. L. 110-275), enacted on July
15, 2008; the Patient Protection and Affordable Care Act (Pub. L. 111-
148), enacted on March 23, 2010, as amended by the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152), enacted on
March 30, 2010 (these two public laws are collectively known as the
Affordable Care Act); the Medicare and Medicaid Extenders Act of 2010
(MMEA, Pub. L. 111-309); the Temporary Payroll Tax Cut Continuation Act
of 2011 (TPTCCA, Pub. L. 112-78), enacted on December 23, 2011; the
Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA, Pub. L.
112-96), enacted on February 22, 2012; the American Taxpayer Relief Act
of 2012 (Pub. L. 112-240), enacted January 2, 2013; the Pathway for SGR
Reform Act of 2013 (Pub. L. 113-67) enacted on December 26, 2013; the
Protecting Access to Medicare Act of 2014 (PAMA, Pub. L. 113-93),
enacted on March 27, 2014; the Medicare Access and CHIP Reauthorization
Act (MACRA) of 2015 (Pub. L. 114-10), enacted April 16, 2015; the
Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted November 2,
2015; the Consolidated Appropriations Act, 2016 (Pub. L. 114-113),
enacted on December 18, 2015, the 21st Century Cures Act (Pub. L. 114-
255), enacted on December 13, 2016; the Consolidated Appropriations
Act, 2018 (Pub. L. 115-141), enacted on March 23, 2018; the Substance
Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for
Patients and Communities Act (Pub. L. 115-271), enacted on October 24,
2018; the Further Consolidated Appropriations Act, 2020 (Pub. L. 116-
94), enacted on December 20, 2019; the Coronavirus Aid, Relief, and
Economic Security Act (Pub. L. 116-136), enacted on March 27, 2020; and
the Consolidated Appropriations Act, 2021 (Pub. L. 116-260), enacted on
December 27, 2020.
Under the OPPS, we generally pay for hospital Part B services on a
rate-per-service basis that varies according to the APC group to which
the service is assigned. We use the Healthcare Common Procedure Coding
System (HCPCS) (which includes certain Current Procedural Terminology
(CPT) codes) to identify and group the services within each APC. The
OPPS includes payment for most hospital outpatient services, except
those identified in section I.C of this proposed rule. Section
1833(t)(1)(B) of the Act provides for payment under the OPPS for
hospital outpatient services designated by the Secretary (which
includes partial hospitalization services furnished by CMHCs), and
certain inpatient hospital services that are paid under Medicare Part
B.
The OPPS rate is an unadjusted national payment amount that
includes the Medicare payment and the beneficiary copayment. This rate
is divided into a labor-related amount and a nonlabor-related amount.
The labor-related amount is adjusted for area wage differences using
the hospital inpatient wage index value for the locality in which the
hospital or CMHC is located.
All services and items within an APC group are comparable
clinically and with respect to resource use, as required by section
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of
the Act, subject to certain exceptions, items and services within an
APC group cannot be considered comparable with respect to the use of
resources if the highest median cost (or mean cost, if elected by the
Secretary) for an item or service in the APC group is more than 2 times
greater than the lowest median cost (or mean cost, if elected by the
Secretary) for an item or service within the same APC group (referred
to as the ``2 times rule''). In implementing this provision, we
generally use the cost of the item or service assigned to an APC group.
For new technology items and services, special payments under the
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
provides for temporary additional payments, which we refer to as
``transitional pass-through payments,'' for at least 2 but not more
than 3 years for certain drugs, biological agents, brachytherapy
devices used for the treatment of cancer, and categories of other
medical devices. For new technology services that are not eligible for
transitional pass-through payments, and for which we lack sufficient
clinical information and cost data to appropriately assign them to a
clinical APC group, we have established special APC groups based on
costs, which we refer to as New Technology APCs. These New Technology
APCs are designated by cost bands which allow us to provide appropriate
and consistent payment for designated new procedures that are not yet
reflected in our claims data. Similar to pass-through payments, an
assignment to a New Technology APC is temporary; that is, we retain a
service within a New Technology APC until we acquire sufficient data to
assign it to a clinically appropriate APC group.
[[Page 44509]]
C. Excluded OPPS Services and Hospitals
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
designate the hospital outpatient services that are paid under the
OPPS. While most hospital outpatient services are payable under the
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
ambulance, physical and occupational therapy, and speech-language
pathology services, for which payment is made under a fee schedule. It
also excludes screening mammography, diagnostic mammography, and
effective January 1, 2011, an annual wellness visit providing
personalized prevention plan services. The Secretary exercises the
authority granted under the statute to also exclude from the OPPS
certain services that are paid under fee schedules or other payment
systems. Such excluded services include, for example, the professional
services of physicians and nonphysician practitioners paid under the
Medicare Physician Fee Schedule (MPFS); certain laboratory services
paid under the Clinical Laboratory Fee Schedule (CLFS); services for
beneficiaries with end-stage renal disease (ESRD) that are paid under
the ESRD prospective payment system; and services and procedures that
require an inpatient stay that are paid under the hospital IPPS. In
addition, section 1833(t)(1)(B)(v) of the Act does not include
applicable items and services (as defined in subparagraph (A) of
paragraph (21)) that are furnished on or after January 1, 2017 by an
off-campus outpatient department of a provider (as defined in
subparagraph (B) of paragraph (21)). We set forth the services that are
excluded from payment under the OPPS in regulations at 42 CFR 419.22.
Under Sec. 419.20(b) of the regulations, we specify the types of
hospitals that are excluded from payment under the OPPS. These excluded
hospitals are:
Critical access hospitals (CAHs);
Hospitals located in Maryland and paid under Maryland's
All-Payer or Total Cost of Care Model;
Hospitals located outside of the 50 States, the District
of Columbia, and Puerto Rico; and
Indian Health Service (IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS, not less often than 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/AdvisorPanelAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
The Panel has held many meetings, with the last meeting taking
place on August 22, 2021. 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
[[Page 44510]]
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 section, and the FACA
database at http://facadatabase.gov.
F. Public Comments Received on the CY 2022 OPPS/ASC Final Rule With
Comment Period
We received approximately 13 timely pieces of correspondence on the
CY 2022 OPPS/ASC final rule with comment period that appeared in the
Federal Register on November 16, 2021 (86 FR 63458)
II. Proposed Updates Affecting OPPS Payments
A. Proposed Recalibration of APC Relative Payment Weights
1. Database Construction
a. Use of CY 2021 Data in the CY 2023 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 2 years prior to the
calendar year that is the subject of the rulemaking. As discussed in
further detail in section X.C of this proposed rule, unlike CY 2020
claims data, we do not believe there are overwhelming concerns with CY
2021 claims data as a result of the COVID-19 PHE. Therefore, as
discussed in further detail in section X.C of this proposed rule, we
propose to use CY 2021 claims data and the data components related to
it in establishing the CY 2023 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 2023 OPPS, we propose to recalibrate the APC relative
payment weights for services furnished on or after January 1, 2023, and
before January 1, 2024 (CY 2023), using the same basic methodology that
we described in the CY 2022 OPPS/ASC final rule with comment period (86
FR 63466), using CY 2021 claims data. That is, we propose to
recalibrate the relative payment weights for each APC based on claims
and cost report data for hospital outpatient department (HOPD) services
to construct a database for calculating APC group weights.
For the purpose of recalibrating the proposed APC relative payment
weights for CY 2023, 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, 2021, and before January 1, 2022, 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 2023 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
2023 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 2023 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 2023. The proposed list of bypass codes
contains codes that are reported on claims for services in CY 2021 and,
therefore, includes codes that were in effect in CY 2021 and used for
billing. We propose to retain deleted bypass codes on the proposed CY
2023 bypass list because these codes existed in CY 2021 and were
covered OPD services in that period, and CY 2021 claims data were used
to calculate proposed CY 2023 payment rates. Keeping these deleted
bypass codes on the bypass list potentially allows us to create more
``pseudo'' single procedure claims for ratesetting purposes. ``Overlap
bypass codes'' that are members of the proposed multiple imaging
composite APCs are identified by asterisks (*) in the third column of
Addendum N to this proposed rule. HCPCS codes that we propose to add
for CY 2023 are identified by asterisks (*) in the fourth column of
Addendum N.
c. Calculation and Use of Cost-to-Charge Ratios (CCRs)
For CY 2023, we propose to continue to use the hospital-specific
overall ancillary and departmental cost-to-charge ratios (CCRs) to
convert charges to estimated costs through application of a revenue
code-to-cost center crosswalk. However, roughly half of the cost
reports we would typically use for CY 2023 ratesetting purposes are
from cost reporting periods that overlap with parts of CY 2020. When
utilizing this cost report data, more than half of the APC geometric
mean costs increased by more than 10 percent relative to estimates
based on prior ratesetting cycles. While some of this increase may be
attributable to changes that will continue into CY 2023, other aspects
of those changes may be more specific to the COVID-19 PHE. In the CY
2022 OPPS/ASC final rule with comment period (86 FR 63751 through
63754), we
[[Page 44511]]
described how CY 2020 claims data were too influenced by the COVID-19
PHE to be utilized for setting CY 2022 OPPS payment rates. After
reviewing the cost report data from the December 2021 HCRIS data set,
we believe cost report data that overlap with CY 2020 are also too
influenced by the COVID-19 PHE for purposes of calculating the CY 2023
OPPS payment rates. Therefore, in order to mitigate the impact on our
ratesetting process from the COVID-19 PHE effects in the CY 2020 cost
report data we would typically use for this CY 2023 OPPS/ASC proposed
rule, we propose to use cost report data from the June 2020 HCRIS data
set, which only includes cost report data through CY 2019 for CY 2023
OPPS/ASC proposed rule and final rule ratesetting purposes. For
additional discussion of the data we propose to use in CY 2023 OPPS
ratesetting, please see section X.C of this proposed rule.
To calculate the APC costs on which the CY 2023 APC payment rates
are based, we propose to calculate hospital-specific overall ancillary
CCRs and hospital-specific departmental CCRs for each hospital for
which we had CY 2021 claims data by comparing these claims data to
hospital cost reports available for the CY 2022 OPPS/ASC final rule
with comment period ratesetting, which, in most cases, are from CY
2019. For the proposed CY 2023 OPPS payment rates, we propose to use CY
2021 claims processed through December 31, 2021. 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 2021 (the year of claims data we used to calculate the proposed
CY 2023 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 propose to 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.
Additionally, we have historically not included cost report lines for
certain nonstandard cost centers in the OPPS ratesetting database
construction when hospitals have reported these nonstandard cost
centers on cost report lines that do not correspond to the cost center
number. We have determined that hospitals are routinely reporting a
number of nonstandard cost centers in this way and that including this
additional data could significantly reduce certain APC geometric mean
costs. In particular, we estimate that the additional cost data from
nonstandard cost centers would decrease the geometric mean cost of APC
8004 (Ultrasound Composite) by 20 percent, APC 5863 (Partial
Hospitalizations (3 or more services) for hospital-based PHPs) by 12
percent and APC 5573 (Level 3 Imaging with Contrast) by 11 percent. In
other instances, we note that there are also potential increases in the
geometric mean costs of certain APCs, such as APC 5741 (Level 1
Electronic Analysis of Devices), which would increase by 4 percent, APC
5723 (Level 3 Diagnostic Tests and Related Services), which would
increase by 2.6 percent, and APC 5694 (Level 4 Drug Administration),
which would increase by 2.3 percent.
While we generally view the use of additional cost data as
improving our OPPS ratesetting process, we have historically not
included cost report lines for certain nonstandard cost centers in the
OPPS ratesetting database construction when hospitals have reported
these nonstandard cost centers on cost report lines that do not
correspond to the cost center number. Additionally, we are concerned
about the significant changes in APC geometric mean costs that our
analysis indicates would occur if we were to include such lines. We
believe it is important to further investigate the accuracy of these
cost report data before including such data in the ratesetting process.
Further, we believe it is appropriate to gather additional information
from the public as well before including them in OPPS ratesetting. For
CY 2023, we propose not to include the nonstandard cost centers
reported in this way in the OPPS ratesetting database construction. We
are soliciting comment on whether there exist any specific concerns
with regards to the accuracy of the data from these nonstandard cost
center lines that we would need to consider before including them in
future OPPS ratesetting.
For a discussion of the hospital-specific overall ancillary CCR
calculation, we refer readers to the CY 2007 OPPS/ASC final rule with
comment period (71 FR 67983 through 67985). The calculation of blood
costs is a longstanding exception (since the CY 2005 OPPS) to this
general methodology for calculation of CCRs used for converting charges
to costs on each claim. This exception is discussed in detail in the CY
2007 OPPS/ASC final rule with comment period and discussed further in
section II.A.2.a.(1) of this proposed rule.
2. Proposed Data Development and Calculation of Costs Used for
Ratesetting
In this section of this proposed rule, we discuss the use of claims
to calculate the OPPS payment rates for CY 2023. The Hospital OPPS page
on the CMS website on which the CY 2023 OPPS/ASC proposed rule is
posted (http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html) provides an accounting of claims used
in the development of the proposed payment rates. That accounting
provides additional detail regarding the number of claims derived at
each stage of the process. In addition, later in this section we
discuss the file of claims that comprises the data set that is
available upon payment of an administrative fee under a CMS data use
agreement. The CMS website, http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html, includes
information about obtaining the ``OPPS Limited Data Set,'' which now
includes the additional variables previously available only in the OPPS
Identifiable Data Set, including ICD-10-CM diagnosis codes and revenue
code payment amounts. This file is derived from the CY 2021 claims that
are used to calculate the proposed payment rates for this CY 2023
proposed rule.
Previously, the OPPS established the scaled relative weights on
which payments are based using APC median costs, a process described in
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188).
However, as discussed in more detail in section II.A.2.f of the CY 2013
OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we
finalized the use of geometric mean costs to calculate the relative
weights on which the CY 2013 OPPS payment rates were based. While this
policy changed the cost metric on which the relative payments are
based, the data process in general remained the same under the
methodologies that we used to obtain appropriate claims data and
accurate cost information in determining estimated service cost.
We used the methodology described in sections II.A.2.a through
II.A.2.c of this proposed rule to calculate the costs we used to
establish the proposed
[[Page 44512]]
relative payment weights used in calculating the OPPS payment rates for
CY 2023 shown in Addenda A and B to this proposed rule (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 proposed rule for a discussion of the conversion
of APC costs to scaled payment weights.
We note that under the OPPS, CY 2019 was the first year in which
the claims data used for setting payment rates (CY 2017 data) contained
lines with the modifier ``PN'', which indicates nonexcepted items and
services furnished and billed by off-campus provider-based departments
(PBDs) of hospitals. Because nonexcepted items and 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 2023 OPPS, we
would continue to remove claim lines with modifier ``PN'' from the
ratesetting process.
For details of the claims accounting process used in the CY 2023
OPPS/ASC proposed rule, we refer readers to the claims accounting
narrative under supporting documentation for the CY 2023 OPPS/ASC
proposed rule 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 propose to continue to establish payment rates for blood and
blood products using our blood-specific CCR methodology, which utilizes
actual or simulated CCRs from the most recently available hospital cost
reports to convert hospital charges for blood and blood products to
costs. This methodology has been our standard ratesetting methodology
for blood and blood products since CY 2005. It was developed in
response to data analysis indicating that there was a significant
difference in CCRs for those hospitals with and without blood-specific
cost centers, and past public comments indicating that the former OPPS
policy of defaulting to the overall hospital CCR for hospitals not
reporting a blood-specific cost center often resulted in an
underestimation of the true hospital costs for blood and blood
products. Specifically, to address the differences in CCRs and to
better reflect hospitals' costs, we propose to continue to simulate
blood CCRs for each hospital that does not report a blood cost center
by calculating the ratio of the blood-specific CCRs to hospitals'
overall CCRs for those hospitals that do report costs and charges for
blood cost centers. We also propose to apply this mean ratio to the
overall CCRs of hospitals not reporting costs and charges for blood
cost centers on their cost reports to simulate blood-specific CCRs for
those hospitals. We propose to calculate the costs upon which the
proposed CY 2023 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 2023 would result in costs for blood and blood products that
appropriately reflect the relative estimated costs of these products
for hospitals without blood cost centers and, therefore, for these
blood products in general.
We note that we defined a comprehensive APC (C-APC) as a
classification for the provision of a primary service and all
adjunctive services provided to support the delivery of the primary
service. Under this policy, we include the costs of blood and blood
products when calculating the overall costs of these C-APCs. We propose
to continue to apply the blood-specific CCR methodology described in
this section when calculating the costs of the blood and blood products
that appear on claims with services assigned to the C-APCs. Because the
costs of blood and blood products would be reflected in the overall
costs of the C-APCs (and, as a result, in the proposed payment rates of
the C-APCs), we propose not to make separate payments for blood and
blood products when they appear on the same claims as services assigned
to the C-APCs (we refer readers to the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66795 through 66796) for 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 this proposed rule (which is
available via the internet on the CMS website) for the proposed CY 2023
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 2023, we propose to continue to establish payment rates for
blood and blood products using our blood-specific CCR methodology.
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act mandates the creation of
additional groups of covered OPD services that classify devices of
brachytherapy consisting of a seed or seeds (or radioactive source)
(``brachytherapy sources'') separately from other services or groups of
services. The statute provides certain criteria for the additional
groups. For the history of OPPS payment for brachytherapy sources, we
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
final rule with comment period (77 FR 68240 through 68241). As we have
stated in prior OPPS updates, we believe that adopting the general OPPS
prospective payment methodology for brachytherapy sources is
appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable,
[[Page 44513]]
and equitable payment amounts per source across hospitals by averaging
the extremely high and low values, in contrast to payment based on
hospitals' charges adjusted to costs. We believe that the OPPS
methodology, as opposed to payment based on hospitals' charges adjusted
to cost, also would provide hospitals with incentives for efficiency in
the provision of brachytherapy services to Medicare beneficiaries.
Moreover, this approach is consistent with our payment methodology for
the vast majority of items and services paid under the OPPS. We refer
readers to the CY 2016 OPPS/ASC final rule with comment period (80 FR
70323 through 70325) for further discussion of the history of OPPS
payment for brachytherapy sources.
For CY 2023, except where otherwise indicated, we propose to use
the costs derived from CY 2021 claims data to set the proposed CY 2023
payment rates for brachytherapy sources because CY 2021 is the year of
data we propose to use to set the proposed payment rates for most other
items and services that would be paid under the CY 2023 OPPS. With the
exception of the proposed payment rate for brachytherapy source C2645
(Brachytherapy planar source, palladium-103, per square millimeter) and
the proposed payment rates for low-volume brachytherapy APCs discussed
in section III.D of this proposed rule, we propose to base the payment
rates for brachytherapy sources on the geometric mean unit costs for
each source, consistent with the methodology that we propose for other
items and services paid under the OPPS, as discussed in section II.A.2.
of this proposed rule. We also propose to continue the other payment
policies for brachytherapy sources that we finalized and first
implemented in the CY 2010 OPPS/ASC final rule with comment period (74
FR 60537). We propose to pay for the stranded and nonstranded not
otherwise specified (NOS) codes, HCPCS codes C2698 (Brachytherapy
source, stranded, not otherwise specified, per source) and C2699
(Brachytherapy source, non-stranded, not otherwise specified, per
source), at a rate equal to the lowest stranded or nonstranded
prospective payment rate for such sources, respectively, on a per-
source basis (as opposed to, for example, a per mCi), which is based on
the policy we established in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66785). We also propose to continue the policy we
first implemented in the CY 2010 OPPS/ASC final rule with comment
period (74 FR 60537) regarding payment for new brachytherapy sources
for which we have no claims data, based on the same reasons we
discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66786; which was delayed until January 1, 2010, by section 142 of Pub.
L. 110-275). Specifically, this policy is intended to enable us to
assign new HCPCS codes for new brachytherapy sources to their own APCs,
with prospective payment rates set based on our consideration of
external data and other relevant information regarding the expected
costs of the sources to hospitals. The proposed CY 2023 payment rates
for brachytherapy sources are included on Addendum B to this proposed
rule (which is available via the internet on the CMS website) and
identified with status indicator ``U''.
For CY 2018, we assigned status indicator ``U'' (Brachytherapy
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645
(Brachytherapy planar source, palladium-103, per square millimeter) in
the absence of claims data and established a payment rate using
external data (invoice price) at $4.69 per mm\2\. For CY 2019, in the
absence of sufficient claims data, we continued to establish a payment
rate for C2645 at $4.69 per mm\2\. Our CY 2018 claims data available
for the 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 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 and CY 2022 OPPS/ASC final rules (85 FR
85879 through 85880 and 86 FR 63469) 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 and for CY 2022.
We did not receive any CY 2021 claims data for HCPCS code C2645.
Therefore, we propose 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 2023.
Additionally, for CY 2022 and subsequent calendar years, we adopted
a Universal Low Volume APC policy for clinical and brachytherapy APCs,
discussed in further detail in section III.D of this proposed rule. For
these Low Volume APCs, which have fewer than 100 CY 2021 single claims
used for ratesetting purposes in this CY 2023 OPPS/ASC proposed rule,
we use up to 4 years of claims data to establish a payment rate for
each item or service as we historically have done for low volume
services assigned to New Technology APCs. Further, we calculate the
cost for Low Volume APCs based on the greatest of the arithmetic mean
cost, median cost, or geometric mean cost using all claims for the APC
for up to 4 years. For CY 2023, we propose to designate 4 brachytherapy
APCs as Low Volume APCs for CY 2023 as these APCs meet our criteria to
be designated as a Low Volume APC. For more information on the
brachytherapy APCs we are designating as Low Volume APCs, see section
III.D of this proposed rule.
We 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 2023
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 74861
through 74910), we finalized a comprehensive payment policy that
packages payment for adjunctive and secondary items, services, and
procedures into the most costly primary procedure under the OPPS at the
claim level. The policy was finalized in CY 2014 but the effective date
was delayed until January 1, 2015, to allow additional time for further
analysis, opportunity for public comment, and
[[Page 44514]]
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). We have gradually added new C-APCs since
the policy was implemented beginning in CY 2015, with the number of C-
APCs now totaling 69 (80 FR 70332; 81 FR 79584 through 79585; 83 FR
58844 through 58846; 84 FR 61158 through 61166; 85 FR 85885; and 86 FR
63474).
Under our C-APC policy, we designate a service described by a HCPCS
code assigned to a C-APC as the primary service when the service is
identified by OPPS status indicator ``J1''. When such a primary service
is reported on a hospital outpatient claim, taking into consideration
the few exceptions that are discussed below, we make payment for all
other items and services reported on the hospital outpatient claim as
being integral, ancillary, supportive, dependent, and adjunctive to the
primary service (hereinafter collectively referred to as ``adjunctive
services'') and representing components of a complete comprehensive
service (78 FR 74865 and 79 FR 66799). Payments for adjunctive services
are packaged into the payments for the primary services. This results
in a single prospective payment for each of the primary, comprehensive
services based on the costs of all reported services at the claim
level.
Services excluded from the C-APC policy under the OPPS include
services that are not covered OPD services, services that cannot by
statute be paid for under the OPPS, and services that are required by
statute to be separately paid. This includes certain mammography and
ambulance services that are not covered OPD services in accordance with
section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also
are required by statute to receive separate payment under section
1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which
also require separate payment under section 1833(t)(6) of the Act;
self-administered drugs (SADs) that are not otherwise packaged as
supplies because they are not covered under Medicare Part B under
section 1861(s)(2)(B) of the Act; and certain preventive services (78
FR 74865 and 79 FR 66800 through 66801). A list of services excluded
from the C-APC policy is included in Addendum J to this proposed rule
(which is available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices). If
a service does not appear on this list of excluded services, payment
for it will be packaged into the payment for the primary C-APC service
when it appears on an outpatient claim with a primary C-APC service.
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 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 (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
[[Page 44515]]
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-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
[[Page 44516]]
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 2023, we propose to apply the frequency and cost
criteria thresholds discussed above, testing claims reporting one unit
of a single primary service assigned to status indicator ``J1'' and any
number of units of a single add-on code for the primary ``J1'' service.
If the frequency and cost criteria thresholds for a complexity
adjustment are met and reassignment to the next higher cost APC in the
clinical family is appropriate (based on meeting the criteria outlined
above), we make a complexity adjustment for the code combination; that
is, we reassign the primary service code reported in conjunction with
the add-on code to the next higher cost C-APC within the same clinical
family of C-APCs. As previously stated, we package payment for add-on
codes into the C-APC payment rate. If any add-on code reported in
conjunction with the ``J1'' primary service code does not qualify for a
complexity adjustment, payment for the add-on service continues to be
packaged into the payment for the primary service and is not reassigned
to the next higher cost C-APC. We list the complexity adjustments for
``J1'' and add-on code combinations for CY 2023, along with all of the
other final complexity adjustments, in Addendum J to this proposed 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 this proposed rule includes the cost statistics for
each code combination that would qualify for a complexity adjustment
(including primary code and add-on code combinations). Addendum J to
this proposed rule also contains summary cost statistics for each of
the paired code combinations that describe a complex code combination
that would qualify for a complexity adjustment and are proposed to be
reassigned to the next higher cost C-APC within the clinical family.
The combined statistics for all proposed reassigned complex code
combinations are represented by an alphanumeric code with the first
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 this 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.
(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 them. Beginning in CY 2002, we retain services
within New Technology APC groups until we gather sufficient claims data
to enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected (82 FR 59277).
The C-APC payment policy packages payment for adjunctive and
secondary items, services, and procedures into the most costly primary
procedure under the OPPS at the claim level. Prior to CY 2019, when a
procedure assigned to a New Technology APC was included on the claim
with a primary procedure, identified by OPPS status indicator ``J1'',
payment for the new technology service was typically packaged into the
payment for the primary procedure. Because the new technology service
was not separately paid in this scenario, the overall number of single
claims available to determine an appropriate clinical APC for the new
service was reduced. This was contrary to the objective of the New
Technology APC payment policy, which is to gather sufficient claims
data to enable us to assign the service to an appropriate clinical APC.
To address this issue and ensure that there 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 beginning in CY 2020, 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''
[[Page 44517]]
when they are included on a claim with a ``J2'' service (84 FR 61167).
We propose to continue to exclude payment for any procedure that is
assigned to a New Technology APC (APCs 1491 through 1599 and APCs 1901
through 1908) from being packaged when included on a claim with a
``J1'' or ``J2'' service assigned to a C-APC.
(3) Exclusion of Drugs and Biologicals Described by HCPCS Code C9399
(Unclassified Drugs or Biologicals) From the C-APC Policy
Section 1833(t)(15) of the Act, as added by section 621(a)(1) of
the Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (Pub. L. 108-173), provides for payment under the OPPS for new
drugs and biologicals until HCPCS codes are assigned. Under this
provision, we are required to make payment for a covered outpatient
drug or biological that is furnished as part of covered outpatient
department services but for which a HCPCS code has not yet been
assigned in an amount equal to 95 percent of average wholesale price
(AWP) for the drug or biological.
In the CY 2005 OPPS/ASC final rule with comment period (69 FR
65805), we implemented section 1833(t)(15) of the Act by instructing
hospitals to bill for a drug or biological that is newly approved by
the FDA and that does not yet have a HCPCS code by reporting the
National Drug Code (NDC) for the product along with the newly created
HCPCS code C9399 (Unclassified drugs or biologicals). We explained that
when HCPCS code C9399 appears on a claim, the Outpatient Code Editor
(OCE) suspends the claim for manual pricing by the Medicare
Administrative Contractor (MAC). The MAC prices the claim at 95 percent
of the drug or biological's AWP, using Red Book or an equivalent
recognized compendium, and processes the claim for payment. We
emphasized that this approach enables hospitals to bill and receive
payment for a new drug or biological concurrent with its approval by
the FDA. The hospital does not have to wait for the next quarterly
release or for approval of a product-specific HCPCS code to receive
payment for a newly approved drug or biological or to resubmit claims
for adjustment. We instructed that hospitals would discontinue billing
HCPCS code C9399 and the NDC upon implementation of a product specific
HCPCS code, status indicator, and appropriate payment amount with the
next quarterly update. We also note that HCPCS code C9399 is paid in a
similar manner in the ASC setting, as 42 CFR 416.171(b) outlines that
certain drugs and biologicals for which separate payment is allowed
under the OPPS are considered covered ancillary services for which the
OPPS payment rate, which is 95 percent of AWP for HCPCS code C9399,
applies. Since the implementation of the C-APC policy in 2015, payment
for drugs and biologicals described by HCPCS code C9399 has been
included in the C-APC payment when these products appear on a claim
with a primary C-APC service. Packaging payment for these drugs and
biologicals that appear on a hospital outpatient claim with a primary
C-APC service is consistent with our C-APC packaging policy under which
we make payment for all items and services, including all non-pass-
through drugs, reported on the hospital outpatient claim as being
integral, ancillary, supportive, dependent, and adjunctive to the
primary service and representing components of a complete comprehensive
service, with certain limited exceptions (78 FR 74869). It has been our
position that the total payment for the C-APC with which payment for a
drug or biological described by HCPCS code C9399 is packaged includes
payment for the drug or biological at 95 percent of its AWP.
However, we have determined that in certain instances, drugs and
biologicals described by HCPCS code C9399 are not being paid at 95
percent of their AWPs when payment for them is packaged with payment
for a primary C-APC service. In order to ensure payment for new drugs,
biologicals, and radiopharmaceuticals described by HCPCS code C9399 at
95 percent of their AWP, for CY 2023 and subsequent years, we propose
to exclude any drug, biological, or radiopharmaceutical described by
HCPCS code C9399 from packaging when the drug, biological, or
radiopharmaceutical is included on a claim with a ``J1'' service, which
is the status indicator assigned to a C-APC, and a claim with a ``J2''
service, which is the status indicator assigned to comprehensive
observation services. Please see OPPS Addendum J for the proposed CY
2023 comprehensive APC payment policy exclusions.
We are also including a corresponding proposal in section XI
``Proposed CY 2023 OPPS Payment Status and Comment Indicators'', to add
a new definition to status indicator ``A'' to include unclassified
drugs and biologicals that are reportable with HCPCS code C9399. The
proposed definition, found in Addendum D1 to this proposed rule, would
ensure the MAC prices claims for drugs, biologicals or
radiopharmaceuticals billed with HCPCS code C9399 at 95 percent of the
drug or biological's AWP and pays separately for the drug, biological,
or radiopharmaceutical under the OPPS when it appears on the same claim
as a primary C-APC service.
(4) Additional C-APCs for CY 2023
For CY 2023, we propose to continue to apply the C-APC payment
policy methodology. We refer readers to the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79583) for a discussion of the C-APC payment
policy methodology and revisions.
Each year, in accordance with section 1833(t)(9)(A) of the Act, we
review and revise the services within each APC group and the APC
assignments under the OPPS. As a result of our annual review of the
services and the APC assignments under the OPPS, we propose to add one
C-APC under the existing C-APC payment policy in CY 2023: Proposed C-
APC 5372 (Level 2 Urology and Related Services). This APC was selected
to be included in this proposed rule because, similar to other C-APCs,
this APC includes primary, comprehensive services, such as major
surgical procedures, that are typically reported with other ancillary
and adjunctive services. Also, similar to other clinical APCs that have
been converted to C-APCs, there are higher APC levels (Levels 3-8
Urology and Related Services) within the clinical family or related
clinical family of this APC that have previously been converted to C-
APCs.
Table 1 below lists the proposed C-APCs for CY 2023. All C-APCs are
displayed in Addendum J to this proposed rule (which is available via
the internet on the CMS website). Addendum J to this proposed rule also
contains all of the data related to the C-APC payment policy
methodology, including the list of complexity adjustments and other
information.
BILLING CODE 4120-01-P
[[Page 44518]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.000
[[Page 44519]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.001
BILLING CODE 4120-01-C
[[Page 44520]]
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 refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66611 through 66614 and 66650 through 66652) for
a full discussion of the development of the composite APC methodology,
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163)
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241
through 59242 and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
We propose to continue our longstanding policy of limiting the
aggregate payment for specified less resource-intensive mental health
services furnished on the same date to the payment for a day of partial
hospitalization services provided by a hospital, which we consider to
be the most resource-intensive of all outpatient mental health
services. We refer readers to the April 7, 2000 OPPS final rule with
comment period (65 FR 18452 through 18455) for the initial discussion
of this longstanding policy and the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74168) for more recent background.
In the CY 2018 OPPS/ASC proposed rule and final rule with comment
period (82 FR 33580 through 33581 and 59246 through 59247,
respectively), we proposed and finalized the policy for CY 2018 and
subsequent years that, when the aggregate payment for specified mental
health services provided by one hospital to a single beneficiary on a
single date of service, based on the payment rates associated with the
APCs for the individual services, exceeds the maximum per diem payment
rate for partial hospitalization services provided by a hospital, those
specified mental health services will be paid through composite APC
8010 (Mental Health Services Composite). In addition, we set the
payment rate for composite APC 8010 for CY 2018 at the same payment
rate that will be paid for APC 5863, which is the maximum partial
hospitalization per diem payment rate for a hospital, and finalized a
policy that the hospital will continue to be paid the payment rate for
composite APC 8010. Under this policy, the I/OCE will continue to
determine whether to pay for these specified mental health services
individually, or to make a single payment at the same payment rate
established for APC 5863 for all of the specified mental health
services furnished by the hospital on that single date of service. We
continue to believe that the costs associated with administering a
partial hospitalization program at a hospital represent the most
resource intensive of all outpatient mental health services. Therefore,
we do not believe that we should pay more for mental health services
under the OPPS than the highest partial hospitalization per diem
payment rate for hospitals.
We propose that when the aggregate payment for specified mental
health services provided by one hospital to a single beneficiary on a
single date of service, based on the payment rates associated with the
APCs for the individual services, exceeds the maximum per diem payment
rate for partial hospitalization services provided by a hospital, those
specified mental health services would be paid through composite APC
8010 for CY 2023. In addition, we propose to set the payment rate for
composite APC 8010 at the same payment rate that we propose for APC
5863, which is the maximum partial hospitalization per diem payment
rate for a hospital, and that the hospital continue to be paid the
proposed payment rate for composite APC 8010.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide a single payment each time a
hospital submits a claim for more than one imaging procedure within an
imaging family on the same date of service, to reflect and promote the
efficiencies hospitals can achieve when performing multiple imaging
procedures during a single session (73 FR 41448 through 41450). We
utilize three imaging families based on imaging modality for purposes
of this methodology: (1) ultrasound; (2) computed tomography (CT) and
computed tomographic angiography (CTA); and (3) magnetic resonance
imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes
subject to the multiple imaging composite policy and their respective
families are listed in Table 2 below.
While there are three imaging families, there are five multiple
imaging composite APCs due to the statutory requirement under section
1833(t)(2)(G) of the Act that we differentiate payment for OPPS imaging
services provided with and without contrast. While the ultrasound
procedures included under the policy do not involve contrast, both CT/
CTA and MRI/MRA scans can be provided either with or without contrast.
The five multiple imaging composite APCs established in CY 2009 are:
APC 8004 (Ultrasound Composite);
APC 8005 (CT and CTA without Contrast Composite);
APC 8006 (CT and CTA with Contrast Composite);
APC 8007 (MRI and MRA without Contrast Composite); and
APC 8008 (MRI and MRA with Contrast Composite).
We define the single imaging session for the ``with contrast''
composite APCs as having at least one or more imaging procedures from
the same family performed with contrast on the same date of service.
For example, if the hospital performs an MRI without contrast during
the same session as at least one other MRI with contrast, the hospital
will receive payment based on the payment rate for APC 8008, the ``with
contrast'' composite APC.
We make a single payment for those imaging procedures that qualify
for payment based on the composite APC payment rate, which includes any
packaged services furnished on the same date of service. The standard
(noncomposite) APC assignments continue to apply for single imaging
procedures and multiple imaging 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 2023, we propose to continue to pay for all multiple imaging
[[Page 44521]]
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 2023, except where otherwise indicated, we propose to use
the costs derived from CY 2021 claims data to set the proposed CY 2023
payment rates. Therefore, for CY 2023, 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 2021
claims available for this proposed rule that qualify 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 use the same
methodology that we use to calculate the geometric mean costs for these
composite APCs since CY 2014, as described in the CY 2014 OPPS/ASC
final rule with comment period (78 FR 74918). The imaging HCPCS codes
referred to as ``overlap bypass codes'' that we removed from the bypass
list for purposes of calculating the proposed multiple imaging
composite APC geometric mean costs, in accordance with our established
methodology as stated in the CY 2014 OPPS/ASC final rule with comment
period (78 FR 74918), are identified by asterisks in Addendum N to this
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 this
proposed rule,
---------------------------------------------------------------------------
\1\ CY 2023 Medicare Hospital Outpatient Prospective Payment
System and Ambulatory Surgical Center Payment System Proposed Rule
(CMS-1772-P); Notice of Proposed Rulemaking. Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
---------------------------------------------------------------------------
For CY 2023, we are able to identify approximately 0.95 million
``single session'' claims out of an estimated 2.0 million potential
claims for payment through composite APCs from our ratesetting claims
data, which represents approximately 47.5 percent of all eligible
claims, to calculate the proposed CY 2023 geometric mean costs for the
multiple imaging composite APCs. Table 2 of this 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 2023.
BILLING CODE 4120-01-P
[[Page 44522]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.002
[[Page 44523]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.003
[[Page 44524]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.004
[[Page 44525]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.005
[[Page 44526]]
BILLING CODE 4120-01-C
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. 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.
b. Proposal and Comment Solicitation on Packaged Items and Services
For CY 2023, 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 2023, we are not proposing any changes to the overall
packaging policy previously discussed. We propose to continue to
conditionally package the costs of selected newly identified ancillary
services into payment for a primary service where we believe that the
packaged item or service is integral, ancillary, supportive, dependent,
or adjunctive to the provision of care that was reported by the primary
service HCPCS code.
While we are not proposing any changes to the overall packaging
policy above, we are soliciting comments on potential modifications to
our packaging policy, as described in section XIII.E.5 of this proposed
rule. Specifically, we are seeking comments and data regarding whether
to expand the current ASC payment system policy for non-opioid pain
management drugs and biologicals that function as surgical supplies to
the HOPD setting. Details on the current ASC policy can be found in
XIII.E.
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 2022 OPPS/
ASC final rule with comment period (85 FR 63497 through 63498), we
applied this policy and calculated the relative payment weights for
each APC for CY 2022 that were shown in Addenda A and B of the CY 2022
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 2022 OPPS/ASC final rule with
comment period. For CY 2023, as we did for CY 2022, we propose to
continue to apply the policy established in CY 2013 and calculate
relative payment weights for each APC for CY 2023 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 2023, as we did for CY 2022, 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
2023, as we did for CY 2022, we
[[Page 44527]]
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 beginning 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 departments (PBDs) at a reduced rate. While the volume associated
with these visits is included in the impact model, and thus used in
calculating the weight scalar, the policy has a negligible effect on
the scalar. Specifically, under this policy, there is no change to the
relativity of the OPPS payment weights because the adjustment is made
at the payment level rather than in the cost modeling. Further, under
this policy, the savings that result from the change in payments for
these clinic visits are not budget neutral. Therefore, the impact of
this policy will generally not be reflected in the budget neutrality
adjustments, whether the adjustment is to the OPPS relative weights or
to the OPPS conversion factor. For a full discussion of this policy, we
refer readers to the CY 2020 OPPS/ASC final rule with comment period
(84 FR 61142).
Section 1833(t)(9)(B) of the Act requires that APC reclassification
and recalibration changes, wage index changes, and other adjustments be
made in a budget neutral manner. Budget neutrality ensures that the
estimated aggregate weight under the OPPS for CY 2023 is neither
greater than nor less than the estimated aggregate weight that would
have been calculated without the changes. To comply with this
requirement concerning the APC changes, we propose to compare the
estimated aggregate weight using the CY 2022 scaled relative payment
weights to the estimated aggregate weight using the proposed CY 2023
unscaled relative payment weights.
For CY 2022, we multiplied the CY 2022 scaled APC relative payment
weight applicable to a service paid under the OPPS by the volume of
that service from CY 2021 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 2023, we
propose to apply the same process using the estimated CY 2023 unscaled
relative payment weights rather than scaled relative payment weights.
We propose to calculate the weight scalar by dividing the CY 2022
estimated aggregate weight by the unscaled CY 2023 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 2023 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 ``2023 NPRM OPPS Claims Accounting
(PDF)''.
We propose to compare the estimated unscaled relative payment
weights in CY 2023 to the estimated total relative payment weights in
CY 2022 using CY 2021 claims data, holding all other components of the
payment system constant to isolate changes in total weight. Based on
this comparison, we propose to adjust the calculated CY 2023 unscaled
relative payment weights for purposes of budget neutrality. We propose
to adjust the estimated CY 2023 unscaled relative payment weights by
multiplying them by a proposed weight scalar of 1.4152 to ensure that
the proposed CY 2023 relative payment weights are scaled to be budget
neutral. The proposed CY 2023 relative payment weights listed in
Addenda A and B to this proposed rule (which are available via the
internet on the CMS website) are scaled and incorporate the
recalibration adjustments discussed in sections II.A.1 and II.A.2 of
this proposed rule.
Section 1833(t)(14) of the Act provides the payment rates for
certain 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 this proposed rule) is included in the
budget neutrality calculations for the CY 2023 OPPS.
B. Proposed Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
update the conversion factor used to determine the payment rates under
the OPPS on an annual basis by applying the OPD rate 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 rate
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 2023 IPPS/LTCH PPS proposed
rule (87 FR 28402), consistent with current law, based on IHS Global,
Inc.'s fourth quarter 2021 forecast of the FY 2023 market basket
increase, the proposed FY 2023 IPPS market basket update was 3.1
percent. We note that under our regular process for the CY 2023 OPPS/
ASC final rule, we will use the market basket update for the FY 2023
IPPS/LTCH PPS final rule, which would be based on IHS Global, Inc.'s
second quarter 2022 forecast of the FY 2023 market basket increase. If
that forecast is higher than the market basket used for this proposed
rule, the CY 2023 OPPS/ASC final rule OPD rate increase factor will
reflect that higher market basket estimate.
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 2023 IPPS/LTCH PPS proposed rule (87 FR 28402), the proposed MFP
adjustment for FY 2023 was 0.4 percentage point.
Therefore, we propose that the MFP adjustment for the CY 2023 OPPS
will be 0.4 percentage point. We also propose that if more recent data
become subsequently available after the publication of the CY 2023
OPPS/ASC proposed rule (for example, a more
[[Page 44528]]
recent estimate of the market basket increase and/or the MFP
adjustment), we would use such updated data, if appropriate, to
determine the CY 2023 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 2023 OPPS/ASC final rule.
We note that section 1833(t)(3)(F) of the Act provides that
application of this subparagraph may result in the OPD fee schedule
increase factor under section 1833(t)(3)(C)(iv) of the Act being less
than 0.0 percent for a year, and may result in OPPS payment rates being
less than rates for the preceding year. As described in further detail
below, we propose for CY 2023 an OPD fee schedule increase factor of
2.7 percent for the CY 2023 OPPS (which is the proposed estimate of the
hospital inpatient market basket percentage increase of 3.1 percent,
less the proposed 0.4 percentage point MFP adjustment).
We propose that hospitals that fail to meet the Hospital OQR
Program reporting requirements would be subject to an additional
reduction of 2.0 percentage points from the OPD fee schedule increase
factor adjustment to the conversion factor that would be used to
calculate the OPPS payment rates for their services, as required by
section 1833(t)(17) of the Act. For further discussion of the Hospital
OQR Program, we refer readers to section XIV of this proposed rule.
To set the OPPS conversion factor for 2023, we propose to increase
the CY 2022 conversion factor of $84.177 by 2.7 percent. In accordance
with section 1833(t)(9)(B) of the Act, we proposed further to adjust
the conversion factor for CY 2023 to ensure that any revisions made to
the wage index and rural adjustment are made on a budget neutral basis.
We propose to calculate an overall budget neutrality factor of 1.0010
for wage index changes by comparing proposed total estimated payments
from our simulation model using the proposed FY 2023 IPPS wage indexes
to those payments using the FY 2022 IPPS wage indexes, as adopted on a
calendar year basis for the OPPS. We further propose to calculate an
additional budget neutrality factor of 0.9995 to account for our
proposed policy to cap wage index reductions for hospitals at 5 percent
on an annual basis.
For the CY 2023 OPPS, we propose to maintain the current rural
adjustment policy, as discussed in section II.E. of this proposed rule.
Therefore, the proposed budget neutrality factor for the rural
adjustment is 1.0000.
We propose to continue previously established policies for
implementing the cancer hospital payment adjustment described in
section 1833(t)(18) of the Act, as discussed in section II.F of this
proposed rule. We propose to calculate a CY 2023 budget neutrality
adjustment factor for the cancer hospital payment adjustment by
comparing estimated total CY 2023 payments under section 1833(t) of the
Act, including the proposed CY 2023 cancer hospital payment adjustment,
to estimated CY 2023 total payments using the CY 2022 final cancer
hospital payment adjustment, as required under section 1833(t)(18)(B)
of the Act. The proposed CY 2023 estimated payments applying the
proposed CY 2023 cancer hospital payment adjustment were the same as
estimated payments applying the CY 2022 final cancer hospital payment
adjustment. Therefore, we propose to apply a budget neutrality
adjustment factor of 1.0000 to the conversion factor for the cancer
hospital payment adjustment. In accordance with section 1833(t)(18)(C),
as added by section 16002(b) of the 21st Century Cures Act (Pub. L.
114-255), we are applying a budget neutrality factor calculated as if
the proposed cancer hospital adjustment target payment-to-cost ratio
was 0.90, not the 0.89 target payment-to-cost ratio we applied as
stated in section II.F. of this proposed rule.
We estimate that proposed pass-through spending for drugs,
biologicals, and devices for CY 2023 would equal approximately $772.0
million, which represents 0.90 percent of total projected CY 2023 OPPS
spending. Therefore, the proposed conversion factor would be adjusted
by the difference between the 1.24 percent estimate of pass-through
spending for CY 2022 and the 0.90 percent estimate of proposed pass-
through spending for CY 2023, resulting in a proposed increase to the
conversion factor for CY 2023 of 0.34 percent.
Proposed estimated payments for outliers would remain at 1.0
percent of total OPPS payments for CY 2023. We estimate for the
proposed rule that outlier payments would be approximately 1.29 percent
of total OPPS payments in CY 2022; the 1.00 percent for proposed
outlier payments in CY 2023 would constitute a 0.29 percent decrease in
payment in CY 2023 relative to CY 2022.
We also propose to make an OPPS budget neutrality adjustment of
0.01 percent of the OPPS for the estimated spending of $8.3 million
associated with the proposed payment adjustment under the CY 2023 OPPS
for domestic NIOSH-approved surgical N95 respirators, as discussed in
section X.H of this proposed rule.
For CY 2023, we also propose that hospitals that fail to meet the
reporting requirements of the Hospital OQR Program would continue to be
subject to a further reduction of 2.0 percentage points to the OPD fee
schedule increase factor. For hospitals that fail to meet the
requirements of the Hospital OQR Program, we proposed to make all other
adjustments discussed above, but use a reduced OPD fee schedule update
factor of 0.7 percent (that is, the proposed OPD fee schedule increase
factor of 2.7 percent further reduced by 2.0 percentage points). This
would result in a proposed reduced conversion factor for CY 2023 of
$85.093 for hospitals that fail to meet the Hospital OQR Program
requirements (a difference of -1.692 in the conversion factor relative
to hospitals that met the requirements).
In summary, for 2023, we propose to use a reduced conversion factor
of $85.093 in the calculation of payments for hospitals that fail to
meet the Hospital OQR Program requirements (a difference of -1.692 in
the conversion factor relative to hospitals that met the requirements).
For 2023, we propose to use a conversion factor of $86.785 in the
calculation of the national unadjusted payment rates for those items
and services for which payment rates are calculated using geometric
mean costs; that is, the proposed OPD fee schedule increase factor of
2.7 percent for CY 2023, the required proposed wage index budget
neutrality adjustment of approximately 1.0010, the proposed 5 percent
annual cap for individual hospital wage index reductions adjustment of
approximately 0.9995, the proposed cancer hospital payment adjustment
of 1.0000, the proposed adjustment to account for the 0.01 percentage
point of OPPS spending associated with the payment adjustment for
domestic NIOSH-approved surgical N95 respirators, and the proposed
adjustment of an increase of 0.34 percentage point of projected OPPS
spending for the difference in pass-through spending, which that result
in a proposed conversion factor for CY 2023 of $86.785.
C. Proposed Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust the portion of payment and
coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
[[Page 44529]]
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
of the OPPS payment rate is called the OPPS labor-related share. Budget
neutrality is discussed in section II.B of this proposed rule.
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that, for all hospitals, approximately 60 percent of
the costs of services paid under the OPPS were attributable to wage
costs. We confirmed that this labor-related share for outpatient
services is appropriate during our regression analysis for the payment
adjustment for rural hospitals in the CY 2006 OPPS final rule with
comment period (70 FR 68553). We propose to continue this policy for
the CY 2023 OPPS. We refer readers to section II.H of this proposed
rule for a description and an example of how the wage index for a
particular hospital is used to determine payment for the hospital.
As discussed in the claims accounting narrative included with the
supporting documentation for this proposed rule (which is available via
the internet on the CMS website), for estimating APC costs, we would
standardize 60 percent of estimated claims costs for geographic area
wage variation using the same FY 2023 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 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
2023, we propose to implement this provision in the same manner as we
have since CY 2011. Under this policy, the frontier State hospitals
would receive a wage index of 1.00 if the otherwise applicable wage
index (including reclassification, the rural floor, and rural floor
budget neutrality) is less than 1.00. Because the HOPD receives a wage
index based on the geographic location of the specific inpatient
hospital with which it is associated, the frontier State wage index
adjustment applicable for the inpatient hospital also would apply for
any associated HOPD. We refer readers to the FY 2011 through FY 2022
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; for FY 2021, 85 FR 58765; and for FY 2022, 86 FR 45178.
In addition to the changes required by the Affordable Care Act, we
note that the proposed FY 2023 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, the imputed floor wage index
adjustment in all-urban states, 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. We refer readers to the FY
2023 IPPS/LTCH PPS proposed rule (87 FR 28357 through 28380) for a
detailed discussion of all proposed changes to the FY 2023 IPPS wage
indexes. We note in particular that in the FY 2023 IPPS/LTCH PPS
proposed rule (87 FR 28377 through 28380), we proposed a permanent
approach to smooth year-to-year decreases in hospitals' wage indexes.
Specifically, for FY 2023 and subsequent years, we proposed to apply a
5-percent cap on any decrease to a hospital's wage index from its wage
index in the prior FY, regardless of the circumstances causing the
decline. That is, we proposed that a hospital's wage index for FY 2023
would not be less than 95 percent of its final wage index for FY 2022,
and that for subsequent years, a hospital's wage index would not be
less than 95 percent of its final wage index for the prior FY. We
stated that we believe this policy would increase the predictability of
IPPS payments for hospitals and mitigate instability and significant
negative impacts to hospitals resulting from changes to the wage index.
It would also eliminate the need for temporary and potentially
uncertain transition adjustments to the wage index in the future due to
specific policy changes or circumstances outside hospitals' control.
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
[[Page 44530]]
finalized our proposal to discontinue the use of SSA county codes and
begin using only the FIPS county codes. For CY 2023, under the OPPS, we
are continuing to use only the FIPS county codes for purposes of
crosswalking counties to CBSAs.
We propose to use the FY 2023 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 2023. Therefore, any policies and adjustments for the FY 2023
IPPS post-reclassified wage index, including, but not limited to, the
5-percent cap on any decrease to a hospital's wage index from its wage
index in the prior FY described above, would be reflected in the final
CY 2023 OPPS wage index beginning on January 1, 2023. We refer readers
to the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28357 through 28380)
and the proposed FY 2023 hospital wage index files posted on the CMS
website at https://www.cms.gov/medicare/acute-inpatient-pps/fy-2023-ipps-proposed-rule-home-page. With regard to budget neutrality for the
CY 2023 OPPS wage index, we refer readers to section II.B of this
proposed rule. We continue to believe that using the IPPS post-
reclassified wage index as the source of an adjustment factor for the
OPPS is reasonable and logical, given the inseparable, subordinate
status of the HOPD within the hospital overall.
Hospitals that are paid under the OPPS, but not under the IPPS, do
not have an assigned hospital wage index under the IPPS. Therefore, for
non-IPPS hospitals paid under the OPPS, it is our longstanding policy
to assign the wage index that would be applicable if the hospital was
paid under the IPPS, based on its geographic location and any
applicable wage index policies and adjustments. We propose to continue
this policy for CY 2023 and are including below a brief summary of the
major proposed FY 2023 IPPS wage index policies and adjustments that we
propose to apply to these hospitals under the OPPS for CY 2023. We
refer readers to the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28357
through 28380) for a detailed discussion of the proposed changes to the
FY 2023 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 2023, we propose to continue our policy of
allowing non-IPPS hospitals paid under the OPPS to qualify for the
outmigration adjustment if they are located in a section 505 out-
migration county (section 505 of the MMA). Furthermore, we propose that
the wage index that would apply for CY 2023 to non-IPPS hospitals paid
under the OPPS would continue to include the rural floor adjustment and
any policies and 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 the 5 percent cap
on wage index decreases that we may finalize for the FY 2023 IPPS wage
index as discussed previously.
For CMHCs, for CY 2023, we propose to continue to calculate the
wage index by using the post-reclassification IPPS wage index based on
the CBSA where the CMHC is located. Furthermore, we propose that the
wage index that would apply to a CMHC for CY 2023 would continue to
include the rural floor adjustment and any policies and adjustments
applied to the IPPS wage index to address wage index disparities. In
addition, the wage index that would apply to CMHCs would include the 5
percent cap on wage index decreases that we may finalize for the FY
2023 IPPS wage index as discussed above. Also, we propose that the wage
index that would apply to CMHCs would not include the outmigration
adjustment because that adjustment only applies to hospitals.
Table 4A associated with the FY 2023 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 2023 IPPS/LTCH PPS final rule (available for
download via the website above) identifies IPPS hospitals that receive
the out-migration adjustment for FY 2023. We are including the
outmigration adjustment information from Table 2 associated with the FY
2023 IPPS/LTCH PPS proposed rule as Addendum L to this proposed rule,
with the addition of non-IPPS hospitals that would receive the section
505 outmigration adjustment under this proposed rule. Addendum L is
available via the internet on the CMS website. We refer readers to the
CMS website for the OPPS at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index. At this link, readers
will find a link to the proposed FY 2023 IPPS wage index tables and
Addendum L.
D. Proposed Statewide Average Default Cost-to-Charge Ratios (CCRs)
In addition to using CCRs to estimate costs from charges on claims
for ratesetting, we use overall hospital-specific CCRs calculated from
the hospital's most recent cost report to determine outlier payments,
payments for pass-through devices, and monthly interim transitional
outpatient payments (TOPs) 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 2023
OPPS proposed rule Claims Accounting document that is posted on our
website. Due to concerns with cost report data as a result of the
COVID-19 PHE, we propose to calculate the default ratios for CY 2023
using the June 2020 HCRIS cost reports, consistent with the broader
proposal regarding CY 2023 OPPS ratesetting discussed in section X of
this proposed rule.
We no longer publish a table in the Federal Register containing the
statewide average CCRs in the annual OPPS proposed rule and final rule
with comment period. These CCRs with the
[[Page 44531]]
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. Proposed Adjustment for Rural Sole Community Hospitals (SCHs) and
Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2023
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 2022.
For CY 2023, we propose to continue the current policy of a 7.1
percent payment adjustment 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, applied in a budget neutral manner.
F. Proposed Payment Adjustment for Certain Cancer Hospitals for CY 2023
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
[[Page 44532]]
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 3 displays the target PCR for purposes of
the cancer hospital adjustment for CY 2012 through CY 2022.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP26JY22.006
2. Proposed Policy for CY 2023
Section 16002(b) of the 21st Century Cures Act (Pub. L. 114-255)
amended section 1833(t)(18) of the Act by adding subparagraph (C),
which requires that in applying Sec. 419.43(i) (that is, the payment
adjustment for certain cancer hospitals) for services furnished on or
after January 1, 2018, the target PCR adjustment be reduced by 1.0
percentage point less than what would otherwise apply. Section 16002(b)
also provides that, in addition to the percentage reduction, the
Secretary may consider making an additional percentage point reduction
to the target PCR that takes into account payment rates for applicable
items and services described under section 1833(t)(21)(C) of the Act
for hospitals that are not cancer hospitals described under section
1886(d)(1)(B)(v) of the Act. Further, in making any budget neutrality
adjustment under section 1833(t) of the Act, the Secretary shall not
take into account the reduced expenditures that result from application
of section 1833(t)(18)(C) of the Act.
We propose to provide additional payments to the 11 specified
cancer hospitals so that each cancer hospital's proposed PCR is equal
to the weighted average PCR (or ``target PCR'') for the other OPPS
hospitals, generally using the most recent submitted or settled cost
report data that are available, reduced by 1.0 percentage point, to
comply with section 16002(b) of the 21st Century Cures Act. We do 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 2023.
Under our established policy, to calculate the proposed CY 2023
target PCR, we would use the same extract of cost report data from
HCRIS used to estimate costs for the CY 2023 OPPS which, in most cases,
would be the most recently available hospital cost reports. However, as
discussed in section II.A.1.c and X.C of this proposed rule, we propose
to use cost report data from the June 2020 HCRIS data set, which does
not contain cost reports from CY 2020, given our concerns with CY 2020
cost report data as a result of the COVID-19 PHE. We believe a target
PCR based on 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 2022 rulemaking cycle,
which pre-dated the COVID-19 PHE. Therefore, for CY 2023, we propose to
continue to use the same target PCR we used for CY 2021 and CY 2022 of
0.89. This proposed CY 2023 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 2023. For a description of the CY 2021 target
PCR calculation, on which the proposed CY 2023 target PCR is based, we
refer readers to the CY 2021 OPPS/ASC final rule with comment period
(84 FR 85912 through 85914).
Table 4 shows the proposed estimated percentage increase in OPPS
payments to each cancer hospital for CY 2023, due to the cancer
hospital payment adjustment policy. The cost reporting periods for all
cancer hospitals in Table 4 overlaps with CY 2020 and the costs and
payments associated with each cancer hospital may be impacted by the
effects of the COVID-19 PHE. Therefore, the estimates in Table 4 are
likely to be less accurate than in other years and may overstate the
percentage increase in cancer hospital payments for CY 2023. The
actual, final amount of the CY 2023 cancer hospital payment adjustment
for each cancer hospital would be determined at cost report settlement
and would depend on each hospital's CY 2023 payments and costs from the
settled CY 2023 cost report. We note that the requirements contained in
section 1833(t)(18) of the Act do not affect the existing statutory
provisions that provide for TOPs for cancer hospitals. The TOPs will be
assessed, as usual, after all payments, including the cancer hospital
payment adjustment, have been made for a cost reporting period.
[[Page 44533]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.007
BILLING CODE 4120-01-C
G. Proposed Hospital Outpatient Outlier Payments
1. Background
The OPPS provides outlier payments to hospitals to help mitigate
the financial risk associated with high-cost and complex procedures,
where a very costly service could present a hospital with significant
financial loss. As explained in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66832 through 66834), we set our projected target
for aggregate outlier payments at 1.0 percent of the estimated
aggregate total payments under the OPPS for the prospective year.
Outlier payments are provided on a service-by-service basis when the
cost of a service exceeds the APC payment amount multiplier threshold
(the APC payment amount multiplied by a certain amount) as well as the
APC payment amount plus a fixed-dollar amount threshold (the APC
payment plus a certain dollar amount). In CY 2022, 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 $6,175 (the fixed-dollar
amount threshold) (86 FR 63508 through 63510). If the hospital's cost
of furnishing 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 hospital's cost of furnishing the service
exceeds 1.75 times the APC payment amount. Beginning with CY 2009
payments, outlier payments are subject to a reconciliation process
similar to the IPPS outlier reconciliation process for cost reports, as
discussed in the CY 2009 OPPS/ASC final rule with comment period (73 FR
68594 through 68599).
It has been our policy to report the actual amount of outlier
payments as a percent of total spending in the claims being used to
model the OPPS. Our estimate of total outlier payments as a percent of
total CY 2021 OPPS payments, using CY 2021 claims available for this CY
2023 OPPS/ASC proposed rule, is approximately 1.0 percent. Therefore,
for CY 2021, we estimated that we paid the outlier target of 1.0
percent of total aggregated OPPS payments. Using an updated claims
dataset for this proposed rule, we estimate that we paid approximately
1.01 percent of the total aggregate OPPS payments in outliers for CY
2021.
For this proposed rule, using CY 2021 claims data and CY 2022
payment rates, we estimate that the aggregate outlier payments for CY
2022 would be approximately 1.07 percent of the total CY 2022 OPPS
payments. We provide estimated CY 2023 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 2023
For CY 2023, we propose to continue our policy of estimating
outlier payments to be 1.0 percent of the estimated aggregate total
payments under the OPPS. We propose that a portion of that 1.0 percent,
an amount equal to less than 0.01 percent of outlier payments (or
0.0001 percent of total OPPS payments), would be allocated to CMHCs for
PHP outlier payments. This is the amount of estimated outlier payments
that would result from the proposed CMHC outlier threshold as a
proportion of total estimated OPPS outlier payments. We propose to
continue our longstanding policy that if a CMHC's cost for partial
hospitalization services, paid under APC 5853 (Partial Hospitalization
for CMHCs), exceeds
[[Page 44534]]
3.40 times the payment rate for proposed APC 5853, the outlier payment
would be calculated as 50 percent of the amount by which the cost
exceeds 3.40 times the proposed APC 5853 payment rate.
For further discussion of CMHC outlier payments, we refer readers
to section VIII.C of this proposed rule.
To ensure that the estimated CY 2023 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we propose that the hospital outlier threshold be set so that
outlier payments would be triggered when a hospital's cost of
furnishing a service exceeds 1.75 times the APC payment amount and
exceeds the APC payment amount plus $8,350.
We calculate the proposed fixed-dollar threshold of $8,350 using
the standard methodology most recently used for CY 2022 (86 FR 63508
through 63510). For purposes of estimating outlier payments for CY
2023, we use the hospital-specific overall ancillary CCRs available in
the April 2022 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.
In order to estimate the CY 2023 hospital outlier payments, we
inflate the charges on the CY 2021 claims using the same proposed
charge inflation factor of 1.13218 that we used to estimate the IPPS
fixed-loss cost threshold for the FY 2023 IPPS/LTCH PPS proposed rule
(87 FR 28667). We used an inflation factor of 1.06404 to estimate CY
2022 charges from the CY 2021 charges reported on CY 2021 claims before
applying CY 2022 CCRs to estimate the percent of outliers paid in CY
2022. The proposed methodology for determining these charge inflation
factors, as well as the solicitation of comments on an alternative
approach, is discussed in the FY 2023 IPPS/LTCH PPS proposed rule (87
FR 28667 through 28678). As we stated in the CY 2005 OPPS final rule
with comment period (69 FR 65844 through 65846), we believe that the
use of the same 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 propose to apply the same CCR
adjustment factor that we proposed to apply for the FY 2023 IPPS
outlier calculation to the CCRs used to simulate the proposed CY 2023
OPPS outlier payments to determine the fixed-dollar threshold.
Specifically, for CY 2023, we propose to apply an adjustment factor of
0.974495 to the CCRs that were in the April 2022 OPSF to trend them
forward from CY 2022 to CY 2023. The methodology for calculating the
proposed CCR adjustment factor, as well as the solicitation of comments
on an alternative approach, is discussed in the FY 2023 IPPS/LTCH PPS
proposed rule (87 FR 28668). We note that we propose to use the April
2022 OPSF for purposes of estimating costs for the OPPS outlier
threshold calculation whereas in section X of this proposed rule we
discussed using June 2020 HCRIS data extract for modeling hospital
outpatient costs in construction of our CY 2023 OPPS relative weights.
For modeling estimated outlier payments, since the April 2022 OPSF
contains cost data primarily from CY 2021 and CY 2022 and is the basis
for current CY 2022 OPPS outlier payments, we believe the April 2022
OPSF provides a more updated and accurate data source for determining
the CCRs that will be applied to CY 2023 hospital outpatient claims.
Therefore, we believe the April 2022 OPSF is a more accurate data
source for determining the fixed-dollar threshold to ensure that the
estimated CY 2023 aggregate outlier payments would equal 1.0 percent of
estimated aggregate total payments under the OPPS.
To model hospital outlier payments for this CY proposed rule, we
apply the overall CCRs from the April 2022 OPSF after adjustment (using
the proposed CCR inflation adjustment factor of 0.974495 to approximate
CY 2023 CCRs) to charges on CY 2021 claims that were adjusted (using
the proposed charge inflation factor of 1.13218 to approximate CY 2023
charges). We simulated aggregated CY 2021 hospital outlier payments
using these costs for several different fixed-dollar thresholds,
holding the 1.75 multiplier threshold constant and assuming that
outlier payments would continue to be made at 50 percent of the amount
by which the cost of furnishing the service would exceed 1.75 times the
APC payment amount, until the total outlier payments equaled 1.0
percent of aggregated estimated total CY 2023 OPPS payments. We
estimated that a proposed fixed-dollar threshold of $8,350, combined
with the proposed multiplier threshold of 1.75 times the APC payment
rate, would allocate 1.0 percent of aggregated total OPPS payments to
outlier payments. For CMHCs, we propose that, if a CMHC's cost for
partial hospitalization services, paid under APC 5853, exceeds 3.40
times the payment rate for APC 5853, the outlier payment would be
calculated as 50 percent of the amount by which the cost exceeds 3.40
times the APC 5853 payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals, as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor; that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that would apply to certain outpatient items and services
furnished by hospitals that are required to report outpatient quality
data and that fail to meet the Hospital OQR Program requirements. For
hospitals that fail to meet the Hospital OQR Program requirements, we
propose to continue the policy that we implemented in CY 2010 that the
hospitals' costs would be compared to the reduced payments for purposes
of outlier eligibility and payment calculation. For more information on
the Hospital OQR Program, we refer readers to section XIV of this
proposed rule.
H. Proposed Calculation of an Adjusted Medicare Payment From the
National Unadjusted Medicare Payment
The basic methodology for determining prospective payment rates for
HOPD services under the OPPS is set forth in existing regulations at 42
CFR part 419, subparts C and D. For this CY 2023 proposed rule, the
proposed payment rate for most services and procedures for which
payment is made under the OPPS is the product of the conversion factor
calculated in accordance with section II.B of this proposed rule and
the relative payment weight described in section II.A. of this proposed
rule. Therefore, the national unadjusted payment rate for most APCs
contained in Addendum A to this proposed rule (which is available via
the internet on the CMS website) and for most HCPCS codes to which
separate payment under the OPPS has been assigned in Addendum B to this
proposed rule (which is available via
[[Page 44535]]
the internet on the CMS website) is calculated by multiplying the
proposed CY 2023 scaled weight for the APC by the CY 2023 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 requirements. For further
discussion of the payment reduction for hospitals that fail to meet the
requirements of the Hospital OQR Program, we refer readers to section
XIV. of this proposed rule.
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 this proposed rule, which is available via
the internet on the CMS website), in a circumstance in which the
multiple procedure discount does not apply, the procedure is not
bilateral, and conditionally packaged services (status indicator of
``Q1'' and ``Q2'') qualify for separate payment. We note that, although
blood and blood products with status indicator ``R'' and brachytherapy
sources with status indicator ``U'' are not subject to wage adjustment,
they are subject to reduced payments when a hospital fails to meet the
Hospital OQR Program requirements.
Individual providers interested in calculating the payment amount
that they will receive for a specific service from the national
unadjusted payment rates presented in Addenda A and B to this proposed
rule (which are available via the internet on the CMS website) should
follow the formulas presented in the following steps. For purposes of
the payment calculations below, we refer to the national unadjusted
payment rate for hospitals that meet the requirements of the Hospital
OQR Program as the ``full'' national unadjusted payment rate. We refer
to the national unadjusted payment rate for hospitals that fail to meet
the requirements of the Hospital OQR Program as the ``reduced''
national unadjusted payment rate. The reduced national unadjusted
payment rate is calculated by multiplying the reporting ratio of 0.9805
times the ``full'' national unadjusted payment rate. The national
unadjusted payment rate used in the calculations below is either the
full national unadjusted payment rate or the reduced national
unadjusted payment rate, depending on whether the hospital met its
Hospital OQR Program requirements to receive the full CY 2023 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/ASC 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 2023 under the IPPS,
reclassifications through the Medicare Geographic Classification Review
Board (MGCRB), section 1886(d)(8)(B) ``Lugar'' hospitals, and
reclassifications under section 1886(d)(8)(E) of the Act, as
implemented in Sec. 412.103 of the regulations. We propose to continue
to apply for the CY 2023 OPPS wage index any adjustments for the FY
2023 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 2023 OPPS, we refer readers to section II.C of this proposed
rule.
Step 3. Adjust the wage index of hospitals located in certain
qualifying counties that have a relatively high percentage of hospital
employees who reside in the county, but who work in a different county
with a higher wage index, in accordance with section 505 of Public Law
108-173. Addendum L to this proposed rule (which is available via the
internet on the CMS website) contains the qualifying counties and the
associated wage index increase developed for the proposed FY 2023 IPPS
wage index, which are listed in Table 3 associated with the FY 2023
IPPS proposed rule and available via the internet on the CMS website
at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. (Click on the link on the left side of
the screen titled ``FY 2023 IPPS Proposed Rule Home Page'' and select
``FY 2023 Proposed Rule Tables.'') This step is to be followed only if
the hospital is not reclassified or redesignated under section
1886(d)(8) or section 1886(d)(10) of the Act.
Step 4. Multiply the applicable wage index determined under Steps 2
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
The formula below is a mathematical representation of Step 4 and
adjusts the labor-related portion of the national unadjusted payment
rate for the specific service by the wage index.
Xa is the labor-related portion of the national unadjusted payment rate
(wage adjusted).
Xa = .60 * (national unadjusted payment rate) * applicable wage index.
Step 5. Calculate 40 percent (the nonlabor-related portion) of the
national unadjusted payment rate and add that amount to the resulting
product of Step 4. The result is the wage index adjusted payment rate
for the relevant wage index area.
The formula below is a mathematical representation of Step 5 and
calculates the remaining portion of the national payment rate, the
amount not attributable to labor, and the adjusted payment for the
specific service.
Y is the nonlabor-related portion of the national unadjusted payment
rate.
Y = .40 * (national unadjusted payment rate).
Adjusted Medicare Payment = Y + Xa.
Step 6. If a provider is an SCH, as set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be an
[[Page 44536]]
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 2023 full
national unadjusted payment rate for APC 5071 is $659.86. The proposed
reduced national adjusted payment rate for APC 5071 for a hospital that
fails to meet the Hospital OQR Program requirements is $646.99. This
proposed reduced rate is calculated by multiplying the reporting ratio
of 0.9805 by the full unadjusted payment rate for APC 5071.
The FY 2023 wage index for a provider located in CBSA 35614 in New
York, which includes the proposed adoption of IPPS 2023 wage index
policies, is 1.3296. The labor-related portion of the proposed full
national unadjusted payment is approximately $526.42 (.60 * $659.86 *
1.3296). The labor-related portion of the proposed reduced national
adjusted payment is approximately $516.14 (.60 * $646.99 * 1.3296). The
nonlabor-related portion of the proposed full national unadjusted
payment is approximately $263.94 (.40 * $659.86). The nonlabor-related
portion of the proposed reduced national adjusted payment is
approximately $258.80 (.40 * $646.99). The sum of the labor-related and
nonlabor-related portions of the proposed full national unadjusted
payment is approximately $790.36 ($526.42 + $263.94). The sum of the
portions of the proposed reduced national adjusted payment is
approximately $774.94 ($516.14 + $258.80).
I. Proposed Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act requires the Secretary to set
rules for determining the unadjusted copayment amounts to be paid by
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
the Act specifies that the Secretary must reduce the national
unadjusted copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the effective
copayment rate (determined on a national unadjusted basis) for that
service in the year does not exceed a specified percentage. As
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective
copayment rate for a covered OPD service paid under the OPPS in CY
2006, and in CYs thereafter, shall not exceed 40 percent of the APC
payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered
OPD service (or group of such services) furnished in a year, the
national unadjusted copayment amount cannot be less than 20 percent of
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the
Act limits the amount of beneficiary copayment that may be collected
for a procedure (including items such as drugs and biologicals)
performed in a year to the amount of the inpatient hospital deductible
for that year.
Section 4104 of the Affordable Care Act eliminated the Medicare
Part B coinsurance for preventive services furnished on and after
January 1, 2011, that meet certain requirements, including flexible
sigmoidoscopies and screening colonoscopies, and waived the Part B
deductible for screening colonoscopies that become diagnostic during
the procedure. 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).
Section 122 of the Consolidated Appropriations Act (CAA) of 2021
(Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal
Cancer Screening Tests, amends section 1833(a) of the Act to offer a
special coinsurance rule for screening flexible sigmoidoscopies and
screening colonoscopies, regardless of the code that is billed for the
establishment of a diagnosis as a result of the test, or for the
removal of tissue or other matter or other procedure, that is furnished
in connection with, as a result of, and in the same clinical encounter
as the colorectal cancer screening test. We refer readers to section
X.B, ``Changes to Beneficiary Coinsurance for Certain Colorectal Cancer
Screening Tests'' of the CY 2022 OPPS/ASC final rule with comment
period for the full discussion of this policy (86 FR 63740 through
63743). Under the regulation at 42 CFR 410.152(l)(5)(i)(B), the
Medicare Part B payment percentage for colorectal cancer screening
tests described in the regulation at Sec. 410.37(j) that are furnished
in CY 2023 through 2026 (and the corresponding reduction in
coinsurance) is 85 percent (with beneficiary coinsurance equal to 15
percent).
2. Proposed OPPS Copayment Policy
For CY 2023, we propose to determine copayment amounts for new and
revised APCs using the same methodology that we implemented beginning
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule
with comment period (68 FR 63458).) In addition, we propose to use the
same standard rounding principles that we have historically used in
instances where the application of our standard copayment methodology
would result in a copayment amount that is less than 20 percent and
cannot be rounded, under standard rounding principles, to 20 percent.
(We refer readers to the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66687) in which we discuss our rationale for applying
these rounding principles.) The proposed national unadjusted copayment
amounts for services payable under the OPPS that would be effective
January 1, 2023 are included in Addenda A and B to this proposed rule
(which are available via the internet on the CMS website).
As discussed in section XIV.E of this proposed rule, for CY 2023,
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
[[Page 44537]]
beneficiary copayments closer to 20 percent of OPPS APC payments (68 FR
63458 through 63459).
In the CY 2004 OPPS final rule with comment period (68 FR 63459),
we adopted a new methodology to calculate unadjusted copayment amounts
in situations including reorganizing APCs, and we finalized the
following rules to determine copayment amounts in CY 2004 and
subsequent years.
When an APC group consists solely of HCPCS codes that were
not paid under the OPPS the prior year because they were packaged or
excluded or are new codes, the unadjusted copayment amount would be 20
percent of the APC payment rate.
If a new APC that did not exist during the prior year is
created and consists of HCPCS codes previously assigned to other APCs,
the copayment amount is calculated as the product of the APC payment
rate and the lowest coinsurance percentage of the codes comprising the
new APC.
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
equal to or greater than the prior year's rate, the copayment amount
remains constant (unless the resulting coinsurance percentage is less
than 20 percent).
If no codes are added to or removed from an APC and, after
recalibration of its relative payment weight, the new payment rate is
less than the prior year's rate, the copayment amount is calculated as
the product of the new payment rate and the prior year's coinsurance
percentage.
If HCPCS codes are added to or deleted from an APC and,
after recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in a decrease in the coinsurance
percentage for the reconfigured APC, the copayment amount would not
change (unless retaining the copayment amount would result in a
coinsurance rate less than 20 percent).
If HCPCS codes are added to an APC and, after
recalibrating its relative payment weight, holding its unadjusted
copayment amount constant results in an increase in the coinsurance
percentage for the reconfigured APC, the copayment amount would be
calculated as the product of the payment rate of the reconfigured APC
and the lowest coinsurance percentage of the codes being added to the
reconfigured APC.
We noted in the CY 2004 OPPS final rule with comment period that we
would seek to lower the copayment percentage for a service in an APC
from the prior year if the copayment percentage was greater than 20
percent. We noted that this principle was consistent with section
1833(t)(8)(C)(ii) of the Act, which accelerates the reduction in the
national unadjusted coinsurance rate so that beneficiary liability will
eventually equal 20 percent of the OPPS payment rate for all OPPS
services to which a copayment applies, and with section 1833(t)(3)(B)
of the Act, which achieves a 20-percent copayment percentage when fully
phased in and gives the Secretary the authority to set rules for
determining copayment amounts for new services. We further noted that
the use of this methodology would, in general, reduce the beneficiary
coinsurance rate and copayment amount for APCs for which the payment
rate changes as the result of the reconfiguration of APCs and/or
recalibration of relative payment weights (68 FR 63459).
3. Proposed Calculation of an Adjusted Copayment Amount for an APC
Group
Individuals interested in calculating the national copayment
liability for a Medicare beneficiary for a given service provided by a
hospital that met or failed to meet its Hospital OQR Program
requirements should follow the formulas presented in the following
steps.
Step 1. Calculate the beneficiary payment percentage for the APC by
dividing the APC's national unadjusted copayment by its payment rate.
For example, using APC 5071, $131.98 is approximately 20 percent of the
full national unadjusted payment rate of $659.86. For APCs with only a
minimum unadjusted copayment in Addenda A and B to this proposed rule
(which are available via the internet on the CMS website), the
beneficiary payment percentage is 20 percent.
The formula below is a mathematical representation of Step 1 and
calculates the national copayment as a percentage of national payment
for a given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for APC/national unadjusted payment
rate for APC.
Step 2. Calculate the appropriate wage-adjusted payment rate for
the APC for the provider in question, as indicated in Steps 2 through 4
under section II.H. of this proposed rule. Calculate the rural
adjustment for eligible providers, as indicated in Step 6 under section
II.H. of this proposed rule.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC.
The formula below is a mathematical representation of Step 3 and
applies the beneficiary payment percentage to the adjusted payment rate
for a service calculated under section II.H of this proposed rule, with
and without the rural adjustment, to calculate the adjusted beneficiary
copayment for a given service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
* B.
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
Medicare Payment * 1.071) * B.
Step 4. For a hospital that failed to meet its Hospital OQR Program
requirements, multiply the copayment calculated in Step 3 by the
reporting ratio of 0.9805.
The unadjusted copayments for services payable under the OPPS that
would be effective January 1, 2023 are shown in Addenda A and B to this
proposed rule (which are available via the internet on the CMS
website). We note that the proposed national unadjusted payment rates
and copayment rates shown in Addenda A and B to this proposed rule
reflect the proposed CY 2023 OPD increase factor discussed in section
II.B of this proposed rule.
In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act
limits the amount of beneficiary copayment that may be collected for a
procedure performed in a year to the amount of the inpatient hospital
deductible for that year.
III. Proposed OPPS Ambulatory Payment Classification (APC) Group
Policies
A. Proposed OPPS Treatment of New and Revised HCPCS Codes
Payments for OPPS procedures, services, and items are generally
based on medical billing codes, specifically, HCPCS codes, that are
reported on HOPD claims. HCPCS codes are used to report surgical
procedures, medical services, items, and supplies under the hospital
OPPS. 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 that is established and maintained by the American
Medical Association (AMA), and consists of Category I, II, III, MAAA,
and PLAA CPT codes. Level II, which is established and maintained by
CMS, is a standardized coding system that is used primarily to identify
products,
[[Page 44538]]
supplies, and services not included in the CPT codes. Together, Level I
and II HCPCS codes are used to report procedures, services, items, and
supplies under the OPPS payment system. Specifically, we recognize 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;
MAAA CPT codes, which describe laboratory multianalyte
assays with algorithmic analyses (MAA);
PLA CPT codes, which describe proprietary laboratory
analyses (PLA) services; 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.
The 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 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. The items, procedures,
or services not exclusively paid separately under the hospital OPPS are
assigned to appropriate status indicators. Certain payment status
indicators provide separate payment while other payment status
indicators do not. In section XI of this proposed rule, specifically,
the ``Proposed CY 2023 Payment Status and Comment Indicators'' section,
we discuss the various status indicators used under the OPPS. We also
provide a complete list of the proposed status indicators and their
definitions in Addendum D1 to this proposed rule.
1. April 2022 HCPCS Codes for Which We Are Soliciting Public Comments
in This Proposed Rule
For the April 2022 update, 48 new HCPCS codes were established and
made effective on April 1, 2022. Through the April 2022 OPPS quarterly
update CR (Transmittal 11305, Change Request 12666, dated March 24,
2022), we recognized several new HCPCS codes for separate payment under
the OPPS. In this proposed rule, we are soliciting public comments on
the proposed APC and status indicator assignments for the codes listed
in Table 5 (New HCPCS Codes Effective April 1, 2022). The proposed
status indicator, APC assignment, and payment rate for each HCPCS code
can be found in Addendum B to this proposed rule. We note that in prior
years we included the proposed OPPS status indicators and APC
assignments in the coding preamble tables, however, because the same
information can be found in Addendum B, we are no longer including them
in Table 5. Therefore, readers are advised to refer to the OPPS
Addendum B for the OPPS status indicator, APC assignment, and payment
rates for all codes reportable under the hospital OPPS. The new codes
effective April 1, 2022 are assigned to comment indicator ``NP'' in
Addendum B to this proposed rule to indicate that the codes are
assigned to an interim APC assignment and comments will be accepted on
their interim APC assignments. The complete list of proposed status
indicators and definitions used under the OPPS can be found in Addendum
D1 to this proposed rule, while the complete list of proposed comment
indicators and definitions can be found in Addendum D2. We note that
OPPS Addendum B (OPPS payment file by HCPCS code), Addendum D1 (OPPS
Status Indicators), and Addendum D2 (OPPS Comment Indicators) are
available via the internet on the CMS website.
BILLING CODE 4120-01-P
[[Page 44539]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.008
[[Page 44540]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.009
[[Page 44541]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.010
[[Page 44542]]
2. July 2022 HCPCS Codes for Which We Are Soliciting Public Comments in
This Proposed Rule
For the July 2022 update, 63 new codes were established and made
effective July 1, 2022. Through the July 2022 OPPS quarterly update CR
(Transmittal 11457, Change Request 12761, dated June 15, 2022), we
recognized several new codes for separate payment and assigned them to
appropriate interim OPPS status indicators and APCs. In this CY 2023
OPPS/ASC proposed rule, we are soliciting public comments on the
proposed APC and status indicator assignments for the codes listed in
Table 6 (New HCPCS Codes Effective July 1, 2022). The proposed status
indicator, APC assignment, and payment rate for each HCPCS code can be
found in Addendum B to this proposed rule. We note that in prior years
we included the proposed OPPS status indicators and APC assignments in
the coding preamble tables, however, because the same information can
be found in Addendum B, we are no longer including them in Table 6.
Therefore, readers are advised to refer to the OPPS Addendum B for the
OPPS status indicator, APC assignment, and payment rates for all codes
reportable under the hospital OPPS. The complete list of proposed
status indicators and corresponding definitions used under the OPPS can
be found in Addendum D1 to this proposed rule. In addition, the new
codes are assigned to comment indicator ``NP'' in Addendum B to this
proposed rule to indicate that the codes are assigned to an interim APC
assignment and comments will be accepted on their interim APC
assignments. The complete list of proposed comment indicators and
definitions used under the OPPS can be found in Addendum D2 to this
proposed rule. We note that OPPS Addendum B (OPPS payment file by HCPCS
code), Addendum D1 (OPPS Status Indicators), and Addendum D2 (OPPS
Comment Indicators) are available via the internet on the CMS website.
[[Page 44543]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.011
[[Page 44544]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.012
[[Page 44545]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.013
[[Page 44546]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.014
3. October 2022 HCPCS Codes for Which We Will Be Soliciting Public
Comments in the CY 2023 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we will solicit comments on
the new CPT and Level II HCPCS codes that will be effective October 1,
2022, in the CY 2023 OPPS/ASC final rule with comment period, thereby
allowing us to finalize the status indicators and APC assignments for
the codes in the CY 2024 OPPS/ASC final rule with comment period. The
HCPCS codes will be released to the public through the October 2022
OPPS Update CR and the CMS HCPCS website while the CPT codes will be
released to the public through the AMA website.
For CY 2023, we propose to continue our established policy of
assigning comment indicator ``NI'' in Addendum B to the CY 2023 OPPS/
ASC final rule with comment period to those new HCPCS codes that will
be effective October 1, 2022, to indicate that we are assigning them an
interim status indicator, which is subject to public comment. We will
be inviting public comments in the CY 2023 OPPS/ASC final rule with
comment period on the status indicator and APC assignments, which would
then be finalized in the CY 2024 OPPS/ASC final rule with comment
period.
4. January 2023 HCPCS Codes
a. New Level II HCPCS Codes for Which We Will Be Soliciting Public
Comments in the CY 2023 OPPS/ASC Final Rule With Comment Period
Consistent with past practice, we will solicit comments on the new
Level II HCPCS codes that will be effective January 1, 2023, in the CY
2023 OPPS/ASC final rule with comment period, thereby allowing us to
finalize the status indicators and APC assignments for the codes in the
CY 2024 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 proposed new C-codes and G-codes listed in
Addendum O of this proposed rule, most Level II HCPCS codes are not
released until sometime around November to be effective January 1.
Because these codes are not available until November, we are unable to
include them in the OPPS/ASC proposed rules. Consequently, for CY 2023,
we propose to include in Addendum B to the CY 2023 OPPS/ASC final rule
with comment period the new Level II HCPCS codes effective January 1,
2023, that would be incorporated in the January 2023 OPPS quarterly
update CR. Specifically, for CY 2023, we propose to continue our
established policy of assigning comment indicator ``NI'' in Addendum B
to the CY 2023 OPPS/ASC final rule with comment period to the new HCPCS
codes that will be effective January 1, 2023, to indicate that we are
assigning them an interim status indicator, which is subject to public
comment. We will be inviting public comments in the CY 2023 OPPS/ASC
final rule with comment period on the status indicator and APC
assignments, which would then be finalized in the CY 2024 OPPS/ASC
final rule with comment period.
b. CPT Codes for Which We Are Soliciting Public Comments in This
Proposed Rule
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
through 66844), we finalized a revised process of assigning APC and
status indicators for new and revised Category I and III CPT codes that
would be effective January 1. Specifically, for the new/revised CPT
codes that we receive in a timely manner from the AMA's CPT Editorial
Panel, we finalized our proposal to include the codes that would be
effective January 1 in the OPPS/ASC proposed rules, along with proposed
APC and status indicator assignments for them, and to finalize the APC
and status indicator assignments in the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For those new/revised CPT codes that were
received too late for inclusion in the OPPS/ASC proposed rule, we
finalized our proposal to establish and use HCPCS G-codes that mirror
the predecessor CPT codes and retain the current APC and status
indicator assignments for a year until we can propose APC and status
indicator assignments in the following year's rulemaking cycle. We note
that even if
[[Page 44547]]
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 2023 OPPS update, we received the CPT codes that will be
effective January 1, 2023 from the AMA in time to be included in this
proposed rule. The new, revised, and deleted CPT codes can be found in
Addendum B to this proposed rule (which is available via the internet
on the CMS website). We note that the new and revised CPT codes are
assigned to comment indicator ``NP'' in Addendum B of this proposed
rule to indicate that the code is new for the next calendar year or the
code is an existing code with substantial revision to its code
descriptor in the next calendar year as compared to the current
calendar year with a proposed APC assignment, and that comments will be
accepted on the proposed APC assignment and status indicator.
Further, we note that the CPT code descriptors that appear in
Addendum B are short descriptors and do not accurately describe the
complete procedure, service, or item described by the CPT code.
Therefore, we are including the 5-digit placeholder codes and the long
descriptors for the new and revised CY 2023 CPT codes in Addendum O to
this proposed rule (which is available via the internet on the CMS
website) so that the public can adequately comment on our proposed APCs
and status indicator assignments. The 5-digit placeholder codes can be
found in Addendum O, specifically under the column labeled ``CY 2023
OPPS/ASC Proposed Rule 5-Digit AMA Placeholder Code''. The final CPT
code numbers will be included in the CY 2023 OPPS/ASC final rule with
comment period.
In summary, we are soliciting public comments on the proposed CY
2023 status indicators and APC assignments for the new and revised CPT
codes that will be effective January 1, 2023. Because the CPT codes
listed in Addendum B appear with short descriptors only, we list them
again in Addendum O to this proposed rule with long descriptors. In
addition, we propose to finalize the status indicator and APC
assignments for these codes (with their final CPT code numbers) in the
CY 2023 OPPS/ASC final rule with comment period. The proposed status
indicator and APC assignments for these codes can be found in Addendum
B to this proposed rule. In addition, the complete list of proposed
comment indicators and definitions used under the OPPS can be found in
Addendum D2 to this proposed rule. We note that OPPS Addendum B (OPPS
payment file by HCPCS code), Addendum D1 (OPPS Status Indicators), and
Addendum D2 (OPPS Comment Indicators) are available via the internet on
the CMS website.
Finally, in Table 7 (Comment and Finalization Timeframes for New
and Revised OPPS-Related HCPCS Codes) below, we summarize our current
process for updating codes through our OPPS quarterly update CRs,
seeking public comments, and finalizing the treatment of these codes
under the OPPS.
[[Page 44548]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.015
B. Proposed OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered hospital outpatient department
services. Section 1833(t)(2)(B) of the Act provides that the Secretary
may establish groups of covered OPD services within this classification
system, so that services classified within each group are comparable
clinically and with respect to the use of resources. In accordance with
these provisions, we developed a grouping classification system,
referred to as Ambulatory Payment Classifications (APCs), as set forth
in regulations at 42 CFR 419.31. We use Level I (also known as CPT
codes) and Level II HCPCS codes (also known as alphanumeric codes) to
identify and group the services within each APC. The APCs are organized
such that each group is homogeneous both clinically and in terms of
resource use. Using this classification system, we have established
distinct groups of similar services. We also have developed separate
APC groups for certain medical devices, drugs, biologicals, therapeutic
radiopharmaceuticals, and brachytherapy devices that are not packaged
into the payment for the procedure.
We have packaged into the payment for each procedure or service
within an APC group the costs associated with those items and services
that are typically ancillary and supportive to a primary diagnostic or
therapeutic modality and, in those cases, are an integral part of the
primary service they support. Therefore, we do not make separate
payment for these packaged items or services. In general, packaged
items and services include, but are not limited to, the items and
services listed in regulations at 42 CFR 419.2(b). A further discussion
of packaged services is included in section II.A.3 of this proposed
rule.
Under the OPPS, we generally pay for covered hospital outpatient
services on a rate-per-service basis, where the service may be reported
with one or more HCPCS codes. Payment varies according to the APC group
to which the independent service or combination of services is
assigned. For CY 2023, we propose that each APC relative payment weight
represents the hospital cost of the services included in that APC,
relative to the hospital cost of the services included in APC 5012
(Clinic Visits and Related Services). The APC relative payment weights
are scaled to APC 5012 because it is the hospital clinic visit APC and
clinic visits are among the most frequently furnished services in the
hospital outpatient setting.
2. Application of the 2 Times Rule
Section 1833(t)(9)(A) of the Act requires the Secretary to review,
not less often than annually, and revise the APC groups, the relative
payment weights, and the wage and other adjustments described in
paragraph (2) to take into account changes in medical practice, changes
in technology, the addition of new services, new cost data, and other
relevant information and factors. Section 1833(t)(9)(A) of the Act also
requires the Secretary to consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
review
[[Page 44549]]
(and advise the Secretary concerning) the clinical integrity of the APC
groups and the relative payment weights. We note that the Advisory
Panel on Hospital Outpatient Payment (also known as the HOP Panel or
the Panel) recommendations for specific services for the CY 2023 OPPS
update will be discussed in the relevant specific sections throughout
the CY 2023 OPPS/ASC final rule with comment period.
In addition, section 1833(t)(2) of the Act provides that, subject
to certain exceptions, the items and services within an APC group
cannot be considered comparable with respect to the use of resources if
the highest cost for an item or service in the group is more than 2
times greater than the lowest cost for an item or service within the
same group (referred to as the ``2 times rule''). The statute
authorizes the Secretary to make exceptions to the 2 times rule in
unusual cases, such as for low-volume items and services (but the
Secretary may not make such an exception in the case of a drug or
biological that has been designated as an orphan drug under section 526
of the Federal Food, Drug, and Cosmetic Act). In determining the APCs
with a 2 times rule violation, we consider only those HCPCS codes that
are significant based on the number of claims. We note that, for
purposes of identifying significant procedure codes for examination
under the 2 times rule, we consider procedure codes that have more than
1,000 single major claims or procedure codes that both have more than
99 single major claims and contribute at least 2 percent of the single
major claims used to establish the APC cost to be significant (75 FR
71832). This longstanding definition of when a procedure code is
significant for purposes of the 2 times rule was selected because we
believe that a subset of 1,000 or fewer claims is negligible within the
set of approximately 100 million single procedure or single session
claims we use for establishing costs. Similarly, a procedure code for
which there are fewer than 99 single claims and that comprises less
than 2 percent of the single major claims within an APC will have a
negligible impact on the APC cost (75 FR 71832). In this section of
this proposed rule, for CY 2023, we propose to make exceptions to this
limit on the variation of costs within each APC group in unusual cases,
such as for certain low-volume items and services.
For the CY 2023 OPPS update, we identified the APCs with violations
of the 2 times rule and we propose changes to the procedure codes
assigned to these APCs (with the exception of those APCs for which we
propose a 2 times rule exception) in Addendum B to this proposed rule.
We note that Addendum B does not appear in the printed version of the
Federal Register as part of this 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 in the APCs
for which we are not proposing a 2 times rule exception, we propose to
reassign these procedure codes to new APCs that contain services that
are similar with regard to both their clinical and resource
characteristics. In many cases, the proposed procedure code
reassignments and associated APC reconfigurations for CY 2023 included
in this proposed rule are related to changes in costs of services that
were observed in the CY 2021 claims data available for CY 2023
ratesetting. Addendum B to this CY 2023 OPPS/ASC proposed rule
identifies with a comment indicator ``CH'' those procedure codes for
which we propose a change to the APC assignment or status indicator, or
both, that were initially assigned in the July 1, 2022 OPPS Addendum B
Update (available via the internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates.html).
3. Proposed APC Exceptions to the 2 Times Rule
Taking into account the APC changes that we propose to make for CY
2023, we reviewed all of the APCs for which we identified 2 times rule
violations to determine whether any of the APCs would qualify for an
exception. 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.
For a detailed discussion of these criteria, we refer readers to
the April 7, 2000 final rule (65 FR 18457 through 18458).
Based on the CY 2021 claims data available for this proposed rule,
we found 23 APCs with violations of the 2 times rule. We applied the
criteria as described above to identify the APCs for which we propose
to make exceptions under the 2 times rule for CY 2023 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 2021 claims data available for this
proposed rule. We note that, on an annual basis, based on our analysis
of the latest claims data, we identify violations to the 2 times rule
and propose changes when appropriate. Those APCs that violate the 2
times rule are identified and appear in Table 8 below. In addition, we
did not include in that determination those APCs where a 2 times rule
violation was not a relevant concept, such as APC 5401 (Dialysis),
which only has two HCPCS codes assigned to it that have similar
geometric mean costs and do not create a 2 times rule violation.
Therefore, we have only identified those APCs, including those with
criteria-based costs, such as device-dependent CPT/HCPCS codes, with
violations of the 2 times rule, where a 2 times rule violation is a
relevant concept.
Table 8 of this proposed rule lists the 23 APCs for which we
propose to make an exception under the 2 times rule for CY 2023 based
on the criteria cited above and claims data submitted between January
1, 2021 and December 31, 2021 and processed on or before December 31,
2021, and CCRs, if available. The proposed geometric mean costs for
covered hospital outpatient services for these and all other APCs that
were used in the development of this proposed rule can be found on the
CMS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
[[Page 44550]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.016
BILLING CODE 4120-01-C
C. Proposed New Technology APCs
1. Background
In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes
to the time period in which a service can be eligible for payment under
a New Technology APC. Beginning in CY 2002, we retain services within
New Technology APC groups until we gather sufficient claims data to
enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected.
We also adopted in the CY 2002 OPPS final rule the following
criteria for assigning a complete or comprehensive service to a New
Technology APC: 1) the service must be truly new, meaning it cannot be
appropriately reported by an existing HCPCS code assigned to a clinical
APC and does not appropriately fit within an existing clinical APC; 2)
the service is not eligible for transitional pass-through payment
(however, a truly new, comprehensive service could qualify for
assignment to a new technology APC even if it involves a device or drug
that could, on its own, qualify for a pass-through payment); and 3) the
service falls within the scope of Medicare benefits under section
1832(a) of the Act and is reasonable and necessary in accordance with
section 1862(a)(1)(A) of the Act (66 FR 59898 through 59903). For
additional information about our New Technology APC policy, we refer
readers to https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment on the CMS website
and then follow the instructions to access the MEARIS\TM\ system for
OPPS New Technology APC applications.
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
[[Page 44551]]
services more appropriately and consistently.
For CY 2022, 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. 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 2023,
we include the proposed payment rates for New Technology APCs 1491 to
1599 and 1901 through 1908 in Addendum A to this 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 significant
contributors 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 58892), 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 adopted a
policy in the CY 2019 OPPS/ASC final rule with comment period 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 (83 FR 58892 through 58893).
For purposes of this adjustment, we stated in the CY 2019 OPPS/ASC
final rule with comment period 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 an annual claims volume of fewer than 100 claims
(83 FR 58893). 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 also stated that 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
[[Page 44552]]
on any statistical methodology used to estimate the most appropriate
payment rate for a service. Also, having the flexibility to utilize an
alternative statistical methodology to calculate the payment rate in
the case of low-volume new technology services helps to create a more
stable payment rate.
In the CY 2019 OPPS/ASC final rule (83 FR 58893), we implemented a
policy that we would seek public comments on which statistical
methodology should be used to determine the payment rate 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 interested parties, 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.
In the CY 2022 OPPS/ASC final rule with comment period, we adopted
a policy to continue to utilize our equitable adjustment authority
under section 1833(t)(2)(E) of the Act to calculate the geometric mean,
arithmetic mean, and median using up to four years of claims data to
select the appropriate payment rate for purposes of assigning services
with fewer than 100 claims per year to a New Technology APC (86 FR
63529). However, we replaced our specific low-volume New Technology APC
policy with the universal low volume APC policy that we adopted
beginning in CY 2022. Our universal low volume APC policy is similar to
our past New Technology APC low volume policy except that the universal
low volume APC policy applies to clinical APCs and brachytherapy APCs
as well as low volume procedures assigned to New Technology APCs, and
uses the highest of the geometric mean, arithmetic mean, or median
based on up to 4 years of claims data to assign a procedure with fewer
than 100 claims per year to an appropriate New Technology APC. For this
proposed rule, we propose to designate three procedures assigned to New
Technology APCs as low volume procedures and use the highest of the
geometric mean, arithmetic mean, or median based on up to 4 years of
claims data to assign such procedures to the appropriate New Technology
APCs.
3. Procedures Assigned to New Technology APC Groups for CY 2023
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 2023, we propose to
retain services within New Technology APC groups until we obtain
sufficient claims data to justify reassignment of the service to an
appropriate clinical APC. The flexibility associated with this policy
allows us to reassign a service from a New Technology APC in less than
2 years if we have obtained sufficient claims data. It also allows us
to retain a service in a New Technology APC for more than 2 years if we
have not obtained sufficient claims data upon which to base a
reassignment decision (66 FR 59902).
a. Retinal Prosthesis Implant Procedure
CPT code 0100T (Placement of a subconjunctival retinal prosthesis
receiver and pulse generator, and implantation of intra-ocular retinal
electrode array, with vitrectomy) describes the implantation of a
retinal prosthesis, specifically, a procedure involving the use of the
Argus[supreg] II Retinal Prosthesis System. This first retinal
prosthesis was approved by FDA in 2013 for adult patients diagnosed
with severe to profound retinitis pigmentosa. For information on the
utilization and payment history of the Argus[supreg] II procedure and
the Argus[supreg] II device through CY 2022, please refer to the CY
2022 OPPS final rule (86 FR 63529 through 63530).
Early in 2022, we learned that the manufacturer of the
Argus[supreg] II device discontinued manufacturing the device in 2020.
We also contacted the consultant who represented the manufacturer in
presentations with CMS, and he confirmed that the Argus[supreg] II
device is no longer being implanted. A review of OPPS claims data found
that there were no claims billed for CPT code 0100T in either CY 2020
or CY 2021. Based on this information, we have determined that the
Argus[supreg] II device is no longer available in the marketplace and
that outpatient hospital providers are no longer performing the
Argus[supreg] II implantation procedure. Therefore, we propose to make
changes to the OPPS status indicators for HCPCS and CPT codes that are
related to the Argus[supreg] II device and the Argus[supreg] II
implantation procedure to indicate that Medicare payment is no longer
available for the device and the implementation procedure as the
Argus[supreg] II device is no longer on the market and therefore, is
not being implanted. These coding changes would mean that providers
could no longer receive payment for performing the Argus[supreg] II
device or the device implantation procedure. These changes are
described in Table 9.
[[Page 44553]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.017
b. Administration of Subretinal Therapies Requiring Vitrectomy (APC
1562)
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 (Vitrectomy,
mechanical, pars plana approach) due to similar resource utilization.
For CY 2021, HCPCS code C9770 was assigned to APC 1561 (New
Technology--Level 24 ($3,001-$3,500)). This code 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 depth in the CY 2021 OPPS/ASC final rule with
comment period (85 FR 85939 through 85940). For CY 2022, we maintained
the APC assignment of APC 1561 (New Technology--Level 24 ($3,001-
$3,500)) for HCPCS code C9770 (86 FR 63531 through 63532).
CPT code J3398 (Injection, voretigene neparvovec-rzyl, 1 billion
vector genomes) is for a gene therapy product indicated for a rare
mutation-associated retinal dystrophy. Voretigene neparvovec-rzyl
(Luxturna[supreg]) was approved by FDA in December of 2017 and is an
adeno-associated virus vector-based gene therapy indicated for the
treatment of patients with confirmed biallelic RPE65 mutation-
associated retinal dystrophy.\2\ This therapy is administered through a
subretinal injection, which interested parties 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.''
---------------------------------------------------------------------------
\2\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download.
---------------------------------------------------------------------------
Interested parties, including the manufacturer of Luxturna[supreg],
recommended HCPCS code 67036 (Vitrectomy, mechanical, pars plana
approach) for the administration of the gene therapy.\3\ 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.
---------------------------------------------------------------------------
\3\ LUXTURNA REIMBURSEMENT GUIDE FOR TREATMENT CENTERS. https://mysparkgeneration.com/pdf/Reimbursement_Guide_for_Treatment_Centers_Interactive_010418_FINAL.pdf.
---------------------------------------------------------------------------
CMS recognized the need to accurately describe the unique 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 to
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. 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. For CY
2022, we continued to assign HCPCS code C9770 to APC 1561 (New
Technology--Level 24 ($3,001-$3,500)) using the geometric mean cost of
HCPCS code 67036.
For CY 2023, there are 11 single claims available for ratesetting
for HCPCS code C9770. Because this is the first year we have claims
data for HCPCS code C9770, we propose to base the payment rate of HCPCS
code C9770 on claims data for that code rather than on the geometric
mean cost of HCPCS code 67036. Given the low number of claims for this
procedure, we propose to designate HCPCS C9770 as a low volume
procedure under our universal low volume APC policy and use the greater
of the geometric mean, arithmetic mean, or median cost calculated based
on the available claims data to calculate an appropriate payment rate
for purposes of assigning C9770 to a New Technology APC.
Using CY 2021 claims, which are the only claims available in our 4-
year look back period, we found the geometric mean cost for the service
to be
[[Page 44554]]
approximately $3,326, the arithmetic mean cost to be approximately
$3,466, and the median cost to be approximately $3,775. The median was
the statistical methodology that estimated the highest cost for the
service. The payment rate calculated using this methodology falls
within the cost band for New Technology APC 1562 (New Technology--Level
25 ($3,501-$4,000)). Therefore, we propose to assign HCPCS code C9770
to APC 1562 for CY 2023.
Please refer to Table 10 below for the proposed OPPS New Technology
APC and status indicator assignments for HCPCS code C9770 for CY 2023.
The proposed CY 2023 payment rates can be found in Addendum B to this
proposed rule.
[GRAPHIC] [TIFF OMITTED] TP26JY22.018
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. 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.
In CY 2022, we used again the claims data from CY 2019 for HCPCS
code C9751. Since the claims data was unchanged from when it was used
in CY 2021, the values for the geometric mean cost ($2,693), the
arithmetic mean cost ($3,086), and the median cost ($3,708) for the
service described by HCPCS code C9751 remained the same. The highest
cost metric using these methodologies was again the median and within
the cost band for New Technology APC 1562 (New Technology--Level 25
($3,501-$4,000)). Therefore, we continued to assign HCPCS code C9751 to
APC 1562 (New Technology--Level 25 ($3,501- $4,000)), with a payment
rate of $3,750.50 for CY 2022.
There were no claims reported in CY 2020 or CY 2021 for HCPCS code
C9751. Thus, for CY 2023, the only available claims for HCPCS code
C9751 continue to be from CY 2019, and the reported claims are the same
claims used to calculate the payment rate for the service in the CY
2021 and CY 2022 OPPS/ASC final rules with comment period. Therefore,
given the low number of claims for this procedure, we propose to
designate this procedure as low volume under our universal low volume
policy and use the highest of the geometric mean cost, arithmetic mean
cost, or median cost based on up to 4 years of claims data to assign
the procedure to the appropriate New Technology APCs. Because our
proposal uses the same claims as we used for CY 2021 and CY 2022, we
found the same values for the geometric mean cost, arithmetic mean
cost, and the median cost for CY 2023. Once again, the median ($3,708)
was the statistical methodology that estimated the highest cost for the
service. The payment rate calculated using this methodology continues
to fall within the cost band for New Technology APC 1562 (New
Technology--Level 25 ($3,501-$4,000)). Therefore, we propose to
continue to assign HCPCS code C9751 to APC 1562 (New Technology--Level
25 ($3,501-$4,000)), with a proposed payment rate of $3,750.50 for CY
2023. Details regarding HCPCS code C9751 are included in Table 11.
[[Page 44555]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.019
d. 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. CPT code 78431 was assigned to
APC 1522 (New Technology--Level 22 ($2,001-$2,500)) with a payment rate
of $2,250.50. CPT codes 78432 and 78433 were assigned to APC 1523 (New
Technology--Level 23 ($2,501-$3,000)) with a payment rate of $2,750.50.
We did not receive any claims data for these services for either of the
CY 2021 or CY 2022 OPPS proposed or final rules. Therefore, we
continued to assign CPT code 78431 to APC 1522 (New Technology--Level
22 ($2,001-$2,500)) with a payment rate of $2,250.50 in CY 2021 and CY
2022. Likewise, we continued to assign CPT codes 78432 and 78433 to APC
1523 (New Technology--Level 23 ($2,501-$3,000)) with a payment rate of
$2,750.50.
For CY 2023, we propose to use CY 2021 claims data to determine the
payment rates for CPT codes 78431, 78432, and 78433. CPT code 78431 had
over 18,000 single frequency claims in CY 2021, which are used to
calculate estimated costs for individual services. The geometric mean
for CPT code 78431 was approximately $2,509, which is an amount that is
above the cost band for APC 1522 (New Technology--Level 22 ($2,001-
$2,500)), where the procedure is currently assigned. We propose, for CY
2023, that CPT code 78431 be reassigned to APC 1523 (New Technology--
Level 23 ($2,501-$3,000)) with a payment rate of $2,750.50. Please
refer to Table 12 for the proposed New Technology APC and status
indicator assignments for CPT code 78431.
There were only 5 single frequency claims in CY 2021 for CPT code
78432. As this is below the threshold of 100 claims for a service
within a year, we propose to apply our universal low volume APC policy
and use the highest of the geometric mean cost, arithmetic mean cost,
or median cost based on up to 4 years of claims data to assign CPT code
78432 to the appropriate New Technology APC. Although we use up to four
years of claims data to calculate the appropriate New Technology APC
assignment for low volume procedures, for CPT code 78432, the only
available claims data are from CY 2021. Our analysis of the data found
the geometric mean cost of the service is approximately $1,747, the
arithmetic mean cost of the service is approximately $1,899, and the
median cost of the service is approximately $1,481. The arithmetic mean
was the statistical methodology that estimated the highest cost for the
service. Therefore, we propose, for CY 2023, to assign CPT code 78432
to APC 1520 (New Technology--Level 20 ($1,801-$1,900)) with a payment
rate of $1,850.50. Please refer to Table 12 for the proposed on New
Technology APC and status indicator assignments for CPT code 78432.
There were 954 single frequency claims reporting CPT code 78433 in
CY 2021. The geometric mean for CPT code 78433 was approximately
$1,999, which is an amount that is below the cost band for APC 1523
(New Technology--Level 23 ($2,501-$3,000)), where the procedure is
currently assigned. We propose, for CY 2023, that CPT code 78433 be
reassigned to APC 1521 (New Technology--Level 21 ($1,901-$2,000)) with
a payment rate of $1,950.50. Please refer to Table 12 for the proposed
New Technology APC and status indicator assignments for CPT code 78433.
BILLING CODE 4120-01-P
[[Page 44556]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.020
e. 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 had received the interatrial shunt because an
additional procedure code, CPT code 93799 (Unlisted cardiovascular
service or procedure), would be included on the claims for participants
receiving the interatrial shunt. Therefore, for CY 2020, we created a
temporary HCPCS code to describe the V-wave interatrial shunt procedure
for both the experimental group and the control group in the study.
Specifically, we established HCPCS code C9758 (Blinded procedure for
NYHA class III/IV heart failure; transcatheter implantation of
interatrial shunt or placebo control, including right heart
catheterization, trans-esophageal echocardiography (TEE)/intracardiac
echocardiography (ICE), and all imaging with or without guidance (for
example, ultrasound, fluoroscopy), performed in an approved
investigational device exemption (IDE) study) to describe the service,
and we assigned the service to New Technology APC 1589 (New
Technology--Level 38 ($10,001-$15,000)).
In the CY 2021 OPPS/ASC final rule with comment period (85 FR
85946), we stated that we believe similar resources and device costs
are involved with the V-Wave interatrial shunt procedure and the Corvia
Medical interatrial shunt procedure (HCPCS code C9760), except that
payment for HCPCS codes C9758 and C9760 differs based on how often the
interatrial shunt is implanted when
[[Page 44557]]
each code is billed. An interatrial shunt is implanted one-half of the
time HCPCS code C9758 is billed, whereas an interatrial shunt is
implanted every time HCPCS code C9760 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 the procedure is performed.
For CY 2022, we used the same claims data from CY 2019 that we did
for CY 2021 OPPS final rule. Because there were no claims reporting
HCPCS code C9758, we continued to assign HCPCS code C9758 to New
Technology APC 1590 with a payment rate of $17,500.50 for CY 2022.
For CY 2023, there were no claims from CY 2021 billed with HCPCS
code C9758. Because there are no claims reporting HCPCS code C9758, we
propose to continue to assign HCPCS code C9758 to New Technology APC
1590 with a payment rate of $17,500.50 for CY 2023. The proposed New
Technology APC and status indicator assignments for HCPCS codes C9758
are shown in Table 13.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP26JY22.021
f. Corvia Medical Interatrial Shunt Procedure (APC 1592)
Corvia Medical is currently conducting its pivotal trial for its
interatrial shunt procedure. The trial started in Quarter 1 of CY 2017
and continued through Quarter 3 of CY 2021.\4\ 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.
---------------------------------------------------------------------------
\4\ https://clinicaltrials.gov/ct2/show/NCT03088033?term=NCT03088033&rank=1.
---------------------------------------------------------------------------
As we stated in the CY 2021 OPPS final rule with comment period (85
FR 85947), we believe that similar resources and device costs are
involved with the Corvia Medical interatrial shunt procedure and the V-
Wave interatrial shunt procedure. Unlike the V-Wave interatrial shunt,
which is implanted half the time the associated interatrial shunt
procedure described by HCPCS code C9758 is billed, the Corvia Medical
interatrial shunt is implanted every time the associated interatrial
[[Page 44558]]
shunt procedure (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. In CY
2022, we used the same claims data as was used in the CY 2021 OPPS
final rule to determine the payment rate for HCPCS code C9760 because
there were no claims for this service in CY 2019, the year used for
ratesetting for CY 2022. Accordingly, we continued to assign HCPCS code
C9760 to New Technology APC 1592 in CY 2022.
For CY 2023, we propose to use the claims data from CY 2021 to
establish payment rates for services. However, there are no claims with
HCPCS code C9760 in the CY 2021 claims data available for ratesetting.
Therefore, we propose to continue to assign HCPCS code C9760 to New
Technology APC 1592. The proposed New Technology APC and status
indicator assignments for HCPCS code C9760 are shown in Table 14.
[GRAPHIC] [TIFF OMITTED] TP26JY22.022
g. Supervised Visits for Esketamine Self-Administration (APCs 1512 and
1516)
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 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 devices (for a 56 mg
dose) or three 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 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 two hours after
receiving their Spravato dose, the prescriber and patient must both
sign a Patient Enrollment Form, and the product must 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.
[[Page 44559]]
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 two hours of post-administration observation. HCPCS code G2082
was assigned to New Technology APC 1508 (New Technology--Level 8 ($601-
$700)) with a payment rate of $650.50. HCPCS code G2083 describes a
similar service to HCPCS code G2082 but involves the administration of
more than 56 mg of esketamine. HCPCS code G2083 was assigned to New
Technology APC 1511 (New Technology--Level 11 ($901-$1000)) with a
payment rate of $950.50.
For CY 2023, we propose to use CY 2021 claims data to determine the
payment rates for HCPCS codes G2082 and G2083. Therefore, for CY 2023,
we propose to assign these two HCPCS codes to New Technology APCs based
on the codes' geometric mean costs. Specifically, we propose to assign
HCPCS code G2082 to New Technology APC 1511 (New Technology--Level 11
($901-$1,000)) based on its geometric mean cost of $995.47. We also
propose to assign HCPCS code G2083 to New Technology APC 1516 (New
Technology--Level 16 ($1,401-$1,500)) based on its geometric mean cost
of $1,489.93.
Details about the proposed New Technology APC and status indicator
assignments for these HCPCS codes are shown in Table 15. The proposed
CY 2023 payment rates for these HCPCS codes can be found in Addendum B
to this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP26JY22.023
h. DARI Motion Procedure (APC 1505)
CPT code 0693T (Comprehensive full body computer-based markerless
3D kinematic and kinetic motion analysis and report) was 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. In
CY 2022, we assigned CPT code 0693T to New Technology APC 1505 (New
Technology--Level 5 ($301-$400)), for CY 2022.
This service became effective in the OPPS in CY 2022. Therefore,
there are no claims for this service in the CY 2021 OPPS claims data.
Accordingly, for CY 2023 we propose to continue assigning CPT code
0693T to New Technology APC 1505. The proposed New Technology APC and
status indicator assignments for CPT code 0693T are found in Table 16.
[[Page 44560]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.024
i. Histotripsy Service (APC 1575)
CPT code 0686T (Histotripsy (i.e., non-thermal ablation via
acoustic energy delivery) of malignant hepatocellular tissue, including
image guidance) was effective July 1, 2021. Histotripsy is a non-
invasive, non-thermal, mechanical process that uses a focused beam of
sonic energy to destroy cancerous liver tumors. We note that the device
that is used in the histotripsy procedure is currently under a Category
A IDE clinical study (NCT04573881). The clinical trial is a non-
randomized, prospective trial to evaluate the efficacy and safety of
the device for the treatment of primary or metastatic tumors located in
the liver.\5\ We note that devices from Category A IDE studies are
excluded from Medicare payment. Therefore, payment for CPT code 0686T
reflects only the service that is performed each time it is reported on
a claim. For CY 2022, we assigned CPT code 0686T to New Technology APC
1575 (New Technology--Level 38 ($10,000-$15,000) with a payment rate of
$12,500.
---------------------------------------------------------------------------
\5\ ClinicalTrials.gov. ``The HistoSonics System for Treatment
of Primary and Metastatic Liver Tumors Using Histotripsy
(#HOPE4LIVER) (#HOPE4LIVER).'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/study/NCT04573881.
---------------------------------------------------------------------------
Since the service became effective in the OPPS in July 2021, there
are no claims for this service in the CY 2021 OPPS claims data.
Therefore, for CY 2023, we propose to continue assigning CPT code 0686T
to New Technology APC 1575. The proposed New Technology APC and status
indicator assignments for CPT code 0686T are found in Table17.
[GRAPHIC] [TIFF OMITTED] TP26JY22.025
j. Liver Multiscan Service (APC 1511)
CPT code 0648T (Quantitative magnetic resonance for analysis of
tissue composition (e.g., fat, iron, water content), including
multiparametric data acquisition, data preparation and transmission,
interpretation and report, obtained without diagnostic mri examination
of the same anatomy (e.g., organ, gland, tissue, target structure)
during the same session; single organ) was effective July 1, 2021.
LiverMultiScan 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
[[Page 44561]]
patients' providers and analyzes the images using their proprietary
Artificial Intelligence (AI) algorithms. The SaaS then sends the
providers a quantitative metric report of the patient's liver fibrosis
and inflammation. For CY 2022, we assigned CPT code 0648T to New
Technology APC 1511 (New Technology--Level 11 ($901-$1,000) with a
payment rate of $950.50.
Since HCPCS code 0648T became effective in the OPPS in July 2021,
there has been only one claim from the CY 2021 claims data; but its
payment rate appears to be an outlier based on the service invoice we
received from the software developer. Accordingly, for CY 2023, we
propose to continue assigning CPT code 0648T to New Technology APC
1511. The proposed New Technology APC and status indicator assignment
for CPT code 0648T are found in Table 18.
[GRAPHIC] [TIFF OMITTED] TP26JY22.026
k. Minimally Invasive Glaucoma Surgery (MIGS) (APC 1526)
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 66991;
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.
For CY 2022, we finalized the assignment of CPT codes 66989 and
66991 to New Technology APC 1526 (New Technology--Level 26 ($4,001-
$4,500)). We stated that we believed that
[[Page 44562]]
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 explained that we did not
believe we had the necessary information on the costs associated with
CPT codes 66989 and 66991 to assign them to a clinical APC at that
time.
We note that for this proposed rule, the proposed payment rates are
based on claims data submitted between January 1, 2021, and December
31, 2021, and processed on or before December 31, 2021, and CCRs, if
available. Because CPT codes 66989 and 66991 were effective January 1,
2022, and we have no claims data for CY 2022, we propose to continue
assigning CPT codes 66989 and 66991 to New Technology APC 1526 for CY
2023. The proposed New Technology APC and status indicator assignments
for CPT codes 66989 and 66991 are found in Table 19.
[[Page 44563]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.027
[[Page 44564]]
l. Scalp Cooling (APC 1520)
CPT code 0662T (Scalp cooling, mechanical; initial measurement and
calibration of cap) became effective on July 1, 2021 to describe
initial measurement and calibration of a scalp cooling device for use
during chemotherapy administration to prevent hair loss. 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,
interested parties have indicated that there are substantial resource
costs of around $1,900 to $2,400 associated with calibration and
fitting of the cap. 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. For CY 2022, we assigned CPT code 0662T
to APC New Technology 1520 (New Technology--Level 20 ($1801-$1900))
with a payment rate of $1,850.50.
This service became effective in the OPPS in CY 2022. Therefore,
there are no claims for this service in the CY 2021 OPPS claims data.
Accordingly, for CY 2023, we propose to continue assigning CPT code
0662T to New Technology APC 1520. The proposed New Technology APC and
status indicator assignments for CPT code 0662T are found in Table 20.
[GRAPHIC] [TIFF OMITTED] TP26JY22.028
m. Optellem Lung Cancer Prediction (LCP) (APC 1508)
CPT code 0721T (Quantitative computed tomography (CT) tissue
characterization, including interpretation and report, obtained without
concurrent CT examination of any structure contained in previously
acquired diagnostic imaging) became effective July 1, 2022. The
Optellum LCP applies an algorithm to a patient's CT scan to produce a
raw risk score for a patient's pulmonary nodule. The risk score is used
by the physician to quantify the risk of lung cancer and to help
determine whether to refer the patient to a pulmonologist. For CY 2022,
we assigned CPT code 0721T to APC New Technology 1508 (New Technology--
Level 8 ($601-$700)).
This service became effective in the OPPS in CY 2022. Therefore,
there are no claims for this service in the CY 2021 OPPS claims data
for use in CY 2023 ratesetting. Accordingly, for CY 2023, we propose to
continue to assign CPT code 0721T to New Technology APC 1508 with a
status indication of ``S''. The proposed New Technology APC and status
indicator assignments for CPT code 0721T are found in Table 21.
[[Page 44565]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.029
n. Quantitative Magnetic Resonance Cholangiopancreatography (QMRCP)
(APC 1511)
CPT code 0723T (Quantitative magnetic resonance
cholangiopancreatography (QMRCP) including data preparation and
transmission, interpretation and report, obtained without diagnostic
magnetic resonance imaging (MRI) examination of the same anatomy (e.g.,
organ, gland, tissue, target structure) during the same session) became
effective July 1, 2022. The QMRCP is a Software as a medical Service
(SaaS) that performs quantitative assessment of the biliary tree and
gallbladder. It uses a proprietary algorithm that produces a three-
dimensional reconstruction of the biliary tree and pancreatic duct and
also provides precise quantitative information of biliary tree volume
and duct metrics. For CY 2022, we assigned CPT code 0723T to APC New
Technology 1511 (New Technology--Level 11($900-$1,000)).
This service became effective in the OPPS in CY 2022. Therefore,
there are no claims for this service in the CY 2021 OPPS claims data.
Accordingly, for CY 2023, we propose to continue to assign CPT code
0723T to New Technology APC 1511 with a status indicator of ``S''. The
proposed New Technology APC and status indicator assignments for CPT
code 0723T are found in Table 22.
[[Page 44566]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.030
o. CardiAMP (APC 1574)
The CardiAMP cell therapy IDE studies are two randomized, double-
blinded, controlled IDE studies: the CardiAMP Cell Therapy Chronic
Myocardial Ischemia Trial \6\ and the CardiAMP Cell Therapy Heart
Failure Trial.\7\ The two trials are designed to investigate the safety
and efficacy of autologous bone marrow mononuclear cells treatment for
the following: (1) patients with medically refractory and symptomatic
ischemic cardiomyopathy; and (2) patients with refractory angina
pectoris and chronic myocardial ischemia. On April 1, 2022, we
established HCPCS code C9782 to describe the CardiAMP cell therapy IDE
studies and assigned HCPCS code C9782 to APC 1574 (New Technology--
Level 37 ($9,501-$10,000)) with the status indicator ``T''. We
subsequently revised the descriptor for HCPCS code C9782 to: (Blinded
procedure for New York Heart Association (NYHA) Class II or III heart
failure, or Canadian Cardiovascular Society (CCS) Class III or IV
chronic refractory angina; transcatheter intramyocardial
transplantation of autologous bone marrow cells (e.g., mononuclear) or
placebo control, autologous bone marrow harvesting and preparation for
transplantation, left heart catheterization including ventriculography,
all laboratory services, and all imaging with or without guidance
(e.g., transthoracic echocardiography, ultrasound, fluoroscopy), all
device(s), performed in an approved Investigational Device Exemption
(IDE) study) to clarify the inclusion of the Helix transendocardial
injection catheter device in the descriptor. Additionally, we
determined that APC 1590 (New Technology--Level 39 ($15,001-$20,000))
most accurately accounts for the resources associated with furnishing
the procedure described by HCPCS code C9782. We note that a
transitional device pass-through application was submitted for the
Helix transendorcardial injection catheter device for CY 2023. We
direct readers to section IV.A of this proposed rule for a more
detailed discussion of the transitional device pass-through
applications.
---------------------------------------------------------------------------
\6\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial of
Autologous Bone Marrow Cells Using the CardiAMP Cell Therapy System
in Patients With Refractory Angina Pectoris and Chronic Myocardial
Ischemia.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT03455725?term=NCT03455725&rank=1.
\7\ ClinicalTrials.gov. ``Randomized Controlled Pivotal Trial of
Autologous Bone Marrow Mononuclear Cells Using the CardiAMP Cell
Therapy System in Patients With Post Myocardial Infarction Heart
Failure.'' Accessed May 10, 2022. https://clinicaltrials.gov/ct2/show/NCT02438306.
---------------------------------------------------------------------------
This service became effective in the OPPS in CY 2022. Therefore,
there are no claims for this service in the CY 2021 OPPS claims data
for use in CY 2023 ratesetting. Accordingly, for CY 2023, we propose to
assign HCPCS code C9782 to New Technology APC 1590 with a status
indication of ``T''. The proposed New Technology APC and status
indicator assignments for HCPCS code C9782 are found in Table 23.
BILLING CODE 4120-01-P
[[Page 44567]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.031
[[Page 44568]]
BILLING CODE 4120-01-C
D. Universal Low Volume APC Policy for Clinical and Brachytherapy APCs
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743
through 63747) we finalized our proposal to designate clinical and
brachytherapy APCs as low volume APCs if they have fewer than 100
single claims that can be used for ratesetting purposes in the claims
year used for ratesetting for the prospective year. For this proposed
rule, CY 2021 claims are generally the claims used for ratesetting and
clinical and brachytherapy APCs with fewer than 100 single claims from
CY 2021 that can be used for ratesetting would be low volume APCs
subject to our universal low volume APC policy. As we stated in the CY
2022 OPPS/ASC final rule with comment period, we adopted this policy to
reduce the volatility in the payment rate for those APCs with fewer
than 100 single claims. Where a clinical or brachytherapy APC has fewer
than 100 single claims that can be used for ratesetting, under our low
volume APC payment adjustment policy we determine the APC cost as the
greatest of the geometric mean cost, arithmetic mean cost, or median
cost based on up to 4 years of claims data. We excluded APC 5853
(Partial Hospitalization for CMHCs) and APC 5863 (Partial
Hospitalization for Hospital-based PHPs) from our universal low volume
APC policy given the different nature of policies that affect the
partial hospitalization program. We also excluded APC 2698 (Brachytx,
stranded, nos) and APC 2699 (Brachytx, non-stranded, nos) as our
current methodology for determining payment rates for non-specified
brachytherapy sources is appropriate.
Based on claims data available for this proposed rule, we propose
to designate four brachytherapy APCs and four clinical APCs as low
volume APCs under the OPPS. The four brachytherapy APCs and 4 clinical
APCs meet our criteria of having fewer than 100 single claims in the
claims year used for ratesetting (CY 2021 for this CY 2023 OPPS/ASC
proposed rule) and therefore, we propose that they would be subject to
our low volume APC policy. These eight APCs were designated as low
volume APCs in CY 2022; a ninth APC--APC 2647 (Brachytherapy, non-
stranded, Gold-198)--was designated as a low volume APC for CY 2022 but
did not meet our claims threshold for this proposed rule.
Table 24 includes the APC geometric mean cost without the low
volume APC designation, that is, if we calculated the geometric mean
cost based on CY 2021 claims data available for ratesetting; the
median, arithmetic mean, and geometric mean cost using up to four years
of claims data based on the APCs' designation as a low volume APC; and
the statistical methodology we propose to use to determine the APC's
cost for ratesetting purposes for CY 2023. As discussed in our CY 2022
OPPS/ASC final rule with comment period (86 FR 63751 through 63754),
given our concerns with CY 2020 claims data as a result of the PHE, the
4 years of claims data we proposed to use to calculate the costs for
these APCs are CYs 2017, 2018, 2019, and 2021.
[[Page 44569]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.032
BILLING CODE 4120-01-C
E. OPPS APC-Specific Policies
1. Fractional Flow Reserve Derived From Computed Tomography (FFRCT)
(APC 5724)
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
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
[[Page 44570]]
that we should pay separately for HeartFlow 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 were single frequency claims that were used to calculate the
geometric mean of the procedure. We planned to use the geometric mean
to determine the cost of HeartFlow for purposes of determining the
appropriate APC assignment for the procedure. However, the number of
single claims for CPT code 0503T was below the New Technology APC 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 used
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, which fell
within the cost band for New Technology APC 1511 (New Technology--Level
11 ($901-$1000)) with a payment rate of $950.50. The arithmetic mean
also 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 were well above the threshold of 100
claims for a procedure to be evaluated using the New Technology APC
low-volume policy. Therefore, we used our standard methodology rather
than the low-volume methodology we previously used to determine the
cost of CPT code 0503T. Our analysis found that the geometric mean for
CPT code 0503T was $804.35, and the geometric mean cost for the service
fell within the cost band for New Technology APC 1510 (New Technology--
Level 10 ($801-$900)). However, providers and other stakeholders 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 was one of the first procedures utilizing
artificial intelligence to be separately payable in the OPPS, and
providers were learning how to accurately report their charges to
Medicare when billing for artificial intelligence services (85 FR
85943). This especially appeared to be 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 continued to become 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-$1000)) 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 used claims data from CY 2019 to estimate the cost
of the HeartFlow service. Because we were using the same claims data as
in CY 2021, these data continued to reflect that providers were
learning how to accurately report their charges to Medicare when
billing for artificial intelligence services. Therefore, we continued
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 was the same payment rate for the service as in CY 2020
and CY 2021.
For CY 2023, we have three years of claims data from CY 2018, CY
2019, and CY 2021 for CPT code 0503T to review to determine whether
there is an appropriate clinical APC to assign the HeartFlow service.
First, we have sufficient single frequency claims from these three
years to have a reliable estimate of the cost of the service. There
were 101 single frequency claims in CY 2018, 465 single frequency
claims in CY 2019, and 1,681 single frequency claims in CY 2021. The
estimated cost of 0503T has been reasonably consistent over the same
three years as well. The estimated cost of HeartFlow was around $768 in
CY 2018, around $808 in CY 2019, and around $827 in CY 2021. Since the
cost data have been stable for HeartFlow, we can assign it to a
clinical APC using our regular process of using the most recent year of
claims data for a procedure. HeartFlow is a diagnostic service, and the
OPPS has a clinical APC series for diagnostic tests and related
services, with the cost of 0503T based on claims data falling between
Level 3, with a payment rate of around $498, and Level 4, with a
payment rate of around $961. Since the geometric mean cost of HCPCS
code 0503T is $827, and $827 is closer to $961 than $498, the best APC
assignment for the HeartFlow procedure appears to be APC 5724 (Level 4
Diagnostic Tests and Related Services).
Therefore, we propose for CY 2023 to assign CPT code 0503T to
clinical APC 5724 (Level 4 Diagnostic Tests and Related Services).
Table 25 shows the current and proposed status indicator and APC
assignment for 0503T. We refer readers to Addendum B of this proposed
rule for the payment rates for all codes reportable under the OPPS.
Addendum B is available via the internet on the CMS website.
[[Page 44571]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.033
2. Neurostimulator and Related Procedures (APCs 5461 Through 5465)
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66807
through 66808), we finalized a restructuring of what were previously
several neurostimulator procedure-related APCs into a four-level
series. Since CY 2015, the four-level APC structure for the series has
remained unchanged. In addition to that restructuring, in the CY 2015
OPPS/ASC final rule with comment period, we also made the Levels 2
through 4 APCs comprehensive APCs (79 FR 66807 through 66808). Later,
in the CY 2020 OPPS/ASC final rule with comment period, we also made
the Level 1 Neurostimulator and Related Procedure APC (APC 5461) a
comprehensive APC (84 FR 61162 through 61166).
In reviewing the claims data available for the CY 2021 OPPS/ASC
proposed rule, we believed that it was appropriate to create an
additional Neurostimulator and Related Procedures level, between what
were then the Levels 2 and 3 APCs. Creating this APC allowed for a
smoother distribution of the costs between the different levels based
on their resource costs and clinical characteristics. Therefore, for
the CY 2021 OPPS, we finalized a five-level APC structure for the
Neurostimulator and Related Procedures series (85 FR 85968 through
85970). In addition to creating the new level, we also assigned 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) to the new Level 3 APC (85 FR 85970).
Some commenters have requested that we create a Level 6
Neurostimulator and Related Procedures APC, due to their concerns
around clinical and resource cost similarity in the Level 5
Neurostimulator and Related Procedures APC. Based on our review of the
data available for this CY 2023 OPPS/ASC proposed rule, we believe that
the five-level structure for the Neurostimulator and Related Procedures
APC series remains appropriate. The proposed geometric mean cost for
the Level 5 Neurostimulator and Related Procedures is $30,198.36 with
the geometric means of cost significant codes in Level 5 ranging from
approximately $28,000 to $36,000, which is well within the range of the
2 times rule. In addition, a review of the clinical characteristics of
the services in the APC suggests that the current structure is
appropriate. Finally, as discussed in the CY 2021 OPPS/ASC final rule
with comment period, we reiterate that the OPPS is a prospective
payment system. We group procedures with similar clinical
characteristics and resource costs into APCs and establish a payment
rate that reflects the geometric mean of all services in the group even
though the cost of each service within the APC may be higher or lower
than the APC's geometric mean. As a result, in the OPPS any individual
procedure may potentially be overpaid or underpaid because the payment
rate is based on the geometric mean of the entire group of services in
the APC. However, the impact of these payment differences should be
mitigated when distributed across a large number of APCs. (85 FR
85968).
While we are not proposing any changes in the CY 2023 OPPS to the
5-level structure of the Neurostimulator and Related Procedures APC
series in this proposed rule, we recognize the commenters' concerns
regarding the granularity of the current APC levels and their request
to create an additional level to address such concerns. Accordingly, we
are soliciting comments on the potential creation of a new Level 6 APC
from the current Level 5 within the Neurostimulator and Related
Procedures APC series, which would include the following codes:
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)
0268T: Implantation or replacement of carotid sinus
baroreflex activation device; pulse generator only (includes intra-
operative interrogation, programming, and repositioning, when
performed)
0424T: Insertion or replacement of neurostimulator system
for treatment of central sleep apnea; complete system
[[Page 44572]]
(transvenous placement of right or left stimulation lead, sensing lead,
implantable pulse generator)
0431T: Removal and replacement of neurostimulator system
for treatment of central sleep apnea, pulse generator only
64568: Open implantation of cranial nerve (eg, vagus
nerve) neurostimulator electrode array and pulse generator
In summary, for the CY 2023, we propose to maintain the current 5-
level structure for the Neurostimulator and Related Procedure APC
series. However, we are also soliciting comment from stakeholders on
the creation of an additional Level 6 APC in the series from the
current Level 5 APC. See Table 26 below for the proposed CY 2023 for
the Neurostimulator and Related Procedures APCs.
[GRAPHIC] [TIFF OMITTED] TP26JY22.034
3. Urology and Related Services (APCs 5371 Through 5378)
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85984
through 85986), we finalized a reorganization of the Urology and
Related Services APCs from what was previously a seven-level series of
related APCs into an eight-level series. In addition to creating the
Urology and Related Services APC 5378 (Level 8 Urology and Related
Services), and finalizing the reassignment of several urology
procedures, we also revised the APC assignment for CPT 53440 (Male
sling procedure) and CPT 0548T (Transperineal periurethral balloon
continence device; bilateral placement, including cystoscopy and
fluoroscopy) from APC 5376 to APC 5377. We believed the CY 2021
reorganization appropriately addressed the resource costs for the
procedures whose geometric mean costs were between APC 5376 and APC
5377. Since CY 2021, the eight-level APC structure for the series has
remained unchanged.
In our annual review of the CY 2021 claims submitted between
January 1, 2021 through December 31, 2021 and processed on or before
December 31, 2021, we examined the procedures assigned to the Urology
Procedures APCs. In the CY 2022 final rule with comment period (86 FR
63565), we received comments requesting that CPT code 55880 be
reassigned from APC 5375 (Level 5 Urology and Related Services) to APC
5376 (Level 6 Urology and Related Services). We remind readers that,
for the CY 2022 ratesetting, we used the CY 2019 claims data due to the
PHE. For CY 2022, we did not finalize any APC reassignment because our
data analysis using the CY 2019 claims did not support the impact on
the urology APCs' geometric means. For the CY 2023 ratesetting, we
propose to use CY 2021 claims data. Using the CY 2021 claims data, we
identified eight procedures (listed below) from APC 5375 whose
geometric mean ranged between the geometric means for APC 5375 and APC
5376. The geometric means of these services are closer to the geometric
mean of APC 5376, which is $8,788.53, than the geometric mean of APC
5375, which is $4,826.23. This reassignment to APC 5476 improves the
resource cost and clinical homogeneity for the procedures within APC
5375 and APC 5376. Below is a list of the procedures and their
geometric mean costs that we propose to reassign from APC 5375 to APC
5376 for CY 2023.
CPT 50576: Renal endoscopy through nephrotomy or
pyelotomy, with or without irrigation, instillation, or
ureteropyelography, exclusive of radiologic service; with fulguration
and/or incision, with or without biopsy (Geometric mean cost:
$11,137.98)
HCPCS C9769: Cystourethroscopy, with insertion of
temporary prostatic implant/stent with fixation/anchor and incisional
struts (Geometric mean cost: $7,742.45)
CPT 51860: Cystorrhaphy, suture of bladder wound, injury
or rupture; simple (Geometric mean cost: $7,548.83)
CPT 0549T: Transperineal periurethral balloon continence
device; unilateral placement, including cystoscopy and fluoroscopy
(Geometric mean cost: $7,337.54)
CPT 53449: Repair of inflatable urethral/bladder neck
sphincter, including pump, reservoir, and cuff (Geometric mean cost:
$7,109.79)
CPT 54344: Repair of hypospadias complication(s) (ie,
fistula, stricture, diverticula); requiring mobilization of skin flaps
and urethroplasty with flap or
[[Page 44573]]
patch graft (Geometric mean cost: $7,005.64)
CPT 54316: Urethroplasty for second stage hypospadias
repair (including urinary diversion) with free skin graft obtained from
site other than genitalia (Geometric mean cost: $7,069.06)
CPT 55880: Ablation of malignant prostate tissue,
transrectal, with high intensity-focused ultrasound (hifu), including
ultrasound guidance (Geometric mean cost: $7,015.62)
In summary, for the CY 2023, we propose to reassign eight
procedures from APC 5375 to APC 5376 for the Urology and Related
Procedure APC series. Table 27 below shows the proposed geometric mean
cost for each APC with reassignment of the eight procedures.
[GRAPHIC] [TIFF OMITTED] TP26JY22.035
4. Unlisted Dental Procedure/Service (APC 5871)
For CY 2022, CPT code 41899 (Unlisted procedure, dentoalveolar
structures) is assigned to APC 5161 (Level 1 ENT Procedures). Unlisted
codes, like CPT 41899, do not describe any specific procedure or
service, so they lack the specificity needed to describe the resources
used. As a reminder, the fact that a drug, device, procedure, or
service is assigned a HCPCS code and a payment rate under the OPPS does
not imply coverage by the Medicare program, but indicates only how the
product, procedure, or service may be paid if covered by the program.
Medicare Administrative Contractors (MACs) determine whether a drug,
device, procedure, or other service meets all program requirements for
coverage. For example, MACs determine that the drug, device, procedure,
or service is reasonable and necessary to treat the beneficiary's
condition and whether it is excluded from payment. Unlisted codes
provide a way for providers to report services for which there is no
HCPCS code that specifically describes the service furnished. Because
of the lack of specificity, unlisted codes are generally assigned to
the lowest level APC within the most appropriate clinically related APC
group under the OPPS. However, we believe that APC 5161 (Level 1 ENT
Procedures) is not the most clinically appropriate APC series for this
code. While APC 5161 includes some dental services, we believe that CPT
code 41899 is more closely aligned clinically to the dental services in
APC 5871 (Dental Procedures), which is the sole APC where dental
procedures described by the Current Dental Terminology (CDT) reside.
Therefore, for CY 2023, we propose to reassign HCPCS code 41899 to
clinical APC 5871, which is the only, and therefore lowest, APC group
that specifically describes dental procedures.
While we do not consider costs for services described by unlisted
codes for rate setting purposes, based on both our established policy
of generally assigning these codes to the lowest level APC within the
most appropriate, clinically related APC group, and our inability to
determine the specific services the unlisted code describes, we would
note that the geometric mean cost for CPT code 41899 is more closely
aligned with the geometric mean cost of other dental procedures in APC
5871 than with its current APC assignment. Specifically, in our annual
review of the CY 2021 claims submitted between January 1, 2021 through
December 31, 2021 and processed on or before December 31, 2021, the
geometric mean cost for CPT code 41899 was $2,310.47, while the
geometric mean cost of the code's current APC assignment, APC 5161, was
$203.64. In contrast, the geometric mean cost of APC 5871 (Dental
Procedures) was $1,958.92.
Table 28 below shows the current and proposed status indicator and
APC assignment for CPT code 41899. We refer readers to Addendum B of
this proposed rule for the payment rates for all codes reportable under
the OPPS. Addendum B is available via the internet on the CMS website.
[[Page 44574]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.036
5. COVID-19 and Monoclonal Antibody Administration Services
a. Statutory and Regulatory Background
Section 3713 of the Coronavirus Aid, Relief, and Economic Security
Act (CARES Act) (Pub. L 116-136, March 27, 2020) provides for coverage
of the COVID-19 vaccine under Part B of the Medicare program without
any beneficiary cost sharing. Specifically, section 3713 added the
COVID-19 vaccine and its administration to section 1861(s)(10)(A) of
the Act in the same subparagraph as the influenza and pneumococcal
vaccines and their administration. Additionally, section 3713(e) of the
CARES Act authorizes CMS to implement the amendments made by section
3713 ``through program instruction or otherwise.'' The changes to
section 1861(s)(10)(A) of the Act were effective on the date of
enactment, that is, March 27, 2020, and apply to a COVID-19 vaccine
beginning on the date that such vaccine is licensed under section 351
of the PHS Act (42 U.S.C. 262).
We discussed our implementation of section 3713 in the interim
final rule with comment period titled, ``Additional Policy and
Regulatory Revisions in Response to the COVID-19 Public Health
Emergency,'' published in the November 6, 2020 Federal Register (85 FR
71145 through 71150). In that rule, we stated that, while section
3713(e) of the CARES Act authorizes us to implement the amendments made
by that section through program instruction or otherwise, we believed
it was important to clarify our interpretation of section 3713 and
announce our plans to ensure timely Medicare Part B coverage and
payment for the COVID-19 vaccine and its administration. We anticipated
that payment rates for the administration of other Part B preventive
vaccines and related services, such as the flu and pneumococcal
vaccines, would inform the payment rates for administration of COVID-19
vaccines. In the same interim final rule, we stated that, as soon as
practicable after the authorization or licensure of each COVID-19
vaccine product by FDA, we would announce the interim coding and a
payment rate for its administration (or, in the case of the OPPS, an
APC assignment for each vaccine product's administration code), taking
into consideration any product-specific costs or considerations
involved in furnishing the service. We further stated that the codes
and payment rates would be announced through technical direction to the
Medicare Administrative Contractors (MACs) and posted publicly on the
CMS website.
In December 2020, we publicly posted the applicable CPT codes for
the Pfizer-BioNTech and Moderna COVID-19 vaccines and initial Medicare
payment rates for administration of these vaccines upon FDA's
authorization of them. We announced an initial Medicare payment rate
for COVID-19 vaccine administration of $28.39 to administer single-dose
vaccines. For a COVID-19 vaccine requiring a series of two or more
doses--for example, for both the Pfizer-BioNTech and Moderna products--
we announced a payment rate for administration of the initial dose(s)
of $16.94, which was based on the Medicare payment rate for
administering the other preventive vaccines under section 1861(s)(10)
of the Act. We also announced a payment rate for administering the
second dose of $28.39.\8\ CMS continues to establish product-specific
HCPCS codes for each COVID-19 vaccine product on a rolling basis as
they are authorized by the FDA. On March 15, 2021, we announced an
increase in the payment rate for administering a COVID-19 vaccine to
$40 per dose, effective for doses administered on or after March 15,
2021. For additional information, on timing and payment rates for
COVID-19 vaccine administration, please see the CMS website: https://www.cms.gov/medicare/preventive-services/covid-19-services-billing-coverage/covid-19/medicare-covid-19-vaccine-shot-payment.
---------------------------------------------------------------------------
\8\ Medicare COVID-19 Vaccine Shot Payment. CMS website. https:/
/www.cms.gov/medicare/preventive-services/covid-19-services-billing-
coverage/covid-19/medicare-covid-19-vaccine-shot-
payment#:~:text=%2416.94%20for%20the%20initial%20dose,final%20dose%20
in%20the%20series.
---------------------------------------------------------------------------
b. Payment for COVID-19 Vaccine Administration Services Under the OPPS
Under the OPPS, separate payment is made for the COVID-19 vaccine
product and its administration. Except when the provider receives the
COVID-19 vaccine for free (as has been the case to date), providers are
paid for COVID-19 vaccine products at reasonable cost, as is the case
with influenza and pneumococcal vaccines.\9\ The HCPCS codes associated
with the vaccine products are assigned OPPS status indicator ``L'' to
indicate that they are paid at reasonable cost and are exempt from
coinsurance and deductible payments under sections 1833(a)(3) and
1833(b) of the Act.
---------------------------------------------------------------------------
\9\ COVID-19 Vaccines and Monoclonal Antibodies. CMS website.
https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies.
---------------------------------------------------------------------------
While COVID-19 and other preventive vaccine products are paid based
on reasonable cost under the OPPS, the payment rates for the COVID-19
vaccine administration HCPCS codes are based on the APCs to which the
codes are assigned. Because COVID-19 vaccination can involve more than
one dose, we established APCs 9397 (COVID-19 Vaccine Admin Dose 1 of 2)
and 9398 (COVID-19 Vaccine Admin
[[Page 44575]]
Dose 2 of 2, Single Dose Product or Additional Dose) to appropriately
identify and pay for the administration of the COVID-19 vaccines. In CY
2021, we announced the establishment of APCs 9397 and 9398 for the
COVID-19 vaccine administration codes through the April 2021 OPPS
Update CR (Transmittal 10666, Change Request 12175 dated March 8,
2021). Prior to March 15, 2021, APC 9397 for the first dose of the
COVID-19 vaccine was assigned a payment rate of $16.94; and APC 9398
for the second dose was assigned a payment rate of $28.39. As described
above, we changed the payment rate to $40 per dose for the first,
second, and booster dose(s) of the COVID-19 vaccine effective March 15,
2021.
For CYs 2021 and 2022, we maintained the payment rate of $40 for
the APCs to which the COVID-19 vaccine administration services are
assigned. For further information please see Addendum B on the CY 2021
and 2022 OPPS websites.
As of July 1, 2022, there are approximately 18 COVID-19 vaccine
administration HCPCS codes. These codes are listed in Table 29 below.
We note that the latest list of HCPCS codes for COVID-19 vaccine
products and vaccine administration, along with their effective dates
and payment rates, is available on the CMS COVID-19 Vaccines and
Monoclonal Antibodies website at https://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies.
Based on our review of CY 2021 claims data associated with the
COVID-19 vaccine administration HCPCS codes, the geometric mean cost
for APC 9397 is $25.86 and the geometric mean cost for APC 9398 is
$36.80. We note that CY 2021 utilization of the COVID-19 vaccine
administration codes in the outpatient hospital setting was very high,
with nearly 7 million claims for these codes in that year and may not
be reflective of future year utilization. Since we do not know if
demand for COVID-19 vaccine administration in the outpatient hospital
setting will be significantly different in CY 2023 than CY 2021 because
CY 2021 was the first complete year for which we had COVID-19 vaccine
administration claims data, and because we do not know if the PHE for
COVID-19 will be in effect in CY 2023, we believe that we should
maintain the $40 per dose payment rate for the COVID-19 administration
HCPCS codes in CY 2023 until we have an additional year of claims data
on which to base the payment rate. Therefore, for CY 2023 we propose to
use the equitable adjustment authority at 1833(t)(2)(E) to maintain the
payment rate of $40 for each of the COVID-19 vaccine administration
APCs 9397 and 9398. We believe maintaining the current, site neutral,
payment rate is necessary to ensure equitable payments during the
continuing PHE and at least through the end of CY 2023. We refer
readers to Table 29 below for the proposed payment rates for the COVID-
19 vaccine administration HCPCS codes.
We also note that this policy does not pertain to OPPS payment for
monoclonal antibody products used for COVID-19 and their
administration. The OPPS payment rates for administration of COVID-19
monoclonal antibody products under the Part B preventive vaccine
benefit are set at the midpoint of the cost bands for the New
Technology APCs to which the monoclonal antibody administration
services are assigned under the OPPS. We assigned COVID-19 monoclonal
antibody administration services to New Technology APCs based on
estimated costs for these services.
c. Use of Alternative Site-Neutral Methodology To Update Payment Rates
for COVID-19 Vaccine Administration Services for CY 2023
Under current policy, the payment rates for COVID-19 vaccine
administration services are site-neutral across most outpatient and
ambulatory settings. We request comment on whether we should continue a
site-neutral payment policy for COVID-19 vaccine administration for CY
2023, and what alternative approaches (including under our equitable
adjustment authority at 1833(t)(2)(E)) may be appropriate to update the
OPPS payment rates for the COVID-19 vaccine administration HCPCS codes
(including the in-home add-on HCPCS code M0201) while continuing to
ensure site-neutral payment for these services. For example, in the CY
2023 PFS proposed rule that will be included in the July 29, 2022
Federal Register, we are proposing to update the payment rate for the
administration of preventive vaccines (other than for COVID-19 and
other than for services paid under other payment systems such as the
OPPS) using the annual increase to the Medicare Economic Index (MEI).
We request public comments on whether, as an alternative to our
proposal to maintain current OPPS payment rates for COVID-19 vaccine
administration using our equitable adjustment authority at section
1833(t)(2)(E), we should instead use the rate finalized through PFS
rulemaking that generally applies under the preventive vaccine benefit,
or an alternative method commenters suggest, to determine the
appropriate payment rates for preventive vaccine administration under
the OPPS, which would likely also require use of our equitable
adjustment authority.
For more information on the payment rates for the administration of
preventive vaccines, including the proposal to update the payment rate
by the annual increase to the MEI, we refer readers to the CY 2023 PFS
proposed rule that will be included in the July 29, 2022 Federal
Register.
We are also seeking comment on whether to use the rate finalized
through PFS rulemaking generally as it applies under the preventive
vaccine benefit, or an alternative method commenters suggest, to set
the CY 2023 payment rate for HCPCS code M0201 (COVID-19 vaccine
administration inside a patient's home; reported only once per
individual home per date of service when only COVID-19 vaccine
administration is performed at the patient's home).
In summary, for CY 2023, we are proposing to continue to pay $40
per dose for the administration of the COVID-19 vaccines provided in
the HOPD setting, and an additional $35.50 for the administration of
the COVID-19 vaccines when provided under certain circumstances in the
patient's home, in CY 2023. Additionally, we request comments on
whether, as an alternative to maintaining the CY 2022 OPPS payment
rates for COVID-19 vaccine administration services in CY 2023, we
should use a different approach, including relying on our equitable
adjustment authority in section 1833(t)(2)(E) to base the payment rate
for COVID-19 vaccine administration under the OPPS in CY 2023 on the
payment rate for the COVID-19 vaccine administration under the
preventive vaccine benefit under Part B as finalized in PFS rulemaking,
or employing another alternate methodology to set CY 2023 payment rates
for these services.
BILLING CODE 4120-01-P
[[Page 44576]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.037
[[Page 44577]]
BILLING CODE 4120-01-C
d. Comment Solicitation on the Appropriate Payment Methodology for
Administration of Preventive Vaccines Post PHE
Currently, under the OPPS, the codes describing the administration
of the influenza, pneumococcal, and hepatitis b vaccines are assigned
to APC 5691 (Level 1 Drug Administration), with a payment rate of about
$40. However, given that the statutory benefit for Medicare Part B
preventive vaccines and their administration is based on 1861(s)(10) of
the Act, we are seeking comments on whether we should adopt a different
methodology to make payment when these services are furnished by a HOPD
other than the one for covered OPD services under section 1833(t) of
the Act. Therefore, in this proposed rule, we are seeking comments on
the appropriate payment methodology for the administration of Part B
preventive vaccines, including the COVID-19 vaccine post PHE.
e. COVID-19 Monoclonal Antibody Products and Their Administration
Services Under OPPS
Subsequent to the November 6, 2020 IFC and as discussed in the CY
2022 PFS final rule (86 FR 65190 through 65194), when monoclonal
antibody products for COVID-19 treatment were granted EUAs during the
PHE for COVID-19, we made the determination to cover and pay for them
under the Part B vaccine benefit in section 1861(s)(10) of the Act
Regarding availability of COVID-19 monoclonal antibody products,
there are no monoclonal antibody products approved for the treatment or
prevention of COVID-19. There are five authorized monoclonal antibody
COVID-19 products; four are authorized for the treatment or post-
exposure prophylaxis for prevention of COVID-19 and one is authorized
as pre-exposure prophylaxis for prevention of COVID-19.\10\ We note
that none of the four monoclonal antibody products for treatment or
post-exposure prevention of COVID-19 that have been granted an EUA are
authorized for use in geographic regions where infection was likely
caused by a non-susceptible variant. Due to data indicating decreased
activity for three of these treatments against Omicron variants
currently in wide circulation, only one of these treatments is
currently authorized in any U.S. region until further notice by FDA.
---------------------------------------------------------------------------
\10\ Viewed 5/6/2022. https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization.
---------------------------------------------------------------------------
Consistent with how we pay for COVID-19 vaccine products and their
administration, under the OPPS, we pay separately for COVID-19
monoclonal antibodies and their administration. Except when the
provider receives the COVID-19 monoclonal antibody product for free,
providers are paid for these products at reasonable cost.\11\ The HCPCS
codes associated with the COVID-19 monoclonal antibody products are
assigned OPPS status indicator ``L'' to indicate that they are paid at
reasonable cost and are exempt from coinsurance and deductible payments
under sections 1833(a)(3) and 1833(b) of the Act.
---------------------------------------------------------------------------
\11\ COVID-19 Vaccines and Monoclonal Antibodies. CMS Website
http://www.cms.gov/medicare/medicare-part-b-drug-average-sales-price/covid-19-vaccines-and-monoclonal-antibodies.
---------------------------------------------------------------------------
While the COVID-19 monoclonal antibody products are paid based on
reasonable cost under the OPPS, the payment rates for the COVID-19
monoclonal antibody product administration depends on the route of
administration and whether the product is furnished in a healthcare
setting or in the beneficiary's home. As discussed in more detail in
the CMS COVID-19 Monoclonal Toolkit,\12\ payment for administration of
monoclonal antibodies can range from $150.50 to $750.00. The HCPCS
codes associated with the COVID-19 monoclonal antibody product
administration are assigned to New Technology APCs 1503, 1504, 1505,
1506, 1507, and 1509 with an OPPS status indicator ``S'' (Procedure or
Service, Not Discounted When Multiple, separate APC assignment) to
indicate that the administration of monoclonal antibodies is paid
separately under the OPPS.
---------------------------------------------------------------------------
\12\ https://www.cms.gov/monoclonal.
---------------------------------------------------------------------------
For CYs 2021 and 2022, we maintained the payment rates for the
COVID-19 monoclonal antibody product administration services by
maintaining their New Technology APCs assignments. For further
information, please see Addendum B on the CY 2021 and 2022 OPPS
websites. For CY 2023, we propose to use the equitable adjustment
authority at 1833(t)(2)(E) to maintain the CY 2022 New Technology APC
assignments (specifically, New Technology APCs 1503, 1504, 1505, 1506,
1507, or 1509) and corresponding payment rates for each of the COVID-19
monoclonal antibody product administration HCPCS codes for as long as
these products are considered to be covered and paid under the Medicare
Part B vaccine benefit so that, if the PHE ends, the benefit category
and corresponding payment methodology under the OPPS will remain site
neutral.
We note that, once these products are no longer considered to be
covered and paid under the Medicare Part B vaccine benefit, we would
expect the COVID-19 monoclonal antibody product administration services
to be paid similar to monoclonal antibody products used in the
treatment of other health conditions--to be ``biologicals''. For more
background on Medicare Part B payment for COVID-19 monoclonal antibody
products and their administration, and for current proposals regarding
such payment, we refer readers to the CY 2023 PFS proposed rule that
will be included in the July 29, 2022 Federal Register. In particular,
the CY 2023 PFS proposed rule proposes to clarify that the COVID-19
monoclonal antibody products would be covered and paid for under the
Medicare Part B vaccine benefit until the end of the calendar year in
which the March 27, 2020 EUA declaration for drugs and biologics is
terminated. Additionally, we are proposing to continue the existing
policy to pay for monoclonal antibody COVID-19 pre-exposure prophylaxis
products and their administration under the Part B vaccine benefit even
after the EUA declaration for drugs and biological products is
terminated, so long as after the EUA declaration is terminated, such
products have market authorization.
IV. Proposed OPPS Payment for Devices
A. Proposed Pass-Through Payment for Devices
1. Beginning Eligibility Date for Device Pass-Through Status and
Quarterly Expiration of Device Pass-Through Payments
a. Background
The intent of transitional device pass-through payment, as
implemented at Sec. 419.66, is to facilitate access for beneficiaries
to the advantages of new and truly innovative devices by allowing for
adequate payment for these new devices while the necessary cost data is
collected to incorporate the costs for these devices into the procedure
APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act,
the period for which a device category eligible for transitional pass-
through payments under the OPPS can be in effect is at least 2 years
but not more than 3 years. Prior to CY 2017, our regulation at Sec.
419.66(g) provided that this pass-
[[Page 44578]]
through payment eligibility period began on the date CMS established a
particular transitional pass-through category of devices, and we based
the pass-through status expiration date for a device category on the
date on which pass-through payment was effective for the category. In
the CY 2017 OPPS/ASC final rule with comment period (81 FR 79654), in
accordance with section 1833(t)(6)(B)(iii)(II) of the Act, we amended
Sec. 419.66(g) to provide that the pass-through eligibility period for
a device category begins on the first date on which pass-through
payment is made under the OPPS for any medical device described by such
category.
In addition, prior to CY 2017, our policy was to propose and
finalize the dates for expiration of pass-through status for device
categories as part of the OPPS annual update. This means that device
pass-through status would expire at the end of a calendar year when at
least 2 years of pass-through payments had been made, regardless of the
quarter in which the device was approved. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79655), we changed our policy to allow
for quarterly expiration of pass-through payment status for devices,
beginning with pass-through devices approved in CY 2017 and subsequent
calendar years, to afford a pass-through payment period that is as
close to a full 3 years as possible for all pass-through payment
devices. We also have an established policy to package the costs of the
devices that are no longer eligible for pass-through payments into the
costs of the procedures with which the devices are reported in the
claims data used to set the payment rates (67 FR 66763).
We refer readers to the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79648 through 79661) for a full discussion of the current
device pass-through payment policy.\13\
---------------------------------------------------------------------------
\13\ To apply for OPPS transitional device pass-through status,
applicants complete an application that is subject to the Paperwork
Reduction Act (PRA). This collection (CMS-10052) has an OMB control
number of 0938-0857 and an expiration date of 11/30/2022. The
application is currently undergoing the PRA reapproval process,
which has notice and comment periods separate from this proposed
rule. The 60-day notice was published in the Federal Register on
April 29, 2022 (87 FR 25488).
---------------------------------------------------------------------------
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 30 where we
detail the expiration dates of pass-through payment status for each of
the 11 devices currently receiving device pass-through payment.
In the CY 2022 OPPS/ASC final rule with comment period we used CY
2019 claims data, rather than CY 2020 claims data, to inform CY 2022
ratesetting (86 FR 63755). As a result, we utilized our equitable
adjustment authority at section 1833(t)(2)(E) of the Act to provide up
to four quarters of separate payment for 27 drugs and biologicals and
one device category whose pass-through payment status expired between
December 31, 2021 and September 30, 2022 to mimic continued pass-
through payment, promote adequate access to innovative therapies for
Medicare beneficiaries, and gather sufficient data for purposes of
assigning these devices to clinical APCs (86 FR 63755). A full
discussion of this finalized policy is included in section X.F of the
CY 2022 OPPS/ASC final rule with comment (86 FR 63755). In section X.B
of this proposed rule, we propose to resume the regular update process
of using claims from the year 2 years prior to the year for which we
are setting rates, specifically CY 2021 outpatient claims for CY 2023
OPPS ratesetting. Based on CMS's policy proposal in section X.B we are
not proposing to provide any additional quarters of separate payments
for any device category whose pass-through payment status will expire
between December 31, 2022 and September 30, 2023. We seek comment on
how the circumstances for CY 2023 are similar to those in CY 2022, when
we adopted the equitable adjustment to mimic continued pass-through
status for drugs, biologicals, and a device category with pass-through
status that expired between December 31, 2021, and September 30, 2023.
We utilized our equitable adjustment authority at section
1833(t)(2)(E) of the Act to provide separate payment for C1823 for four
quarters in CY 2022 for C1823, as its pass-through payment status
expired on December 31, 2021 (86 FR 63570). Separate payment for HCPCS
code C1823 under our equitable adjustment authority will end on
December 31, 2022. Table 30 includes this date for the device described
by HCPCS code C1823 and includes the specific expiration dates for
devices with pass-through status expiring at the end of the fourth
quarter of 2022, in 2023, or in 2024.
BILLING CODE 4120-01-P
[[Page 44579]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.038
BILLING CODE 4120-01-C
2. New Device Pass-Through Applications for CY 2023
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).
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 authorization is granted, in which
case CMS will consider the pass-through
[[Page 44580]]
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, or, for devices for which pass-
through payment status will begin on or after January 1, 2020, as an
alternative pathway to demonstrating substantial clinical improvement,
a device is part of the FDA's Breakthrough Devices Program and has
received marketing authorization for the indication covered by the
Breakthrough Device designation.
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 for the indication covered by the Breakthrough
Devices designation, and meet the other criteria in the regulation can
be approved through the quarterly process and announced through that
process (81 FR 79655). Proposals regarding these devices and whether
pass-through payment status should continue to apply are included in
the next applicable OPPS rulemaking cycle. This process promotes timely
pass-through payment status for innovative devices, while also
recognizing that such devices may not have a sufficient evidence base
to demonstrate substantial clinical improvement at the time of FDA
marketing authorization.
More details on the requirements for device pass-through payment
applications are included on the CMS website in the application form
itself at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.html, in the
``Downloads'' section. In addition, CMS is amenable to meeting with
applicants or potential applicants to discuss research trial design in
advance of any device pass-through application or to discuss
application criteria, including the substantial clinical improvement
criterion.
b. Applications Received for Device Pass-Through Status for CY 2023
We received nine complete applications by the March 1, 2022
quarterly deadline, which was the last quarterly deadline for
applications to be received in time to be included in the CY 2023 OPPS/
ASC proposed rule. We received one of the applications in the second
quarter of 2021, one of the applications in the third quarter of 2021,
two of the applications in the fourth quarter of 2021, and five of the
applications in the first quarter of 2022. One of the applications was
approved for device pass-through status during the quarterly review
process: the aprevo\TM\ Intervertebral Body Fusion, which received
quarterly approval under the alternative pathway effective October 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, aprevo\TM\
Intervertebral Body Fusion is discussed in section IV.2.b.1 of this
proposed rule.
Applications received for the later deadlines for the remaining
2022
[[Page 44581]]
quarters (the quarters beginning June 1, September 1, and December 1 of
2022), if any, will be discussed in the CY 2024 OPPS/ASC proposed rule.
We note that the quarterly application process and requirements have
not changed because 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, 2022
deadline are included below.
1. Alternative Pathway Device Pass-Through Applications
We received two device pass-through applications by the March 2022
quarterly application deadline for devices that have received
Breakthrough Device designation from FDA and FDA marketing
authorization for the indication for which they have a Breakthrough
Device designation, and therefore are eligible to apply under the
alternative pathway.
(1) Aprevo\TM\ Intervertebral Body Fusion Device
Carlsmed, Inc. submitted an application for a new device category
for transitional pass-through payment status for aprevo\TM\
Intervertebral Fusion Device (aprevo\TM\) for CY 2023. Per the
applicant, the device is an interbody fusion implant that stabilizes
the lumbar spinal column and facilitates fusion during lumbar fusion
procedures indicated for the treatment of spinal deformity. The
applicant stated that the implant device is custom made for patient-
specific features using patient computed tomography (CT) scans to
create 3D virtual models of the deformity to be used during anterior
lumbar interbody fusion, lateral lumbar interbody fusion, and
transforaminal lumbar interbody fusion procedures. The aprevo\TM\
device is additively manufactured and made from Titanium Alloy (Ti-6Al-
4V) per ASTM F3001, and has a cavity intended for the packing of bone
graft. In addition, the applicant explained that aprevo\TM\ is used
with supplemental fixation devices and bone graft packing. Per the
applicant, the device was formerly known as ``Corra\TM\.''
According to the applicant, the surgical correction plan for adult
patients with spinal deformity is significantly more complex than
performing a spine fusion for a degenerative spinal condition. The
applicant further described that these deformity correction plans
require numerous complex measurements and calculations that consider a
multitude of relationships between each area of the spine (cervical,
thoracic, lumbar), the 33 individual levels of the spine, the pelvis,
hips, and other reference points in relation to normal values based on
the patient's age. The applicant stated that achieving the proper
balance between these factors has been shown to directly contribute to
improved clinical outcomes and increased patient satisfaction. Despite
the use of sophisticated planning tools, surgeons are frequently unable
to obtain the planned correction, and this is often because stock
devices, which are not patient-specific, do not match the specific
geometry that is required to realign each level of the individual
patient's spine. The applicant claims that aprevo\TM\ devices provide
the precise geometry to match the planned surgical correction for a
spinal deformity patient, and they maintain this precise position while
the bones fuse together in their new alignment.
According to the applicant, aprevo\TM\ devices are surgically
placed between two vertebral levels of the spine. The approach may be
from the front, side, or back of the patient. The surgeon will gently
clear away the disc material (which is often degenerated) before
placing the device. Bone graft is placed inside a central opening of
the interbody device. This allows the patient's bone to integrate with
the graft material and form a bony bridge.
The applicant asserted that there are no other devices in the
market like aprevo\TM\. Per the applicant, other stock devices do not
match the anatomy of each patient precisely. The applicant stated, in
contrast, aprevo\TM\ utilizes 3D generated reconstructions of each
level of the patient's lumbar spine that match the anatomy of the
patient. Per the applicant, the device's upper and lower surfaces match
the topography of the patient's bone as this is important because the
surfaces of the vertebral endplates can be extremely bumpy or wavy and
sometimes thin and fragile. Per the applicant, by having a fit that
matches these contours, the high loads that result from body weight are
more evenly distributed across the surface. The applicant stated that
this contributes to faster healing of the bone and lessens the risk of
having high stress points that could result in a stock interbody device
breaking through the thin endplate.
Aprevo\TM\ is indicated for use as an adjunct to fusion at one or
more levels of the lumbar spine in patients having an ODI >40 and
diagnosed with severe symptomatic adult spinal deformity (ASD)
conditions. These patients should have had 6 months of non-operative
treatment. The devices are intended to be used with autograft and/or
allogenic bone graft comprised of cancellous and/or cortico-cancellous
bone graft. These implants may be implanted via a variety of open or
minimally invasive approaches. These approaches may include anterior
lumbar interbody fusion or lateral lumbar interbody fusion.
With respect to the newness criterion at Sec. 419.66(b)(1),
aprevo\TM\ received FDA Breakthrough Device designation under the name
``Corra'' on July 1, 2020 for the Corra Anterior, Corra Transforaminal,
and Corra Lateral Lumbar Fusion System interbody device which is
intended for use in anterior lumbar interbody fusion, lateral lumbar
interbody fusion, and transforaminal lumbar interbody fusion under this
designation. The applicant received 510(k) clearance from FDA for the
Intervertebral Body Fusion Device (anterior lumbar interbody fusion and
aprevo\TM\ lateral lumbar interbody fusion devices) on December 3,
2020. The applicant also received 510(k) clearance from FDA for the
Transforaminal Intervertebral Body Fusion (IBF) device on June 30,
2021. We received the application for a new device category for
transitional pass-through payment status for aprevo\TM\ on May 27,
2021, which is within 3 years of the date of the initial FDA marketing
authorization of both indications. We are inviting public comment on
whether aprevo\TM\ meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, aprevo\TM\ 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 aprevo\TM\ meets the device
eligibility requirements of Sec. 419.66(b)(4) because it is not an
instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered, and it is not a supply or material
furnished incident to a service. We are inviting public comments on
whether aprevo\TM\ meets the eligibility criteria at Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as
[[Page 44582]]
an outpatient service as of December 31, 1996. The applicant describes
aprevo \TM\ as an interbody fusion implant that stabilizes the lumbar
spinal column and facilitates fusion during lumbar fusion procedures
indicated for the treatment of spinal deformity. Per the applicant, no
previous device categories for pass-through payment have encompassed
the device. In addition, per the applicant, the possible existing pass-
through codes: C1821 (Interspinous process distraction device
(implantable)), C1776 (Joint device (implantable)), C1734 (Orthopedic/
device/drug matrix for opposing bone-to-bone or soft tissue-to-bone),
and C1062 (Intravertebral body fracture augmentation with implant
(e.g., metal, polymer)) do not appropriately describe aprevo\TM\
because none of the existing codes pertain to a patient-specific spinal
interbody fusion device and, therefore, do not encompass aprevo\TM\.
We have not identified an existing pass-through payment category
that describes aprevo\TM\. We are inviting public comment on whether
aprevo \TM\ meets the device category criterion.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
That a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization. for the indication covered by the
Breakthrough Device designation. 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 for the indication covered by the Breakthrough Device
designation in the CY 2020 OPPS/ASC final rule with comment period (84
FR 61295). Aprevo \TM\ has a Breakthrough Device designation and
marketing authorization from FDA for the indication covered by the
Breakthrough Device designation (as explained in more detail in the
discussion of the newness criterion) and therefore is not evaluated for
substantial clinical improvement. We note that the applicant was
granted new technology add-on payments under the Alternative Pathway
for Breakthrough Devices in the FY 2022 IPPS/LTCH PPS final rule (86 FR
45132 through 45133).
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 aprevo\TM\ would
be reported with HCPCS codes in the following table.
[GRAPHIC] [TIFF OMITTED] TP26JY22.121
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. As we explained in the CY 2005 OPPS final rule with comment
period (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. For our
calculations, we used APC 5115, which had a CY 2021 payment rate of
$12,314.76 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 22633 had a device
offset amount of $6,851.93 at the time the application was received.
According to the applicant, the cost of aprevo\TM\ is $26,000.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $26,000 for aprevo\TM\ is 211.13 percent of
the applicable APC payment amount for the service related to the
category of devices of $12,314.76 (($26,000/$12,314.76) x 100 = 211.13
percent). Therefore, we believe aprevo\TM\ 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
[[Page 44583]]
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
$26,000 for aprevo\TM\ is 379.46 percent of the cost of the device-
related portion of the APC payment amount for the related service of
$6,851.93 (($26,000/$6,851.93) x 100 = 379.46 percent). Therefore, we
believe aprevo\TM\ 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 $26,000 for aprevo\TM\ and the portion of the APC
payment amount for the device of $6,851.93 is 155.49 percent of the APC
payment amount for the related service of $12,314.76 ((($26,000-
$6,851.93)/$12,314.76) x 100 = 155.49 percent). Therefore, we believe
that aprevo\TM\ meets the third cost significance requirement.
We are inviting public comment on whether aprevo\TM\ meets the
device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
(2) MicroTransponder[supreg] ViviStim[supreg] Paired Vagus Nerve
Stimulation (VNS) System (Vivistim[supreg] System)
MicroTransponder, Inc. submitted an application for a new device
category for transitional pass-through payment status for the
ViviStim[supreg] Paired VNS System (Vivistim[supreg] System) for CY
2023. Per the applicant, the Vivistim[supreg] System is intended to be
used to stimulate the vagus nerve during rehabilitation therapy in
order to reduce upper extremity motor deficits and improve motor
function in chronic ischemic stroke patients with moderate to severe
arm impairment.
According to the applicant, the Vivistim[supreg] System is an
active implantable medical device that is comprised of four main
components: (1) an Implantable Pulse Generator (IPG), (2) an
implantable Lead, (3) Stroke Application & Programming Software (SAPS),
and (4) a Wireless Transmitter (WT). The IPG and Lead comprise the
implantable components; the SAPS and WT comprise the non-implantable
components.
The applicant asserts that the key feature of the biochemical
process that underlies neural pathway development is called
neuroplasticity. The applicant describes neuroplasticity as a complex
biochemical process that is necessary for establishing new synaptic
connections. The applicant further states it is widely understood that
vagus nerve stimulation triggers the brain to release a burst of
neuromodulators, such as acetylcholine and norepinephrine, which are
enablers of neuroplasticity. In addition, the applicant further states
it is understood that pairing neuromodulator bursts with events
increases brain plasticity, which in turn increases the formation of
new neural connections.\14\ Per the applicant, the use of the external
paired stimulation controller to precisely pair VNS with rehabilitation
movements is essential to creating neuroplasticity in patients who have
upper limb deficits, and this ``event-pairing'' of movement with VNS
that generates long-lasting plasticity in the motor and sensory cortex
leads to the restored motor function observed in clinical studies.\15\
---------------------------------------------------------------------------
\14\ Meyers EC, Solorzano BR, James J, Ganzer PD, Lai ES,
Rennaker RL 2nd, Kilgard MP, Hays SA. Vagus Nerve Stimulation
Enhances Stable Plasticity and Generalization of Stroke Recovery.
Stroke. 2018 Mar;49(3):710-717.
\15\ Hays SA, Rennaker RL, Kilgard MP. Targeting plasticity with
vagus nerve stimulation to treat neurological disease. Prog Brain
Res. 2013;207:275-299. doi:10.1016/B978-0-444-63327-9.00010-2.
---------------------------------------------------------------------------
The applicant specifies the SAPS and WT are non-implantable and are
collectively called the External Paired Stimulation Controller. The
applicant specifies the IPG and implantable Lead are implantable
components. Per the applicant, the External Paired Stimulation
Controller allow the implanted components (the IPG and Lead) to
stimulate the vagus nerve while rehabilitation movement occurs through
the following process: (1) The implantable Lead electrodes are attached
to the left vagus nerve in the neck; (2) The implantable Lead is
tunneled from the neck to the chest where it is connected to the IPG;
(3) The IPG is placed subcutaneously (or sub-muscularly) in the
pectoral region; (4) Following implantation of the IPG and stimulation
Lead, the External Paired Stimulation Controller enables real-time
``event-pairing'' of vagus nerve stimulation and rehab movements; (5)
The IPG and the implantable Lead stimulate the vagus nerve while
rehabilitation movements occur; and (6) A therapist initiates the
stimulation using a USB push-button or mouse click to synchronize the
vagus nerve stimulation with rehabilitation movements to maximize the
clinical effect. Patients undergo in-clinic rehabilitation, where vagus
nerve stimulation is actively paired with rehabilitation by a
therapist. Following in-clinic rehabilitation paired with vagus nerve
stimulation, the patient can continue using the device at home. When
directed by a physician, the patient can initiate at-home use by
swiping a magnet over the IPG implant site which activates the IPG to
deliver stimulation while rehabilitation movements are performed
With respect to the newness criterion at Sec. 419.66(b)(1),
Vivistim[supreg] System was granted FDA Breakthrough Device Designation
effective February 10, 2021 for use in stimulating the vagus nerve
during rehabilitation therapy in order to reduce upper extremity motor
deficits and improve motor function in chronic ischemic stroke patients
with moderate to severe arm impairment. The applicant states the
Vivistim[supreg] System received FDA premarket approval (PMA) on August
27, 2021 as a Class III implantable device for the same indication as
the one covered by the Breakthrough Device designation. We received the
application for a new device category for transitional pass-through
payment status for the Vivistim[supreg] System on September 1, 2021,
which is within 3 years of the date of the initial FDA marketing
authorization. We are inviting public comment on whether the
Vivistim[supreg] System meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, VNS System 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) into the patient. We note that the external components
SAPS and WT are not implanted in a patient and do not come in contact
with the human tissue as required by Sec. 419.66(b)(3). The applicant
also claimed that VNS System meets the device eligibility requirements
of Sec. 419.66(b)(4) because it is not an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, and it is not a supply or material furnished incident to a
service. However, we note that the external non-implantable components
SAPS and WT may be an instrument, apparatus, implement, or item for
which depreciation and financing expenses are recovered and may be
considered depreciable assets as described in Sec. 419.66(b)(4). We
are inviting public comments on whether VNS System
[[Page 44584]]
meets the eligibility criteria at Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996.
According to the applicant, there are several device categories
that are similar to or related to the proposed device category. The
applicant stated that there are five HCPCS device category codes
describing neurostimulation devices that are similar to the
Vivistim[supreg] System, listed in the following table below.
[GRAPHIC] [TIFF OMITTED] TP26JY22.122
Per the applicant, the codes in the table above do not encompass
the Vivistim[supreg] System because none of the codes feature an
external paired stimulation controller to actively pair stimulation
with rehabilitation by a clinician, which is integral to the function
and clinical benefit of the device, and the ViviStim[supreg] System
does not include a rechargeable battery or charging system. The
following paragraphs include the applicant's description of each
related device category, the distinguishing device features and/or
accessories of devices included in each of these categories, and the
applicant's rationale for why the Vivistim[supreg] System device is not
encompassed by these existing device categories.
Per the applicant, the Vivistim[supreg] System and similar device
category codes that have preceded it (C1820, C1822, C1823, C1825) are
distinct from the C1767 device category because of distinguishing
device features and/or accessories not currently described by C1767.
The applicant stated that the C1767 was created in 2000 and was the
first category for non-rechargeable neurostimulator generators. Per the
applicant, the C1767 code currently describes multiple non-rechargeable
neurostimulator generator devices that are approved to treat a wide
variety of conditions. The applicant stated it is aware of currently
marketed implantable, non-rechargeable vagus nerve stimulation devices,
such as the VNS Therapy[supreg] System (LivaNova, PLC) which are
described by C1767. Further, the applicant stated it is aware that CMS
does not acknowledge indication for use alone as a reasonable basis to
establish a new device category. According to the applicant, the VNS
Therapy[supreg] System (LivaNova, PLC) has different device components
and therapy delivery than the Vivistim[supreg] System. Per the
applicant, the LivaNova VNS Therapy[supreg] System implantable
neurostimulators differ from the Vivistim[supreg] System in a number of
ways. Specifically, according to the applicant, VNS Therapy[supreg]
System neurostimulators are ``always on'' and send periodic pulses to
deliver therapy over the life of the device, whereas the
Vivistim[supreg] System is actively paired with rehabilitation
movements by a clinician to deliver therapy. In addition, the applicant
stated the VNS Therapy[supreg] System is used to treat neurological
disorders such as epilepsy and treatment resistant depression, whereas
the Vivistim[supreg] System is used to treat upper limb motor deficits
in ischemic stroke survivors. The applicant concluded C1767 does not
encompass the Vivistim[supreg] System.
Per the applicant, C1820 describes an implantable neurostimulator
that includes a rechargeable battery and charging system. The applicant
stated it is aware of several marketed devices that are described by
device category C1820 which was created in CY 2006. The applicant
concluded C1820 does not encompass the Vivistim[supreg] System. Per the
applicant, C1822 describes an implantable neurostimulator, which
delivers ``high-frequency'' stimulation (10 kHz) and is provided with a
rechargeable battery and charging system. The applicant stated it is
aware of only one currently marketed device that is described by this
device category, the HF10[supreg] Spinal Cord Stimulator (Nevro Corp.).
The applicant stated the Vivistim[supreg] System is not a ``high-
frequency'' stimulator as described by C1822. The applicant stated the
paired stimulation using the Vivistim[supreg] System is delivered at a
maximum of 30 Hz, whereas spinal cord stimulation using the
HF10[supreg] (Nevro Corp.) is delivered at 10 kHz. The applicant
concluded C1822 does not encompass the Vivistim[supreg] System.
[[Page 44585]]
According to the applicant, C1823 describes an implantable
neurostimulator, which is nonrechargeable and includes transvenous
sensing and stimulation leads. The applicant stated that it is aware of
only one currently marketed device that is described by C1823, the
remed[emacr] System[supreg] Phrenic Nerve Stimulator (Respicardia,
Inc.). This device category code does not encompass the
Vivistim[supreg] System. According to the applicant, the stimulation
lead included in the Vivistim[supreg] System is placed onto the vagus
nerve and is not transvenously placed to stimulate the phrenic nerve.
In addition, the applicant asserted the Vivistim[supreg] System does
not include a sensing lead. The applicant concluded C1823 does not
encompass the Vivistim[supreg] System.
Per the applicant, C1825 describes an implantable neurostimulator
which is nonrechargeable and includes a carotid sinus baroreceptor
lead. The applicant stated it is aware of only one currently marketed
device that is described by C1825, the BaroStim Neo\TM\ (CVRx, Inc.).
According to the applicant, the stimulation lead included in the
ViviStim[supreg] System is placed onto the vagus nerve and is not
placed on the carotid sinus. The applicant concluded C1825 does not
encompass the Vivistim[supreg] System.
The applicant has asserted that the Vivistim[supreg] System is
distinct from HCPCS codes C1820, C1822, C1823 and C1825 due to
distinguishing features unique to these codes. These unique features
include rechargeable batteries, high frequency stimulation, transvenous
sensors and stimulators and unique placement of stimulators. With
respect to C1767, however, the applicant's argument is that the
Vivistim[supreg] System is not ``always on'' and is paired to an
external stimulation controller to allow for clinician-controlled
stimulation during rehabilitation, and therefore is unlike the non-
rechargeable implantable neurostimulator of the VNS Therapy[supreg]
System (LivaNova, PLC), which is described by C1767. It is our
understanding, however, that implantable neurostimulators for epilepsy
and depression are not ``always on'', but are programmed to turn on and
off in specific cycles as determined by a clinician. Furthermore, in
the case of treatment for epilepsy, a neurostimulator can be turned on
by the patient with a hand held magnet if an impending seizure is
sensed, and the neurostimulator can similarly be turned off by the
patient during certain activities, such as speaking, exercising, or
eating. As per the application, the IPG of the Vivistim[supreg] System
can also be patient-engaged with a magnetic card, allowing the patient
to continue therapy at home. In this context, we believe the
Vivistim[supreg] System may be similar to the devices currently
described by C1767, and therefore the Vivistim[supreg] System may also
be appropriately described by C1767. We are inviting public comment on
whether the Vivistim[supreg] System meets the device category
criterion.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
That a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. 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 for the indication covered by the Breakthrough Device
designation in the CY 2020 OPPS/ASC final rule with comment period (84
FR 61295). The Vivistim[supreg] System has a Breakthrough Device
designation and marketing authorization from FDA for the indication
covered by the Breakthrough Device designation (as explained in more
detail in the discussion of the newness criterion) and therefore is not
evaluated for substantial clinical improvement. We note that the
applicant has also submitted an application for IPPS New Technology
Add-on payments for FY 2023 Payment under the Alternative Pathway for
Breakthrough Devices (87 FR 28349 through 28350).
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 insertion
procedure for the Vivistim[supreg] System implantable pulse generator
(IPG) and stimulation lead would be reported with the HCPCS Level I CPT
code 64568 (Incision for implantation of cranial nerve (e.g., vagus
nerve) neurostimulator electrode array and pulse generator).
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. 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. For our calculations, we used APC 5465
Level 5 Neurostimulator and Related Procedures, which had a CY 2021
payment rate of $29,444.52 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
64568 had a device offset amount of $25,236.9 at the time the
application was received. According to the applicant, the cost of the
Vivistim[supreg] System is $36,000.00.
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 $36,000.00 for Vivistim[supreg] System is
122.26 percent of the applicable APC payment amount for the service
related to the category of devices of $29,444.52 (($36,000.00/
$29,444.52) x 100 = 122.26 percent). Therefore, we believe
Vivistim[supreg] System meets the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $36,000.00 for
Vivistim[supreg] System is 142.65 percent of the cost of the device-
related portion of the APC payment amount for the related service of
$25,236.90 (($36,000.00/$25,236.90) x 100 = 142.65 percent). Therefore,
we believe that Vivistim[supreg] System meets the second cost
significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the
[[Page 44586]]
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 $36,000.00
for Vivistim[supreg] System and the portion of the APC payment amount
for the device of $25,236.90 is 36.55 percent of the APC payment amount
for the related service of $29,444.52 (($36,000.00-$25,236.90)/
$29,444.52) x 100 = 36.55 percent). Therefore, we believe that
Vivistim[supreg] System meets the third cost significance requirement.
We are inviting public comment on whether Vivistim[supreg] System
meets the device pass-through payment criteria discussed in this
section, including the cost criterion for device pass-through payment
status.
2. Traditional Device Pass-Through Applications
(1) The BrainScope TBI (Model: Ahead 500)
BrainScope Company Inc. submitted an application for a new device
category for transitional pass-through payment status for the
BrainScope Ahead 500 system (hereinafter referred to as the BrainScope
TBI) for CY 2023. The BrainScope TBI is a handheld medical device and
decision-support tool that uses artificial intelligence (AI) and
machine learning technology to identify objective brain-activity based
biomarkers of structural and functional brain injury in patients with
suspected mild traumatic brain injury (mTBI). According to the
applicant, the BrainScope TBI is an FDA-cleared, portable, non-
invasive, point-of-care device and disposable headset intended to
provide results and measures to aid in the rapid, objective, and
accurate diagnosis of mTBI. Per the applicant, the BrainScope TBI is
intended to be used in emergency departments (ED), urgent care centers,
clinics, and other environments where used by trained medical
professionals under the direction of a physician.
According to the applicant, the BrainScope TBI is comprised of two
elements: (1) the Ahead 500, a disposable forehead-only 8-electrode
headset temporarily applied to the patient's skin to assess brain
injury (the wounded area) which records electroencephalogram (EEG)
signals; and (2) a reusable handheld device (hereinafter ``Handheld
Device''), which includes a standard commercial off-the-shelf handheld
computer connected to a custom manufactured Data Acquisition Board
(DAB) via a permanently attached cable. The applicant stated that the
BrainScope software (including proprietary BrainScope algorithms) and a
kiosk mode application running on Android are loaded onto an off-the-
shelf handheld computer configuration. The disposable headset is
attached to the DAB, which collects the EEG signal and passes it as a
digital signal to the Handheld Device to perform the data processing
and analysis.
According to the applicant, the BrainScope TBI device is intended
to record, measure, analyze, and display brain electrical activity
utilizing the calculation of standard quantitative EEG (qEEG)
parameters from frontal locations on a patient's forehead. Patient
information is transferred to electronic health records via USB
connected to a computer. The BrainScope TBI calculates and displays raw
measures for the following standard qEEG measures: Absolute and
Relative Power, Asymmetry, Coherence and Fractal Dimension. The
applicant asserts that these raw measures are intended to be used for
post-hoc analysis of EEG signals for interpretation by a qualified
user. Per the applicant, the device can be used as a screening tool and
aid in determining the medical necessity of head computerized
tomography (CT) scanning.
With respect to the newness criterion at Sec. 419.66(b)(1), on
September 11, 2019, the applicant received 510(k) clearance from FDA
for the BrainScope TBI as a Class II device for use as an adjunct to
standard clinical practice to aid in the evaluation of patients who
have sustained a closed head injury, and have a Glasgow Coma Scale
(GCS) score of 13-15 (including patients with concussion/mild traumatic
brain injury (mTBI)). We received the application for a new device
category for transitional pass-through payment status for the
BrainScope TBI on February 23, 2022, which is within 3 years of the
date of the initial FDA marketing authorization. We are inviting public
comments on whether the BrainScope TBI meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the BrainScope TBI is integral to the
service provided and is used for one patient only. Per the applicant,
the Ahead 500 component records EEG signals via a disposable forehead-
only 8-electrode headset and is temporarily applied to the patient's
skin to assess brain injury. We note that while the Ahead 500 component
is used for one patient only and it is temporarily applied to the
patient's skin, the device is not surgically implanted or inserted or
applied in or on a wound or other skin lesion, as required by 42 CFR
418.66(b)(3). We further note that the other component of the
BrainScope TBI, the Handheld Device, does not come in contact with the
patient's tissue, and the device is not surgically implanted or
inserted or applied in or on a wound or other skin lesion, as required
by Sec. 418.66(b)(3). Per the applicant, the Handheld Device is used
by multiple patients. We further question whether this device may be an
instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered in accordance with the device
eligibility requirements of Sec. 419.66(b)(4). The applicant did not
indicate if the BrainScope TBI is a supply or material furnished
incident to a service. We are inviting public comments on whether the
BrainScope TBI meets the eligibility criteria at Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. The
applicant has not identified any existing pass-through payment category
that describes the BrainScope TBI. Upon review, it does not appear that
there are any existing pass-through payment categories that might apply
to the BrainScope TBI. We are inviting public comment on whether the
BrainScope TBI meets the device category criterion.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of FDA's Breakthrough Devices Program and has received
FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The applicant indicated that it is
aware of a marketed medical device COGNISION, which fits the proposed
additional device category in addition to the BrainScope TBI. According
to the applicant, the
[[Page 44587]]
COGNISION[supreg] System (COGNISION[supreg]) is cleared by FDA for use
by qualified clinical professionals in private practice offices or
small clinical settings for the acquisition, display, analysis,
storage, reporting and management of EEG and auditory evoked potentials
(AEP) information. The applicant stated that the COGNISION[supreg]
cloud-powered electrophysiologic testing system evaluates patients with
neurological disorders, such as dementia and concussion. According to
the applicant, by measuring the electrical activity in the brain that
is responsible for information processing, COGNISION[supreg] assesses
cognitive function. The applicant also pointed out that
COGNISION[supreg] evaluates working memory, focal attention, executive
function, and brain processing speed through Event Related Potential
(ERP) and qEEG tests. The applicant acknowledged that COGNISION[supreg]
also measures hearing deficits which can be co-morbid with cognitive
disorders.
The applicant stated that the BrainScope TBI represents a
substantial clinical improvement over existing technology. With respect
to this criterion, the applicant submitted studies that examined the
impact of the BrainScope TBI as a brain injury adjunctive interpretive
electroencephalograph assessment aid. Broadly, the applicant outlined
the following areas in which it stated the BrainScope TBI would provide
a substantial clinical improvement over existing technologies: (1)
decreased rate of repeat/subsequent diagnostic or therapeutic
interventions, (2) more rapid beneficial resolution of the disease
process treated because of the use of the device, and (3) reduced
recovery time when used for the treatment mild head injuries (mTBI).
In support of its first claim that the BrainScope TBI decreases the
rate of subsequent diagnostic or therapeutic interventions, the
applicant provided five articles. The first was a multisite,
prospective observational FDA validation trial performed in the
U.S.\16\ A total of 720 patients (18-85 years) meeting inclusion/
exclusion criteria were enrolled at 11 U.S. EDs. Ninety-seven percent
of study participants had a Glasgow Coma Scale (GCS) of 15, with the
first and third quartiles being 15 (interquartile range = 0) at the
time of the evaluation. Standard clinical evaluations were conducted,
and 5 to 10 minutes of EEG was acquired from frontal and frontotemporal
scalp locations. Using an a priori derived EEG-based classification
algorithm developed on an independent population and applied to this
validation population prospectively, the likelihood of each subject
being CT+ was determined, and performance metrics were computed
relative to adjudicated CT findings. The authors stated that by using
an EEG-based biomarker, high accuracy of predicting the likelihood of
being CT+ was obtained, with high normalized power variance (NPV) and
sensitivity to any traumatic bleeding and to hematomas. Per the
authors, specificity was significantly higher than standard CT decision
rules and the short time to acquire results and the ease of use in the
ED environment suggests that EEG-based classifier algorithms have
potential to impact triage and clinical management of head-injured
patients. Both the applicant and the authors indicated that the
BrainScope TBI Structural Injury Classifier (SIC) \17\ biomarker
demonstrated extremely high sensitivity in this validation study.
Sensitivity for those who are CT+ with >=1mL blood was 98.6 percent
(72/73, 95% CI = 92.6%-100.0 percent), with an area under the curve
(AUC) of 0.82. It is noted that this study could not be run as a
randomized controlled trial (RCT) as the individual site institutional
review boards (IRBs) would not allow random assignment to determination
to receive a CT, which was entirely at the discretion of the clinician.
Results supported the potential to impact triage and clinical
management and help in avoidance of unnecessary CT scans. High NPV
supports confidence added to decisions not to perform a CT scan. In
this validation study, the BrainScope TBI's SIC biomarker reported 2%
false negatives (FNs), none of which were considered by clinical sites
or FDA to be ``clinically important,'' and all of which were confirmed
in follow-up as requiring no further care. In the same large FDA
prospective validation study, the BrainScope's SIC biomarker had
specificity of 51.60 percent (291/564, 95 percent CI = 48.05 percent-
55.13 percent). In the same population, SIC specificity outperformed
that of the standard clinical CT decision rules, with the New Orleans
Criteria (NOC) = 8.6 percent and Canadian CT Head Rule (CCHR) = 31
percent. Higher specificity relative to standard practice supports
reduced CT referrals. In the same large FDA prospective validation
study specificity of the BrainScope TBI's SIC biomarker was shown to
scale with severity of clinical functional impairment, with
specificities of 76.7 percent, 58.8 percent, and 22.2 percent for none,
mild, and moderate functional impairment, respectively.
---------------------------------------------------------------------------
\16\ Hanley D, Prichep LS, Bazarian J, Huff JS, Naunheim R,
Garrett J, Jones EB, Wright DW, O'Neill J, Badjatia N, Gandhi D.
Emergency department triage of traumatic head injury using a brain
electrical activity biomarker: a multisite prospective observational
validation trial. Academic emergency medicine. 2017 May;24(5):617-
27.
\17\ The SIC is an electrophysiological based biomarker derived
from selected EEG features and a small set of clinical associated
symptoms, using machine learning and advanced classification
algorithms to identify those features which optimally characterize
the pattern of changes in brain function that occur with head
injury.
---------------------------------------------------------------------------
The second article was a retrospective secondary study of the
independent prospective FDA validation trial that demonstrated the
efficacy of (1) an automatic SIC for the likelihood of injury visible
on a CT (CT+) and (2) an EEG-based Brain Function Index (BFI) to assess
functional impairment in minimally impaired, head-injured adults
presenting within 3 days of injury.\18\ In this retrospective analysis,
the impact on the biomarker performance in patients who presented with
or without drug and alcohol (DA) was studied. DA-ED visits represent an
increasing fraction of the head-injured population seen in the ED. Such
patients present a challenge to the evaluation of head injury and
determination of need for CT scan and further clinical pathways. This
effort examined whether an EEG-based biomarker could aid in reducing
unnecessary CT scans in the intoxicated ED population. SIC sensitivity
was not significantly impacted by the presence of DA. Although
specificity decreased, it remained several times higher than obtained
using standard CT decision rules. Furthermore, according to the
authors, the potential to reduce the number of unnecessary scans by
approximately 30% was demonstrated when the BrainScope TBI SIC was
integrated into CT clinical triage. According to the authors, the BFI
was demonstrated to be independent of the presence of DA.
---------------------------------------------------------------------------
\18\ Michelson, E., Huff, J.S., Garrett, J., & Naunheim, R.
(2019). Triage of mild head-injured intoxicated patients could be
aided by use of an electroencephalogram-based biomarker. Journal of
neuroscience nursing, 51(2), 62-66.
---------------------------------------------------------------------------
The third article was a retrospective clinical study conducted in
the U.S.\19\ Two potential initial evaluation pathways were compared
for CT referrals: a. Clinical Site Practice Referral, relying on
clinical judgement of the ED physician according to site standard of
care; and b. EEG-based
[[Page 44588]]
classification algorithm assessment, relying on the ternary output of
the SIC (positive, negative, equivocal) to inform CT referral decision.
The SIC is an electrophysiological based biomarker derived from
selected EEG features and a small set of clinical associated symptoms,
using machine learning and advanced classification algorithms to
identify those features which optimally characterize the pattern of
changes in brain function that occur with head injury. Of the 91
patients referred to CT, 13 were read as positive and 78 as negative.
These 91 CT referrals made using the clinical judgement decision
pathway resulted in 78 patients who were found to be CT negative. Using
the second pathway with input from the EEG based classification
algorithm assessment (SIC) resulted in 63 patients who were positive
for CT referral. Thus, the researchers stated that the use of the EEG-
based algorithm decision pathway to aid in referral for CT scanning
would have resulted in 63 patients being referred for CT scans instead
of 91 referrals made following standard clinical site practice. Per the
researchers, this represents a reduction of 28 fewer head CT scans, a
30.8 percent (= (91-63)/91) reduction. According to the researchers,
while still early in the clinical use of this EEG based biomarker, this
data demonstrates that the BrainScope TBI medical device can provide
objective information to aid in the initial assessment of mTBI patients
in the ED. The researchers suggested that integrating this data into
the decision-making process for CT referrals would have led to a
significant reduction of ~31 percent in CT scanning. The researchers
concluded that this decrease in CT use and its associated radiation was
achieved without incurring any false negative cases (100 percent
sensitivity).
---------------------------------------------------------------------------
\19\ Naunheim, R., Koscso, M. K., & Poirier, R. (2019).
Reduction in unnecessary CT scans for head-injury in the emergency
department using an FDA cleared device. The American journal of
emergency medicine, 37(10), 1987-1988.
---------------------------------------------------------------------------
The fourth article was a retrospective clinical study conducted in
the U.S.\20\ The study authors found that heightened awareness of the
potential short and long-term consequences of mild traumatic brain
injury (mTBI or concussion) has resulted in an increase in ED visits
for traumatic head injury, even as the volume of overall ED visits has
remained stable over the same period of time.\21\ While the vast
majority (~95%) of these head injured patients are mild, >80% receive
CT scans of which ~91% are found to be negative.\22\ The rising number
of negative CT findings, cost, radiation exposure, and ED resource
utilization, has led to an increased need for reliable predictors of
intracranial injury in the mild head injured population.\23\ Based on a
retrospective analysis of data collected in the BrainScope's multisite
independent FDA validation study, it was found that had the SIC been
used in determination as an input for CT scan referral, there would
have been a reduction of false positives of 33.3% (408272/408). In
addition, according to the study, a significantly lower false discovery
rate of 65% (= 272/416) was achieved compared to the clinical site
practice (one-sided comparison, p = 0.01).
---------------------------------------------------------------------------
\20\ Huff, J.S., Naunheim, R., Dastidar, S.G., Bazarian, J., &
Michelson, E.A. (2017). Referrals for CT scans in mild TBI patients
can be aided by the use of a brain electrical activity biomarker.
The American Journal of Emergency Medicine, 35(11), 1777-1779.
\21\ Marin, J.R., Weaver, M.D., Yealy, D.M., & Mannix, R.C.
(2014). Trends in visits for traumatic brain injury to emergency
departments in the United States. Jama, 311(18), 1917-1919.
\22\ Korley, F.K., Kelen, G.D., Jones, C.M., & Diaz-Arrastia, R.
(2016). Emergency department evaluation of traumatic brain injury in
the United States, 2009-2010. The Journal of head trauma
rehabilitation, 31(6), 379.
\23\ American College of Emergency Physicians. (2015). ACEP
Announces List of Tests as Part of Choosing Wisely Campaign.
---------------------------------------------------------------------------
The fifth article was a retrospective clinical study conducted in
the U.S.\24\ This study compares the predictive power using that
algorithm (which includes loss of consciousness (LOC) and amnesia), to
the predictive power of LOC alone or LOC plus traumatic amnesia. Study
participants consisted of ED patients 18-85 years who presented within
72 hours of closed head injury, with Glasgow Coma Scale (GCS) between
12-15. 680 patients with known absence or presence of LOC were enrolled
(145 CT + and 535 CT - patients). 5-10 min of eyes closed EEG was
acquired using the Ahead 300 handheld device, from frontal and
frontotemporal regions. The same classification algorithm methodology
was used for both the EEG-based and the LOC-based algorithms.
Predictive power was evaluated using area under the receiver operator
characteristic (ROC) curve (AUC) and odds ratios. The Quantitative EEG-
based classification algorithm demonstrated significant improvement in
predictive power compared with LOC alone, both in improved AUC (83%
improvement) and odds ratio (increase from 4.65 to 16.22). Adding
retrograde amnesia (RGA) and/or post-traumatic amnesia (PTA) to LOC was
not improved over LOC alone. The AUC for LOC only predictive method was
0.68, and for LOC +RGA/PTA was 0.69. The AUC for the BrainScope
structural injury classifier is 0.83, which represents an 83%
improvement over the standard clinical predictors (LOC and/or RGA).
Rapid triage of TBI relies on strong initial predictors. The authors
concluded that the addition of an electrophysiological based marker was
shown to outperform report of LOC alone or LOC plus amnesia, in
determining risk of an intracranial bleed. In addition, according to
the authors, ease of use at point-of-care, non-invasive, and rapid
result using such technology suggests significant value added to
standard clinical prediction.
---------------------------------------------------------------------------
\24\ Hack, D., Huff, J.S., Curley, K., Naunheim, R., Dastidar,
S.G., & Prichep, L.S. (2017). Increased prognostic accuracy of TBI
when a brain electrical activity biomarker is added to loss of
consciousness (LOC). The American Journal of Emergency Medicine,
35(7), 949-952.
---------------------------------------------------------------------------
With respect to the claim that the BrainScope TBI provides for a
more rapid, beneficial resolution of the disease process treated, the
applicant provided a consensus modeling retrospective clinical study
conducted in the U.S.\25\ The study researchers developed a care map
that included each step of evaluation of mTBI (Glasgow Coma Scale Score
13-15), from initial presentation to the ED to discharge. Time spent at
each step was estimated by study-affiliated emergency physicians and
nurses. The study subsequently validated time estimates using
retrospectively collected, real-time data at two EDs. Length of stay
(LOS) time differences between admission and discharged patients were
calculated for patients being evaluated for mTBI. Evaluation of time
from ED intake to discharge in a mTBI population was modeled by a
medical consensus group and validated in retrospective review of real-
time data. Mean time was 6.6 hours. Time related to head CT comprised
about one-half of the total LOS. The authors concluded that limiting
use of head CT as part of the workup of mTBI to more serious cases may
reduce time spent in the ED and potentially improve overall ED
throughput.
---------------------------------------------------------------------------
\25\ Michelson, E.A., Huff, J.S., Loparo, M., Naunheim, R.S.,
Perron, A., Rahm, M., & Berger, A. (2018). Emergency department time
course for mild traumatic brain injury workup. Western Journal of
Emergency Medicine, 19(4), 635.
---------------------------------------------------------------------------
To support the claim of a decreased rate of subsequent diagnostic
or therapeutic interventions and reduced recovery time using the
device, the applicant provided a retrospective clinical pilot study
conducted in the U.S.\26\ that focused on the immediate use and
implementation of the BrainScope TBI in the ED environment for the
triage of 19 head-injured
[[Page 44589]]
patients: ages 18 to 85, GCS 13-15, within 72 hours of injury, from
April 26th to May 1, 2021. According to this study, the results
reinforced the clinical utility of the BrainScope technology to be a
reliable tool for clinicians to proactively catch injuries that may not
have been sent for CT and to reduce unnecessary CT's, thus reducing
LOS. The author indicated that the BrainScope TBI was an effective
decision-making aide in determining the appropriate use of imaging for
closed head injuries. The author stated that within one rapid EEG test
at the point of care, the BrainScope provided objective data on both
brain bleeds and concussions to assist healthcare providers evaluate
head injured patients. According to the author, this study was
successful in determining utilization, staff assessment, and patient
experience of the BrainScope technology in daily use. The author noted
the results of the trial were positive and demonstrated the following:
(1) 100 percent patient satisfaction with BrainScope; (2) Improved CT
utilization in the mild TBI patient population: 60 percent reduction in
head CT. Decreased radiation exposure. One patient was sent for CT
after receiving a positive result from BrainScope TBI SIC that was
found CT positive and who may not have been sent otherwise; and (3)
Decreased LOS for patients who were BrainScope negative for structural
injury. An average of 16-minute testing times had a positive impact on
LOS for patients who were BrainScope negative.
---------------------------------------------------------------------------
\26\ Clay, M.S. Clinical Utility of an EEG Based Biomarker for
the Triage of Head Injured Patients in the ED: INOVA Pilot Study.
---------------------------------------------------------------------------
In support of the claim that the BrainScope TBI reduces recovery
time, the applicant submitted four articles. The first was a
prospective clinical study conducted in the U.S.\27\ The potential
clinical utility of a quantitative EEG-based BFI as a measure of the
presence and severity of functional brain injury was studied as part of
an independent prospective validation trial. The BFI was derived using
qEEG features associated with functional brain impairment reflecting
current consensus on the physiology of concussive injury. The applicant
asserted that the results supported FDA clearance for the BFI as a
quantitative marker of brain function impairment. Per the applicant, a
multinomial logistic regression analysis demonstrated odds ratios
(versus controls) of the mild and moderate functionally impaired groups
were significantly different from the odds ratio of the severe group
(CT+), (p=0.0009, p=0.0026, respectively). Per the applicant,
regression slopes for likelihood of group membership demonstrated that
BFI scaled with severity of impairment contributed to earlier
identification and intervention of concussion, which is associated with
better outcomes.
---------------------------------------------------------------------------
\27\ Hanley D, Prichep LS, Badjatia N, Bazarian J, Chiacchierini
R, Curley KC, Garrett J, Jones E, Naunheim R, O'Neil B, O'Neill J,
Wright DW, Huff JS. A Brain Electrical Activity
Electroencephalographic-Based Biomarker of Functional Impairment in
Traumatic Brain Injury: A Multi-Site Validation Trial. J
Neurotrauma. 2018 Jan 1;35(1):41-47. doi: 10.1089/neu.2017.5004.
Epub 2017 Sep 21. PMID: 28599608.
---------------------------------------------------------------------------
Another article provided by the applicant to support the claim of
reduced recovery time associated with the use of the BrainScope TBI,
was a multisite prospective observational validation trial conducted in
the U.S.\28\ The study was to validate the classification accuracy of a
previously derived, machine learning, multimodal, brain electrical
activity-based Concussion Index (CI) in an independent cohort of
athletes with concussion. This prospective diagnostic cohort study was
conducted at 10 clinical sites (i.e., U.S. universities and high
schools) between February 4, 2017 and March 20, 2019. A cohort
comprised of a consecutive sample of 207 athletes aged 13 to 25 years
with concussion and 373 matched athlete controls without concussion
were assessed with electroencephalography, cognitive testing, and
symptom inventories within 72 hours of injury, at return to play, and
45 days after return to play. Variables from the multimodal assessment
were used to generate a Concussion Index at each time point. Athletes
with concussion had experienced a witnessed head impact, were removed
from play for 5 days or more, and had an initial Glasgow Coma Scale
score of 13 to 15. Participants were excluded for known neurologic
disease or history within the last year of traumatic brain injury.
Athlete controls were matched to athletes with concussion for age, sex,
and type of sport played. Classification accuracy of the CI at time of
injury using a prespecified cutoff of 70 or less (total range, 0-100,
where <=70 indicates it is likely the individual has a concussion and
>70 indicates it is likely the individual does not have a concussion).
Results included 580 eligible participants with analyzable data, of
whom 207 had concussion (124 male participants [59.9 percent]; mean
[standard deviation (SD)] age, 19.4 [2.5] years), and 373 were athlete
controls (187 male participants [50.1 percent]; mean [SD] age, 19.6
[2.2] years). The CI had a sensitivity of 86.0 percent (95 percent CI,
80.5 percent-90.4 percent), specificity of 70.8 percent (95 percent CI,
65.9 percent-75.4 percent), negative predictive value of 90.1 percent
(95 percent CI, 86.1 percent-93.3 percent), positive predictive value
of 62.0 percent (95 percent CI, 56.1 percent-67.7 percent), and area
under receiver operator characteristic (ROC) curve of 0.89. At day 0,
the mean [SD] CI among athletes with concussion was significantly lower
than among athletes without concussion (75.0 [14.0] vs 32.7 [27.2]; P
<.001). The researchers noted that among athletes with concussion,
there was a significant increase in the CI between day 0 and return to
play, with a mean (SD) paired difference between these time points of -
41.2 (27.0) (P <.001). The researchers concluded that these results
suggest that the multimodal brain activity-based CI has high
classification accuracy for identification of the likelihood of
concussion at time of injury and may be associated with the return to
control values at the time of recovery. According to the researchers,
the CI has the potential to aid in the clinical diagnosis of concussion
and in the assessment of athletes' readiness to return to play.
---------------------------------------------------------------------------
\28\ Bazarian, J.J., Elbin, R.J., Casa, D.J., Hotz, G.A.,
Neville, C., Lopez, R.M., . . . & Covassin, T. (2021). Validation of
a machine learning brain electrical activity-based index to aid in
diagnosing concussion among athletes. JAMA network open, 4(2),
e2037349-e2037349.
---------------------------------------------------------------------------
The final article provided by the applicant in support of the claim
of reduced recovery time was a multisite prospective observational
validation trial conducted in the U.S.\29\ This study was to derive an
objective multimodal CI using EEG at its core, to identify concussion,
and to assess change over time throughout recovery. Male and female
concussed (n = 232) and control (n = 206) subjects 13-25 years were
enrolled at 12 U.S. colleges and high schools. Evaluations occurred
within 72 hours of injury, 5 days post-injury, at return-to-play (RTP),
45 days after RTP (RTP + 45); and included EEG, neurocognitive
performance, and standard concussion assessments. Concussed subjects
had a witnessed head impact, were removed from play for >=5 days using
site guidelines and were divided into those with RTP <14 or >=14 days.
Part 1 of this paper described the derivation and efficacy of the
machine learning derived classifier as a marker of concussion. Part 2
of this paper described significance of
[[Page 44590]]
differences in CI between groups at each time point and within each
group across time points. Per the researchers, the CI was shown to have
high accuracy as a marker of likelihood of concussion and stability of
CI in controls supports reliable interpretation of CI change in
concussed subjects. The researchers concluded that the objective
identification of the presence of concussion and assessment of
readiness to return to normal activity can be aided by use of the CI, a
rapidly obtained, point of care assessment tool. Sensitivity = 84.9
percent, specificity = 76.0 percent, and AUC = 0.89 were obtained on a
test Hold-Out group representing 20 percent of the total dataset. Per
the study, EEG features reflecting connectivity between brain regions
contributed most to the CI. CI was stable over time in controls.
According to the researchers, significant differences in CI between
controls and concussed subjects were found at time of injury, with no
significant differences at RTP and RTP + 45. Within the concussed, the
researchers were able to identify differences in rate of recovery.
---------------------------------------------------------------------------
\29\ Jacquin AE, Bazarian JJ, Casa DJ, Elbin RJ, Hotz G, Schnyer
DM, Yeargin S, Prichep LS, and Covassin T. Concussion assessment
potentially aided by use of an objective multimodal concussion
index. Journal of Concussion. January 2021. doi:10.1177/
20597002211004333.
---------------------------------------------------------------------------
Based on the evidence submitted with the application, we note the
following concerns. We note that most articles and citations provided
by BrainScope are prospective observational studies or retrospective
review articles, and most findings appear to be suggestive, rather than
conclusive, of an association or significant benefit. Within the
retrospective and prospective studies lacking a control subset, we note
that some level of selection bias may potentially influence outcomes
seen in these studies. Further, we note that confounding often occurs
in both prospective and retrospective studies, which may result in
misinterpretation of the observed relationships between the dependent
and independent values. In most of the studies, the authors did not
address potential confounding issues, which makes it difficult to
determine whether the BrainScope TBI or the control was effective with
its results.
We further note that the applicant provided retrospective clinical
validation studies,30 31 which describe findings for
previous BrainScope technology, the BrainScope Ahead 300 handheld
device, not the nominated BrainScope Ahead 500 handheld device. Per the
applicant, the BrainScope Ahead 500 improves upon the prior versions of
BrainScope's own previously FDA-cleared devices. The applicant does not
provide comparative outcome data between the current and previous
versions. Additional information regarding comparative outcomes data
would help inform our assessment of whether the BrainScope TBI Ahead
500 demonstrates a substantial clinical improvement over existing
technologies, including the BrainScope Ahead 300. We note concern that
even though the applicant states that it is a prospective trial the
paper was noted to be a retrospective secondary study of an independent
study by FDA.
---------------------------------------------------------------------------
\30\ Hack, D., Huff, J.S., Curley, K., Naunheim, R., Dastidar,
S.G., & Prichep, L.S. (2017). Increased prognostic accuracy of TBI
when a brain electrical activity biomarker is added to loss of
consciousness (LOC). The American Journal of Emergency Medicine,
35(7), 949-952.
\31\ Hanley D, Prichep LS, Bazarian J, Huff JS, Naunheim R,
Garrett J, Jones EB, Wright DW, O'Neill J, Badjatia N, Gandhi D.
Emergency department triage of traumatic head injury using a brain
electrical activity biomarker: a multisite prospective observational
validation trial. Academic emergency medicine. 2017 May;24(5):617-
27.
---------------------------------------------------------------------------
Lastly, we note that the cited studies have a small sample size. In
addition, conclusions in the application regarding the referenced
observational and retrospective studies about substantial clinical
improvement appear to be overly broad and imply statistical
significance, when only a possible association may in fact be
supported. We further note that the majority of the studies lacked a
comparator to the existing technologies that the applicant identified
when assessing the effectiveness of the BrainScope TBI. In addition,
the applicant identified the COGNISION[supreg] System as an existing
device, but we did not receive any citations or supporting references
regarding comparability of these technologies. We also note that there
are two additional FDA-cleared, potential alternate therapies
32 33 that could be relevant, but the applicant did not
provide citations or supporting references regarding comparability
specifically in the application. Additional information regarding
comparative outcomes data would help inform our assessment of whether
the BrainScope TBI demonstrates a significant clinical improvement over
existing technologies.
---------------------------------------------------------------------------
\32\ https://abbott.mediaroom.com/2021-01-11-Abbott-Receives-FDA-510-k-Clearance-for-the-First-Rapid-Handheld-Blood-Test-for-Concussions.
\33\ https://www.mobihealthnews.com/news/syncthink-scores-fda-clearance-ai-system-aid-concussion-diagnosis.
---------------------------------------------------------------------------
We are inviting public comments on whether the BrainScope TBI meets
the substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that BrainScope TBI
would be reported with HCPCS codes listed in the following table:
[[Page 44591]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.039
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. As we explained in the CY 2005 OPPS final rule with comment
period (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. For our
calculations, we used APC 5731--Level 1 Minor Procedures, which had a
CY 2021 payment rate of $24.67 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).
However, we note that all the HCPCS codes identified by the applicant
had a device offset amount of $0.00 at the time the application was
received, including the HCPCS code 96146. Accordingly, we are
evaluating the cost significance requirements consistent with how we
previously have treated other items with a device offset amount of
$0.00 (see 84 FR 61285). According to the applicant, the cost of
BrainScope TBI (single use disposable electrode headset) is $225.00.
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 $225.00 for BrainScope TBI is 912.04 percent
of the applicable APC payment amount for the service related to the
category of devices of $24.67 (($225/$24.67) x 100 = 912.04 percent).
Therefore, we believe BrainScope TBI meets the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). Given that there are no device-related costs in the APC
payment amount, and the BrainScope TBI has an estimated average
reasonable cost of $225, we believe that the BrainScope TBI 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 $225 for BrainScope TBI and the portion of the APC
payment amount for the device of $0.00 exceeds the APC payment amount
for the related service of $225 by 912.04 percent ((($225-$0.00)/
$24.67) x 100 = 912.04 percent). Therefore, we believe that the
BrainScope TBI meets the third cost significance requirement.
We are inviting public comment on whether the BrainScope TBI meets
the device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
(2) NavSlim\TM\ and NavPencil
Elucent Medical, Inc. submitted an application for a new device
category
[[Page 44592]]
for transitional pass-through payment status for CY 2023 for the
NavSlim\TM\ and NavPencil (referred to collectively as ``the
Navigators''). The applicant described the Navigators as single-use
(disposable) devices for real-time, stereotactic, 3D navigation for the
excision of pre-defined soft tissue specimens.
According to the FDA 510(k) Summary (K183400) provided by the
applicant,\34\ the Navigators are a component of the applicant's
EnVisio\TM\ Navigation System \35\ which is intended only for the non-
imaging detection and localization (by navigation) of a SmartClip\TM\
Soft Tissue Marker (SmartClip\TM\) that has been implanted in a soft
tissue biopsy site or a soft tissue site intended for surgical
removal.\36\ We note that the applicant submitted a separate
application for pass-through payment status for the SmartClip\TM\ for
CY 2023, as discussed in a subsequent section. The applicant explained
that the sterile, single-use Navigators affix to an electrocautery
(surgical cutting) tool and, in combination with the other EnVisio\TM\
Navigation System components and the SmartClip\TM\, provide real-time
intraoperative 3D navigation to the tumor and margin. The applicant
explained that, at the time of surgical intervention, electromagnetic
waves delivered by the EnVisio\TM\ Navigation System activate the
implanted SmartClip\TM\ within a 50cm x 50cm x 35cm volume. The
applicant further explained that the SmartClip\TM\ contains an
application-specific integrated circuit (ASIC) which is activated at a
specific frequency and communicates to the EnVisio\TM\ Navigation
System the precise, real-time location of both the SmartClip\TM\ and
the surgical margin, enabling the surgeon to plan the specimen (tumor
and margin) for excision. The applicant asserted that this data is
calibrated relative to the tip of the electrocautery device or other
operating instrument and is displayed in 3D. According to the
applicant, the Navigators enable intraoperative visualization by
displaying real-time stereotactic 3D guidance from the tip of the
surgical tool enabling minimally invasive removal of pre-defined tissue
specimen (tumor and margin). The applicant stated that surgeons are
able to visualize the directional distances to make excisional plane of
each margin in-situ without using conventional imaging (e.g.,
ultrasound).
---------------------------------------------------------------------------
\34\ As explained later in this section, the applicant received
FDA 510(k) clearance for the EnVisio\TM\ Navigation System, which
includes the Navigators.
\35\ The FDA 510(k) Summary for the EnVisio\TM\ Navigation
System states that the EnVisio\TM\ Navigation System ``equipment
components'' are the Console, Heads Up Display, Patient Pad and Foot
Pedal. The Navigator is listed as a separate, sterile, non-patient
contacting, single-use system component. The applicant submitted an
application for pass-through payment status only for the Navigator
component of the EnVisio\TM\ Navigation System.
\36\ The SmartClip\TM\ has a separate FDA 510(k) clearance.
Based on the FDA 510(k) Summary for the EnVisio\TM\ Navigation
System, the SmartClip\TM\ does not appear to be part of the
EnVisio\TM\ Navigation System.
---------------------------------------------------------------------------
The applicant stated that there are two types of Navigators: (1)
the NavSlim\TM\ (which the applicant described as a lightweight model
that allows integration with a broader range of electrosurgical tools,
with or without smoke evacuation); and (2) the NavPencil (which,
according to the applicant, incorporates a small screen in the surgical
sightline that mimics the EnVisio\TM\ Navigation System operating room
monitor). The applicant also asserted that the integration of the
Navigators with the single use, sterile electrocautery tool enables a
single, light weight tool that can be utilized in situ for a minimally
invasive surgery without infection risk. According to the applicant,
the Navigators reduce the risk of tumor microenvironment caused by
tissue disruption of non-targeted tissue. The applicant stated that the
patient populations that can benefit from this technology are those
that have biopsy proven cancers in organs that lack anatomic landmarks
like breast, abdomen, and head and neck.
The applicant stated that the Navigators are the first devices to
provide precise real-time navigation with a large patient volume of
50cm x 50cm x 35cm (per the applicant, encompassing >99 percent of
breast cancer patient habitus and >90 percent of lung cancer patient
habitus). In addition, the applicant asserted several other clinically
differentiating features from prior products. First, the applicant
stated that the Navigators process 240 simultaneous data streams
solving for location 16 times per second with millimeter level of
accuracy, and display it to the surgeon based upon actual location of
the defined lesion as it is manipulated in situ, not based on imaging
that occurred days or weeks before. The applicant asserted that as the
tissue is moved or manipulated during a surgical intervention, the
location is instantaneously updated. According to the applicant, this
allows for intelligent, real-time, intraoperative visualization and
guidance for the surgeon, enabling precise removal of a defined tissue
specimen (including tumor and margin). Furthermore, the applicant
asserted that the accurate and real-time wireless location eliminates
any potential registration errors that are typically found in devices
that use pre-procedure imaging for guidance. The applicant explained
that no static pre-procedure imaging is necessary eliminating the
potential of mis-registration due to patient or tissue movement. In
addition, the applicant stated that the Navigators provide 3D
guidance--medial/lateral, inferior/superior and anterior/posterior, as
well as the most direct path, and asserted that this is increasingly
important in treating lobular and deep tumors. The applicant also
claimed that because the guidance is from the tip of the cutting tool,
exact measurements can be taken in situ at the exact cutting location.
In addition, per the applicant, the Navigators allow for an oncoplastic
\37\ approach--the applicant stated that because the location is not
tethered or constrained in any way, the surgeon can choose the best
cutting approach to achieve the optimal oncoplastic outcome. Finally,
the applicant added that the Navigators provide the ability to
distinctly identify and navigate up to three separate lesions in the
same patient.
---------------------------------------------------------------------------
\37\ According to Columbia University Irving Medical Center,
oncoplastic breast surgery combines the techniques of traditional
breast cancer surgery with the cosmetic advantages of plastic
surgery. https://columbiasurgery.org/conditions-and-treatments/oncoplastic-breast-surgery.
---------------------------------------------------------------------------
With respect to the newness criterion at Sec. 419.66(b)(1), on
March 22, 2019, the applicant received 510(k) clearance from FDA to
market the EnVisio\TM\ Navigation System (which, as explained
previously, includes the Navigators) for the non-imaging detection and
localization (by navigation) of a SmartClip\TM\ that has been implanted
in a soft tissue biopsy site or a soft tissue site intended for
surgical removal. The applicant submitted its application for
consideration as a new device category for transitional pass-through
payment status for the Navigators on February 28, 2022, which is within
3 years of the date of the initial FDA marketing authorization. We are
inviting public comments on whether the Navigators meet the newness
criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Navigators are an integral part of the
service furnished and are used for one patient only. However, the
applicant did not specifically indicate whether the Navigators come in
contact with human tissue, and are surgically implanted or inserted or
applied in or on a wound or other skin lesion, as
[[Page 44593]]
required at Sec. 419.66(b)(3).\38\ The FDA 510(k) Summary (K183400)
states that the Navigator is a sterile, non-patient contacting, single-
use device. We would welcome comments on whether the Navigators meet
the requirements of Sec. 419.66(b)(3). The applicant also did not
indicate whether the Navigators meet the device eligibility
requirements at Sec. 419.66(b)(4), which provide that the device may
not be any of the following: (1) equipment, an instrument, apparatus,
implement, or item of this type for which depreciation and financing
expenses are recovered as depreciable assets; or (2) a material or
supply furnished incident to a service (for example, a suture,
customized surgical kit, or clip, other than radiological site marker).
We are inviting public comments on whether the Navigators meet the
eligibility criteria at Sec. 419.66(b).
---------------------------------------------------------------------------
\38\ By contrast, the SmartClip\TM\, discussed in the next
section of this preamble, is inserted into human tissue.
---------------------------------------------------------------------------
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 it was not aware of an existing pass-through
payment category that describes the Navigators, and listed an existing
device category that it considered for comparison to the Navigators--
specifically, HCPCS code C1748 (Endoscope, single-use (i.e.,
disposable), upper GI, imaging/illumination device (insertable)). The
applicant stated that the Navigators are designed to meet the demands
within the clinical environment for a single-use (i.e., disposable)
device to decrease infection rate, similar to the recent advancements
of ``disposable'' endoscopes to address clinical demands for single-use
to eliminate risks of cross contamination and improper sterilization.
HCPCS code C1748 is a current pass-through payment category, effective
beginning July 1, 2020. The applicant did not specifically
differentiate the Navigators from devices in HCPCS code C1748. Upon
review, it does not appear that there are any existing pass-through
payment categories that might apply to the Navigators. We are inviting
public comments on whether the Navigators meet the device category
criterion.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The applicant claimed that the use of
the Navigators results in substantial clinical improvement over
existing technologies by (1) reducing positive margin and re-excision
rates, thereby decreasing the rate of subsequent therapeutic
interventions; (2) reducing the rate of device-related complications,
including surgical site infections and wire migration and transection;
and (3) improving the surgical approach (surgeons are not tethered to
the best radiological approach, and the incision can be placed in the
ideal location resulting in better oncoplastic results, less complex
path to the lesion, and better visualization during surgery). The
applicant provided articles and case reports for the purpose of
addressing the substantial clinical improvement criterion.
In support of the claim that use of the Navigators reduces positive
margin and re-excision rates, the applicant submitted an abstract of a
study performed to assess the impact of electromagnetic seed
localization (ESL) using the EnVisio\TM\ Navigation System and
SmartClip\TM\ compared to wire localization (WL) on operative times,
specimen volumes, margin positivity, and margin re-excision rates.\39\
Between August 2020 and August 2021, 97 patients underwent excisional
biopsy (n=20), or lumpectomy with (n=53) or without (n=24) sentinel
lymph node biopsy (SLNB) using ESL guidance at a single institution by
5 surgeons. The study authors matched these patients, one-to-one, with
WL patients undergoing surgery between 2006 and 2021 based on surgeon,
procedure type with stratification for those having and not having
nodal procedures, and pathologic stage or benign pathology. When
greater than one WL match was found, selection was randomized. The
authors compared continuous variables (operative times, specimen
volumes, excess volume excised) between patients undergoing ESL and WL
using Wilcoxon rank sums tests. The authors compared categorical
variables (positive margin rates, re-excision rates) using Fisher's
exact tests. Median operative time for ESL versus WL for lumpectomy
with SLNB was 66 versus 69 minutes (p=0.76) and without SLNB was 40
versus 34.5 minutes (p=0.17). Median specimen volume was 55cm\3\ with
WL versus 36cm\3\ with ESL (p=0.0012). In those with measurable tumor
volume, excess tissue excised was larger with WL compared to ESL
(median=73.2cm\3\ versus 52.5cm\3\, p=0.017). Main segment margins were
positive in 18 of 97 (19 percent) WL patients compared to 10 of 97 (10
percent) ESL patients (p=0.17). In the WL group, 13 of 97 (13 percent)
had margin re-excision at a separate procedure, compared to 6 of 97 (6
percent) in the ESL group, (p=0.15). The authors concluded that ESL is
superior to WL because it provided more accurate localization,
evidenced by smaller specimen volume with less excess tissue excised,
despite similar operative times. In addition, the authors reported
that, although not statistically significant, ESL resulted in lower
positive margin rates and lower margin re-excision rates compared to
WL. The authors further noted that ESL allows for preoperative
localization, eliminating same day operative delays, and single tool 3D
localization. The authors concluded that further studies comparing ESL
to other non-wire localization techniques are required to refine which
localization technology is most advantageous in breast conservation
surgery.
---------------------------------------------------------------------------
\39\ Jordan R, Rivera-Sanchez L, Kelley K, O'Brien M, et al. The
Impact of an Electromagnetic Seed Localization Device as Versus Wire
Localization on Breast Conserving Surgery: A Matched Pair Analysis.
Abstract presented at: 23rd Annual Meeting of The American Society
of Breast Surgeons; April 6-10, 2022. https://www.breastsurgeons.org/meeting/2022/docs/2022_Official_Proceedings_ASBrS.pdf.
---------------------------------------------------------------------------
The applicant provided a second article consisting of a clinical
paper from the Moffitt Cancer Center that, per the applicant, is
pending publication.\40\ The paper presented three cases from the
Moffitt Cancer Center, including radiographic and other images,
employing three different methods of breast mass localization: (1)
SmartClip\TM\, (2) SAVI SCOUT[supreg] radar reflector localizer, and
(3) traditional wire localizer. The authors stated that the purpose of
the paper was to educate
[[Page 44594]]
the audience about the technological advances regarding breast mass
localization and to discuss the advantages and disadvantages of
SmartClip\TM\ localizers, SAVI SCOUT[supreg] localizers, and wire
localizers.
---------------------------------------------------------------------------
\40\ Ibanez J, Wotherspoon T, Mooney B, Advances in Image Guided
Breast Mass Localization Techniques (undated). Submitted by the
applicant with its application on February 28, 2022.
---------------------------------------------------------------------------
The authors first discussed wire localization, stating that wire
localization involves image-guided insertion of a guidewire into a
targeted mass and that the use of multiple wires allows for bracketing
of multiple lesions or a large lesion. The authors asserted that, while
effective in localization, this procedure has drawbacks such as wire
breakage, patient discomfort, wire migration while moving or
transporting the patient, and the need to surgically remove the wire
the same day that it is placed due to this risk of migration.
The authors also discussed radar reflector localizers such as SAVI
SCOUT[supreg], which are small devices that can be placed into a
targeted mass at any time prior to lumpectomy. The authors explained
that once a surgeon gains a general idea of the mass' location by
looking at the post localizer placement mammogram, this localizer is
``hunted'' for intraoperatively using a special handheld device which
provides auditory feedback, but does not provide location details until
it is found via the auditory feedback. The authors cited a
retrospective study at the Moffitt Cancer Center which, according to
the authors, indicated that localization using SAVI SCOUT[supreg] was
successful for 125 out of 129 patients (97 percent, 95 percent
Confidence Interval 92-99 percent) and showed that in comparison to
wire localization, SAVI SCOUT[supreg] provides improved patient comfort
and eliminates the need to perform the surgery on the same day as the
localization procedure.\41\
---------------------------------------------------------------------------
\41\ Falcon S, Weinfurtner RJ, Mooney B, Niell BL. SAVI
SCOUT[supreg] localization of breast lesions as a practical
alternative to wires: Outcomes and suggestions for trouble-shooting.
Clin Imaging. 2018 Nov-Dec;52:280-286. doi: 10.1016/
j.clinimag.2018.07.008. Epub 2018 Jul 24. PMID: 30193186.
---------------------------------------------------------------------------
Finally, the authors discussed localization using the
SmartClip\TM\. The authors noted that the SmartClip\TM\ is the first
device to provide three-plane localization information. The authors
stated that a monitor displays the approximate position of the
SmartClip\TM\ allowing everyone in the operating room to assist with
the localization of the SmartClip\TM\ and provide knowledge of its
location prior to and throughout the surgery. They further noted that
the SmartClip\TM\ localizer can be visualized on a small screen mounted
on the electrocautery tool which, similar to the monitor, depicts the
direction and depth to the SmartClip\TM\. According to the authors,
this provides real-time visual feedback to surgeons as the
electrocautery tool moves and allows them to find the clip without
having to look up at the operating room monitor. The authors asserted
that the three-axis visualization eliminated the need to search for the
clip since the location is always known, and that the availability of
the SmartClip\TM\ in three colors with different signals eases
differentiation between localizers and allows for bracketing of masses.
The authors concluded that wire localization has drawbacks such as
wire breakage, patient discomfort, high chances of migration, and
narrow placement timeframes, which have been mitigated over the past
decade by various soft tissue localizers such as SAVI SCOUT[supreg]
(radar reflector localizer). The authors concluded that the
SmartClip\TM\, which they refer to as a new localizer, may potentially
resolve other difficulties encountered with the soft tissue localizers
that they currently use. Finally, the authors noted that a clinical
study is currently underway at the Moffitt Cancer Center to evaluate
the advantages of using the SmartClip\TM\ in clinical practice.
In addition, the applicant provided two physician case reports,
each describing the use of the EnVisio\TM\ Navigation System and
SmartClip\TM\ in a single patient (62 and 59-year-old female breast
cancer patients). Each case report described the patient's history,
diagnostic tools utilized, pre-operative, peri-operative, and/or post-
operative course, pathology results, as well as the physician's
perceptions of the SmartClip\TM\ or EnVisio\TM\ Navigation System. In
the first surgical case report,\42\ the surgeon noted that the foot
pedal activation of the EnVisio\TM\ Navigation System allowed toggling
between two SmartClip\TM\ devices, allowing complete dissection around
the periphery of the mass to obtain a precise margin. The surgeon
asserted that with one marker, there would have been a higher risk of a
positive margin. In the second surgical case report,\43\ the surgeon
similarly noted that the EnVisio\TM\ Navigation System helped her to
map out and be more precise in her incision location and lumpectomy
dissection.
---------------------------------------------------------------------------
\42\ Kruper, Laura, Bracketing Lobulated Breast Lesion with the
EnVisio\TM\ Navigation System using Differentiated SmartClip.
\43\ Henkel, Dana, Single SmartClip Case.
---------------------------------------------------------------------------
The applicant also submitted several articles in general support of
its application, which we summarize as follows. An article from the
Mayo Clinic concluded that intraoperative pathologic assessment with
frozen-section margin evaluation of all neoplastic breast specimens
allows for immediate re-excision of positive or close margins during
the initial operation and results in an extremely low reoperation rate
of <2%.\44\ Another article addressed the relationship between post-
surgery infection and breast cancer recurrence and concluded that there
is association between surgical site infection and adverse cancer
outcomes, but the cellular link between them remains elusive.\45\
Furthermore, a study from the Mayo Clinic concluded there was no
reduction in the surgical site infection rate among patients who
received postoperative antibiotic prophylaxis after breast surgery.\46\
In addition, a study from Washington University School of Medicine
concluded that surgical site infection (SSI) after breast cancer
surgical procedures was more common than expected for clean surgery and
more common than SSI after non-cancer-related breast surgical
procedures.\47\ A review article from the Department of Radiation
Oncology, Case Western Reserve University and University Hospitals in
Cleveland surmised that precision medicine holds the promise of truly
personalized treatment which provides every individual breast cancer
patient with the most appropriate diagnostics and targeted therapies
based on the specific cancer's genetic profile as determined by a panel
of gene assays and other
---------------------------------------------------------------------------
\44\ Racz JM, Glasgow AE, Keeney GL, Degnim AC, Hieken TJ, Jakub
JW, Cheville JC, Habermann EB, Boughey JC. Intraoperative Pathologic
Margin Analysis and Re-Excision to Minimize Reoperation for Patients
Undergoing Breast-Conserving Surgery. Ann Surg Oncol. 2020
Dec;27(13):5303-5311. doi: 10.1 245/s10434-020-08785-z. Epub 2020
Jul 4. PMID: 32623609.
\45\ O'Connor R[Iacute], Kiely PA, Dunne CP. The relationship
between post-surgery infection and breast cancer recurrence. J Hosp
Infect. 2020 Nov;106(3):522-535. doi: 10.1016/j.jhin.2020.08.004.
Epub 2020 Aug 13. PMID: 32800825.
\46\ Throckmorton AD, Boughey JC, Boostrom SY, Holifield AC,
Stobbs MM, Hoskin T, Baddour LM, Degnim AC. Postoperative
prophylactic antibiotics and surgical site infection rates in breast
surgery patients. Ann Surg Oncol. 2009 Sep;16(9):2464-9. doi:
10.1245/s10434-009-0542-1. Epub 2009 Jun 9. PMID: 19506959.
\47\ Olsen MA, Chu-Ongsakul S, Brandt KE, Dietz JR, Mayfield J,
Fraser VJ. Hospital-associated costs due to surgical site infection
after breast surgery. Arch Surg. 2008 Jan;143(1):53-60; discussion
61. doi: 10.1001/archsurg.2007.11. PMID: 18209153.
---------------------------------------------------------------------------
[[Page 44595]]
predictive and prognostic tests.\48\ An abstract on the subject of
prognostic factors for surgical margin status and recurrence in partial
nephrectomy concluded that (1) surgical margin positivity after partial
nephrectomy is not significantly associated with tumor characteristics
and anatomical scoring systems, (2) surgical indication for partial
nephrectomy has a direct influence on positive surgical margin rates,
and (3) tumor size and stage after partial nephrectomy are valuable
parameters in evaluating the recurrence risk.\49\ Lastly, a study
examining the significance of resection margin in hepatectomy for
hepatocellular carcinoma concluded that the width of the resection
margin did not influence the postoperative recurrence rates after
hepatectomy for hepatocellular carcinoma.\50\
---------------------------------------------------------------------------
\48\ Eleanor E. R. Harris, ``Precision Medicine for Breast
Cancer: The Paths to Truly Individualized Diagnosis and Treatment'',
International Journal of Breast Cancer, vol. 2018, Article ID
4809183, 8 pages, 2018. https://doi.org/10.1155/2018/4809183.
\49\ Demirel HC, [Ccedil]akmak S, Yavuzsan AH, Ye[scedil]ildal
C, T[uuml]rk S, Dalk[inodot]l[inodot]n[ccedil] A,
Kire[ccedil][ccedil]i SL, Toku[ccedil] E, Horasanl[inodot] K.
Prognostic factors for surgical margin status and recurrence in
partial nephrectomy. Int J Clin Pract. 2020 Oct;74(10):e13587. doi:
10.1111/ijcp.13587. Epub 2020 Jul 14. PMID: 32558097.
\50\ Poon, R.T., Fan, S.T., Ng, I O., & Wong, J. (2000).
Significance of resection margin in hepatectomy for hepatocellular
carcinoma: A critical reappraisal. Annals of surgery, 231(4), 544-
551. https://doi.org/10.1097/00000658-200004000-00014.
---------------------------------------------------------------------------
Based on the evidence submitted with the application, we note the
following concerns. The first study appears to be unpublished, and it
is not clear whether it has been submitted for publication in a peer-
reviewed journal. In addition, the study involved a sample of 97
patients from one institution and appears to be written as a
feasibility study for a potentially larger randomized control trial.
Notably, the authors of this study stated that further studies are
required to compare ESL to other non-wire localization techniques to
refine which localization technology is most advantageous in breast
conservation surgery. Furthermore, the authors did not report the sex
or age of the study participants. Additionally, the authors reported
that the differences in positive margin and re-excision rates between
ESL and WL groups were not statistically significant. We also note a
potential concern regarding practice/selection effects bias inherent in
the methodology presented.
The second article is an undated,\51\ unpublished descriptive
clinical paper comparing three different breast mass localization
techniques in three cases from one institution. The applicant stated
that this paper is pending publication, but provided no further details
regarding the status of the paper. The paper did not systematically
compare the techniques across any measurable variables, noting that a
clinical study was underway at the institution to evaluate the
SmartClip\TM\ in clinical practice. Similarly, we note that the
physician case reports were solely descriptive in nature--they
presented each physician's anecdotal experience using the EnVisio\TM\
Navigation System and SmartClip\TM\. Furthermore, the applicant
provided several additional articles that, while informative, did not
involve the Navigators and do not appear to directly support the
applicant's claim of substantial clinical improvement. We would welcome
additional information and evidence from larger, multi-center studies
that provide comparative outcomes between the Navigators and existing
technologies.
---------------------------------------------------------------------------
\51\ Although the applicant reported the date of the study as
January 2021, the copy of the study provided by the applicant was
not dated.
---------------------------------------------------------------------------
We further note that none of the articles and case reports provided
conclusive evidence that the use of the Navigators reduces surgical
site infection rates or the risk of tissue marker migration, as claimed
by the applicant. In addition, the articles and case reports provided
by the applicant described the use of the subject devices only in
breast cancer surgery cases. As reported by the applicant, the
Navigators can also be used for patients that have biopsy proven
cancers in other organs that lack anatomic landmarks like the abdomen
and head and neck. We would welcome additional evidence of substantial
clinical improvement in cases related to non-breast cancer related
procedures.
We are inviting public comments on whether the Navigators meet the
substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the Navigators are
used in surgical interventions described by the HCPCS codes listed in
Table 34.
[[Page 44596]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.040
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. 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. For our calculations, we used APC
5072--Level 2 Excision/Biopsy/Incision and Drainage, which had a CY
2021 payment rate of $1,407 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
22902 had a device offset amount of $1.13 at the time the application
was received. According to the applicant, the cost of the Navigators is
$499.
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 $499 for the Navigators is 35.5 percent of
the applicable APC payment amount for the service related to the
category of devices of $1,407 (($499/$1,407) x 100 = 35.5 percent).
Therefore, we believe the Navigators meet the first cost significance
requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of 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 $499 for the
Navigators is 44,159.3 percent of the cost of the device-related
portion of the APC payment amount for the related service of $1.13
(($499/$1.13) x 100 = 44,159.3 percent). Therefore, we believe that the
Navigators meet 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 $499 for the Navigators and the portion of the APC
payment amount for the device of $1.13 is 35.4 percent of the APC
payment amount for the related service of $1,407 ((($499-$1.13)/$1,407)
x 100 = 35.4 percent). Therefore, we believe that the Navigators meet
the third cost significance requirement.
We are inviting public comment on whether the Navigators meet the
device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
(3) SmartClip\TM\
Elucent Medical, Inc. submitted an application for a new device
category for transitional pass-through payment status for CY 2023 for
the SmartClip\TM\ Soft Tissue Marker (SmartClip\TM\). The applicant
described the SmartClip\TM\ as an electromagnetically activated,
single-use, sterile soft tissue marker used for anatomical surgical
guidance. According to the applicant, the SmartClip\TM\ is the only
soft tissue marker that delivers independent coordinates of location
when used in conjunction with the applicant's EnVisio\TM\ Navigation
System (which includes the Navigators discussed
[[Page 44597]]
previously in this proposed rule). Per the applicant, at the time of
surgical intervention, electromagnetic waves delivered by the
EnVisio\TM\ Navigation System activate the implanted SmartClip\TM\
within a 50cm x 50cm x 35cm volume. The applicant further explained
that the SmartClip\TM\ contains an application-specific integrated
circuit (ASIC), customized for use with the EnVisio\TM\ Navigation
System, which is activated at a specific frequency and communicates to
the EnVisio\TM\ Navigation System the precise, real-time location of
both the SmartClip\TM\ and the surgical margin, enabling the surgeon to
plan the specimen (tumor and margin) for excision.\52\ The applicant
asserted that this data is calibrated relative to the tip of the
electrocautery device or other operating instrument and is displayed in
3D.
---------------------------------------------------------------------------
\52\ Based on the FDA 510(k) Summary for the EnVisio\TM\
Navigation System, the SmartClip\TM\ does not appear to be a
component of the EnVisio\TM\ Navigation System; the SmartClip\TM\
has a separate FDA 510(k) clearance as discussed later in this
section.
---------------------------------------------------------------------------
The applicant stated that the SmartClip\TM\ is assembled into a
hermetically sealed, Parylene C coated glass cylinder and provided pre-
loaded into a 15-gauge introducer needle available in various lengths
(5cm, 7.5cm, 10cm). Per the applicant, using the introducer needle, the
SmartClip\TM\ is implanted directly into a tumor at the time of biopsy
or during a separate procedure in advance of surgery. According to the
FDA 510(k) Summary (K180640), the SmartClip\TM\ can be implanted into
various types of soft tissue, such as lung, gastrointestinal system,
and breast, and can subsequently be detected using the EnVisio\TM\
Navigation System or by means of radiography (including mammographic
imaging), ultrasound, and magnetic resonance imaging (MRI). Per the
applicant, it is utilized frequently in breast conserving surgery,
lymph nodes, and head/neck cancers.
According to the applicant, up to three SmartClips\TM\, each with a
unique electromagnetic signature, can be implanted in a patient to mark
and provide continuous location of multiple targets (for example, 3
lesions, or 2 lesions/1 lymph node) or to bracket either a large lesion
or microcalcifications. The applicant claimed that the SmartClip\TM\
enables the surgeon to choose the safest, least disfiguring
(oncoplastic) approach and path to the tumor before the surgery.
According to the applicant, providing surgical planning and excision
lessens the impact of the disruption of non-targeted tissue. In
addition, the applicant stated that the SmartClip\TM\ enables the
surgeon to measure and record specimen size post excision.
The applicant further asserted that the SmartClip\TM\ is a
significantly advanced version of an interstitial implant device, such
as a gold fiducial marker, that is placed into a tumor directly to
guide the surgeon to the location of a malignant lesion. The applicant
claimed that the SmartClip\TM\ has characteristics that differentiate
it from conventional fiducial markers. First, the applicant stated that
the SmartClip\TM\ location is expressed relative to the patient's
position--medial/lateral, inferior/superior, anterior/posterior with
2mm precision. Second, according to the applicant, the SmartClip\TM\
location is instantaneous and updated 16 times per second reflecting
any location change due to tissue manipulation and allowing alterations
in the patient's position with no compromise in accuracy. Furthermore,
the applicant asserted that the SmartClip\TM\ provides seamless, real-
time navigation, maintaining the 3D position of the lesion within the
surgical space and relative to the surgical tools. The applicant added
that the SmartClip\TM\ is not subject to registration errors often seen
with navigation that utilizes pre-procedure imaging for guidance.
Furthermore, the applicant asserted that the SmartClip\TM\ is ideal for
minimally invasive procedures in that it does not require line of
sight. The applicant also stated that the SmartClip\TM\ does not
utilize any radioactive materials or contain any ionizing radiation.
Per the applicant, the SmartClip\TM\ does not require a separate
imaging modality, however, if another imaging modality is utilized, the
SmartClip\TM\ is radiopaque. Finally, the applicant stated that the
SmartClip\TM\ provides the following advantages compared to current
localization methods (including preoperative wire localization): (1) no
migration of the SmartClip\TM\; (2) no depth limitation, addressing
broader patient population clinical needs; (3) no limitations on
clinical approach for placement or surgical excision; (4) permanently
implantable, should continuum of care change; (5) no risks for
multifocal or extensive lesion markings for complex cases; (6) no
required workflow changes for varied surgical tools; (7) can be placed
remote from surgery (days or weeks) at the patient's convenience; (8)
nothing protruding from the skin so there is no mechanical pathway for
bacterial contamination; and (9) puncture is healed at the time of
surgery.
With respect to the newness criterion at Sec. 419.66(b)(1), on
June 4, 2018, the applicant received 510(k) clearance from FDA to
market the SmartClip\TM\ for radiographic marking of sites in soft
tissue and in situations where the soft tissue site needs to be marked
for future medical procedures. The applicant submitted its application
for consideration as a new device category for transitional pass-
through payment status for the SmartClip\TM\ on February 28, 2022,
which is more than 3 years from the date of the initial FDA marketing
authorization. We note that in accordance with 42 CFR 419.66(b)(1), the
pass-through payment application for a medical device must be submitted
within 3 years from the date of the initial FDA approval or clearance,
unless there is a documented, verifiable delay in U.S. market
availability after FDA approval or clearance is granted, in which case
we will consider the pass-through payment application if it is
submitted within 3 years from the date of market availability. The
applicant asserted that the SmartClip\TM\ could not be marketed until
May 2019 because it is utilized in conjunction with the EnVisio\TM\
Navigation System and FDA clearance for the EnVisio\TM\ Navigation
System was required prior to use of the SmartClip\TM\ (as mentioned
previously, the applicant received FDA clearance for the EnVisio\TM\
Navigation System on March 22, 2019). We note that, according to the
FDA 510(k) Summary and Indications for Use for the SmartClip\TM\
(K180640) and the EnVisio\TM\ Navigation System (K183400), the
SmartClip\TM\ also can be located and surgically removed through the
use of imaging guidance such as x-ray, mammography, ultrasound, and
MRI. According to the applicant, the EnVisio\TM\ Navigation System
enables the SmartClip\TM\ as an intelligent interstitial soft tissue
marker utilizing electromagnetic waves to display precise coordinates
in each of three planes. The applicant further asserted that the
SmartClip\TM\ was designed to provide the surgeon the precise
coordinates for target tissue removal and that this function requires
the utilization of the electronic field generated by the EnVisio\TM\
Navigation System. The applicant noted that while the SmartClip\TM\ is
visible and can be located using imaging guidance (such as ultrasound,
MRI, or radiography), such imaging guidance would typically only be
used in the removal of the targeted tissue should the SmartClip\TM\
ASIC fault, so as to ensure patient care is not compromised. The
applicant further stated that it did not consider pursuing
[[Page 44598]]
marketability of the SmartClip\TM\ as an unintelligent interstitial
marker as the applicant believed that the action would not have
resulted in meeting the unmet healthcare need for substantial clinical
improvements. In addition, the applicant claimed that due to the impact
of the COVID-19 pandemic, ambulatory surgical centers and outpatient
facilities were restricted in performing breast cancer surgery,
resulting in a verifiable delay. The applicant requested that CMS
utilize the FDA clearance date for the EnVisio\TM\ Navigation System
(March 22, 2019) as the applicable date for the SmartClip\TM\'s initial
marketability. We are inviting public comments on whether the
SmartClip\TM\ meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the SmartClip\TM\ 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. The
applicant did not indicate whether the SmartClip\TM\ meets the device
eligibility requirements of Sec. 419.66(b)(4), which provide that the
device may not be any of the following: (1) equipment, an instrument,
apparatus, implement, or item of this type for which depreciation and
financing expenses are recovered as depreciable assets; or (2) a
material or supply furnished incident to a service (for example, a
suture, customized surgical kit, or clip, other than radiological site
marker). We are inviting public comments on whether the SmartClip\TM\
meets the eligibility criteria at Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. The
applicant stated that it was not aware of an existing pass-through
payment category that describes the SmartClip\TM\.
The applicant identified three devices or device categories that it
believes are most closely related to the SmartClip\TM\: (1) hook-wire
systems (the applicant did not provide an associated code, but listed
Kopans (Bard and McKesson) and Dualok (McKesson) as types of such
systems); (2) HCPCS code A4648 (Tissue marker, implantable, any type,
each); and (3) HCPCS code 91112 (Gastrointestinal transit and pressure
measurement, stomach through colon, wireless capsule, with
interpretation and report (Smartpill\TM\)).\53\
---------------------------------------------------------------------------
\53\ HCPCS code 91112 is not a current or previous pass-through
payment category. According to the applicant, the Smartpill\TM\ is
an ingestible pill that is tracked using a wearable device for short
term pH and pressure testing for intestinal tract diagnostics. By
contrast, the applicant noted that the SmartClip\TM\ is permanently
implantable within soft tissue to direct a surgeon for the purposes
of removal of a lesion and margin.
---------------------------------------------------------------------------
Although HCPCS code A4648 is not an existing pass-through payment
category, we note that a previous equivalent code, HCPCS code C1879
(Tissue marker (implantable)), was a pass-through payment category in
effect between August 1, 2000 and December 31, 2002.\54\ Pursuant to
Change Request 8338, CMS deleted temporary HCPCS code C1879 on June 30,
2013, because this category of devices was described by permanent HCPCS
code A4648. We stated in the Change Request that effective July 1,
2013, when using implantable tissue markers with any services provided
in the OPPS, providers should report the use and cost of the
implantable tissue marker with HCPCS code A4648 only.\55\ According to
the applicant, tissue markers described by HCPCS code A4648 are passive
mechanical localization devices. The applicant explained that such
tissue markers are generally made of gold or other radiographically
opaque substances (usually metal). Per the applicant, compared to the
SmartClip\TM\, such tissue markers do not provide margin or 3D
information, do not update in real-time, and require advanced
radiographic capability (computed tomography, fluoroscopy, ultrasound)
in order to be detected and localized. According to the applicant,
these markers are only useful because they are visible either
radiographically or to the naked eye. The applicant identified two
types of gold fiducial markers--generic gold fiducial marker (IZI
Medical) and generic soft tissue gold marker (Civco). The applicant
explained that the SmartClip\TM\ is an advanced interstitial implant
that substantially improves upon both generic gold fiducial markers and
common hook-wire localization systems. According to the applicant,
passive mechanical tissue markers such as gold fiducial markers and
hook-wire systems are related devices created for roughly the same
purpose as the SmartClip\TM\, but neither can be considered an adequate
comparator due to the highly advanced technology embedded in the
SmartClip\TM\. In contrast to both generic gold fiducial markers and
hook-wire systems, the applicant asserted that the SmartClip\TM\
contains an ASIC which is activated at a specific frequency and
provides location information regarding both the SmartClip\TM\ and the
surgical margins to the operating physician in near real-time. The
applicant claimed that it is not aware of any other device that has
this functionality. The applicant added that this data is calibrated
relative to the tip of an electrocautery device or other operating
instrument and is displayed in 3D so that the surgeon has an objective
method of obtaining a negative concentric margin. According to the
applicant, this is particularly useful for posterior and deep margins
for which passive localization devices provide no information. The
applicant asserted that it does not believe that the SmartClip\TM\ is
described by HCPCS code A4648.
---------------------------------------------------------------------------
\54\ Medicare Claims Processing Manual, Ch. 4, section 60.4.2.
\55\ Change Request 8338, June 7, 2013. The Medicare Claims
Processing Manual further defines the devices encompassed by HCPCS
code C1879 as material that is placed in subcutaneous or parenchymal
tissue (may also include bone) for radiopaque identification of an
anatomic site and adds that these markers are distinct from topical
skin markers, which are positioned on the surface of the skin to
serve as anatomical landmarks. Medicare Claims Processing Manual,
Ch. 4, section 60.4.3.
---------------------------------------------------------------------------
We are inviting public comments on whether the SmartClip\TM\ meets
the device category criterion.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA marketing authorization for the indication covered by the
Breakthrough Device designation.
The applicant claimed that the use of the SmartClip\TM\ results in
substantial clinical improvement over existing technologies by, (1)
reducing positive margin and re-excision rates, thereby decreasing the
rate of subsequent therapeutic interventions; (2) reducing the rate of
device-related complications, including surgical site infections and
wire migration and transection; and (3) improving the surgical approach
(surgeons are not tethered to the best radiological approach, and the
incision can be placed in the ideal location resulting in better
oncoplastic results,
[[Page 44599]]
less complex path to the lesion, and better visualization during
surgery). The applicant provided articles and case reports for the
purpose of addressing the substantial clinical improvement criterion.
In support of the claim that use of the SmartClip\TM\ reduces
positive margin and re-excision rates, the applicant submitted an
abstract of a study performed to assess the impact of electromagnetic
seed localization (ESL) using the EnVisio\TM\ Navigation System and
SmartClip\TM\ compared to wire localization (WL) on operative times,
specimen volumes, margin positivity, and margin re-excision rates.\56\
Between August 2020 and August 2021, 97 patients underwent excisional
biopsy (n=20), or lumpectomy with (n=53) or without (n=24) sentinel
lymph node biopsy (SLNB) using ESL guidance at a single institution by
5 surgeons. The study authors matched these patients, one-to-one, with
WL patients undergoing surgery between 2006 and 2021 based on surgeon,
procedure type with stratification for those having and not having
nodal procedures, and pathologic stage or benign pathology. When
greater than one WL match was found, selection was randomized. The
authors compared continuous variables (operative times, specimen
volumes, excess volume excised) between patients undergoing ESL and WL
using Wilcoxon rank sums tests. The authors compared categorical
variables (positive margin rates, re-excision rates) using Fisher's
exact tests. Median operative time for ESL versus WL for lumpectomy
with SLNB was 66 versus 69 minutes (p=0.76) and without SLNB was 40
versus 34.5 minutes (p=0.17). Median specimen volume was 55cm\3\ with
WL versus 36cm\3\ with ESL (p=0.0012). In those with measurable tumor
volume, excess tissue excised was larger with WL compared to ESL
(median=73.2cm\3\ versus 52.5cm\3\, p=0.017). Main segment margins were
positive in 18 of 97 (19 percent) WL patients compared to 10 of 97 (10
percent) ESL patients (p=0.17). In the WL group, 13 of 97 (13 percent)
had margin re-excision at a separate procedure, compared to 6 of 97 (6
percent) in the ESL group, (p=0.15). The authors concluded that ESL is
superior to WL because it provided more accurate localization,
evidenced by smaller specimen volume with less excess tissue excised,
despite similar operative times. In addition, the authors reported
that, although not statistically significant, ESL resulted in lower
positive margin rates and lower margin re-excision rates compared to
WL. The authors further noted that ESL allows for preoperative
localization, eliminating same day operative delays, and single tool,
3D localization. The authors concluded that further studies comparing
ESL to other non-wire localization techniques are required to refine
which localization technology is most advantageous in breast
conservation surgery.
---------------------------------------------------------------------------
\56\ Jordan R, Rivera-Sanchez L, Kelley K, O'Brien M, et al. The
Impact of an Electromagnetic Seed Localization Device as Versus Wire
Localization on Breast Conserving Surgery: A Matched Pair Analysis.
Abstract presented at: 23rd Annual Meeting of The American Society
of Breast Surgeons; April 6-10, 2022. https://www.breastsurgeons.org/meeting/2022/docs/2022_Official_Proceedings_ASBrS.pdf..
---------------------------------------------------------------------------
The applicant provided a second article consisting of a clinical
paper from the Moffitt Cancer Center that, per the applicant, is
pending publication.\57\ The paper presented three cases from the
Moffitt Cancer Center, including radiographic and other images,
employing three different methods of breast mass localization: (1)
SmartClip\TM\, (2) SAVI SCOUT[supreg] radar reflector localizer, and
(3) traditional wire localizer. The authors stated that the purpose of
the paper was to educate the audience about the technological advances
regarding breast mass localization and to discuss the advantages and
disadvantages of SmartClip\TM\ localizers, SAVI SCOUT[supreg]
localizers, and wire localizers.
---------------------------------------------------------------------------
\57\ Ibanez J, Wotherspoon T, Mooney B, Advances in Image Guided
Breast Mass Localization Techniques (undated). Submitted by the
applicant with its application on February 28, 2022.
---------------------------------------------------------------------------
The authors first discussed wire localization, stating that wire
localization involves image-guided insertion of a guidewire into a
targeted mass and that the use of multiple wires allows for bracketing
of multiple lesions or a large lesion. The authors asserted that, while
effective in localization, this procedure has drawbacks such as wire
breakage, patient discomfort, wire migration while moving or
transporting the patient, and the need to surgically remove the wire
the same day that it is placed due to this risk of migration.
The authors also discussed radar reflector localizers such as SAVI
SCOUT[supreg], which are small devices that can be placed into a
targeted mass at any time prior to lumpectomy. The authors explained
that once a surgeon gains a general idea of the mass' location by
looking at the post localizer placement mammogram, this localizer is
``hunted'' for intraoperatively using a special handheld device which
provides auditory feedback, but does not provide location details until
it is found via the auditory feedback. The authors cited a
retrospective study at the Moffitt Cancer Center which, according to
the authors, indicated that localization using SAVI SCOUT [supreg] was
successful for 125 out of 129 patients (97 percent, 95 percent
Confidence Interval 92-99 percent) and showed that in comparison to
wire localization, SAVI SCOUT[supreg] provides improved patient comfort
and eliminates the need to perform the surgery on the same day as the
localization procedure.\58\
---------------------------------------------------------------------------
\58\ Falcon S, Weinfurtner RJ, Mooney B, Niell BL. SAVI
SCOUT[supreg] localization of breast lesions as a practical
alternative to wires: Outcomes and suggestions for trouble-shooting.
Clin Imaging. 2018 Nov-Dec;52:280-286. doi: 10.1016/
j.clinimag.2018.07.008. Epub 2018 Jul 24. PMID: 30193186.
---------------------------------------------------------------------------
Finally, the authors discussed localization using the
SmartClip\TM\. The authors noted that the SmartClip\TM\ is the first
device to provide three-plane localization information. The authors
stated that a monitor displays the approximate position of the
SmartClip\TM\ allowing everyone in the operating room to assist with
the localization of the SmartClip\TM\ and provide knowledge of its
location prior to and throughout the surgery. They further noted that
the SmartClip\TM\ localizer can be visualized on a small screen mounted
on the electrocautery tool which, similar to the monitor, depicts the
direction and depth to the SmartClip\TM\. According to the authors,
this provides real-time visual feedback to surgeons as the
electrocautery tool moves and allows them to find the clip without
having to look up at the operating room monitor. The authors asserted
that the three-axis visualization eliminated the need to search for the
clip since the location is always known, and that the availability of
the SmartClip\TM\ in three colors with different signals eases
differentiation between localizers and allows for bracketing of masses.
The authors concluded that wire localization has drawbacks such as
wire breakage, patient discomfort, high chances of migration, and
narrow placement timeframes, which have been mitigated over the past
decade by various soft tissue localizers such as SAVI SCOUT[supreg]
(radar reflector localizer). The authors concluded that the
SmartClip\TM\, which they refer to as a new localizer, may potentially
resolve other difficulties encountered with the soft tissue localizers
that they currently use. Finally, the authors noted that a clinical
study is currently underway at the Moffitt Cancer Center to evaluate
the advantages of using the SmartClip\TM\ in clinical practice.
[[Page 44600]]
In addition, the applicant provided three physician case reports
(two by surgeons and one by radiologists), each describing the use of
the SmartClip\TM\ in a single patient (62, 59, and 53-year-old female
breast cancer patients). Each case report described the patient's
history, diagnostic tools utilized, pre-operative, peri-operative, and/
or post-operative course, pathology results, as well as the physician's
perceptions of the SmartClip\TM\ or EnVisio\TM\ Navigation System. In
the first surgical case report,\59\ the surgeon noted that the foot
pedal activation of the EnVisio\TM\ Navigation System allowed toggling
between two SmartClip\TM\ devices, allowing complete dissection around
the periphery of the mass to obtain a precise margin. The surgeon
asserted that with one marker, there would have been a higher risk of a
positive margin. In the second surgical case report,\60\ the surgeon
similarly noted that the EnVisio\TM\ Navigation System helped her to
map out and be more precise in her incision location and lumpectomy
dissection. Finally, in the radiologists' case report,\61\ ultrasound
guided SmartClip\TM\ localization was ordered for definitive surgical
management. The radiologists noted the visibility of the SmartClip\TM\
relative to the coil clip, mass, and surrounding tissue, as well as the
ease of the deployment.
---------------------------------------------------------------------------
\59\ Kruper, Laura, Bracketing Lobulated Breast Lesion with the
EnVisio\TM\ Navigation System using Differentiated SmartClip.
\60\ Henkel, Dana, Single SmartClip Case.
\61\ Lee, Marie C., Mooney, Blaise, Right Breast IDC/DCIS.
---------------------------------------------------------------------------
The applicant also submitted several articles in general support of
its application, which we summarize as follows. An article from the
Mayo Clinic concluded that intraoperative pathologic assessment with
frozen-section margin evaluation of all neoplastic breast specimens
allows for immediate re-excision of positive or close margins during
the initial operation and results in an extremely low reoperation rate
of <2 percent.\62\ Another article addressed the relationship between
post-surgery infection and breast cancer recurrence and concluded that
there is association between surgical site infection and adverse cancer
outcomes, but the cellular link between them remains elusive.\63\
Furthermore, a study from the Mayo Clinic concluded there was no
reduction in the surgical site infection rate among patients who
received postoperative antibiotic prophylaxis after breast surgery.\64\
In addition, a study from Washington University School of Medicine
concluded that surgical site infection (SSI) after breast cancer
surgical procedures was more common than expected for clean surgery and
more common than SSI after non-cancer-related breast surgical
procedures.\65\ A review article from the Department of Radiation
Oncology, Case Western Reserve University and University Hospitals in
Cleveland surmised that precision medicine holds the promise of truly
personalized treatment which provides every individual breast cancer
patient with the most appropriate diagnostics and targeted therapies
based on the specific cancer's genetic profile as determined by a panel
of gene assays and other predictive and prognostic tests.\66\ An
abstract on the subject of prognostic factors for surgical margin
status and recurrence in partial nephrectomy concluded that (i)
surgical margin positivity after partial nephrectomy is not
significantly associated with tumor characteristics and anatomical
scoring systems, (ii) surgical indication for partial nephrectomy has a
direct influence on positive surgical margin rates, and (iii) tumor
size and stage after partial nephrectomy are valuable parameters in
evaluating the recurrence risk.\67\ Lastly, a study examining the
significance of resection margin in hepatectomy for hepatocellular
carcinoma concluded that the width of the resection margin did not
influence the postoperative recurrence rates after hepatectomy for
hepatocellular carcinoma.\68\
---------------------------------------------------------------------------
\62\ Racz JM, Glasgow AE, Keeney GL, Degnim AC, Hieken TJ, Jakub
JW, Cheville JC, Habermann EB, Boughey JC. Intraoperative Pathologic
Margin Analysis and Re-Excision to Minimize Reoperation for Patients
Undergoing Breast-Conserving Surgery. Ann Surg Oncol. 2020
Dec;27(13):5303-5311. doi: 10.1245/s10434-020-08785-z. Epub 2020 Jul
4. PMID: 32623609.
\63\ O'Connor R[Iacute], Kiely PA, Dunne CP. The relationship
between post-surgery infection and breast cancer recurrence. J Hosp
Infect. 2020 Nov;106(3):522-535. doi: 10.1016/j.jhin.2020.08.004.
Epub 2020 Aug 13. PMID: 32800825.
\64\ Throckmorton AD, Boughey JC, Boostrom SY, Holifield AC,
Stobbs MM, Hoskin T, Baddour LM, Degnim AC. Postoperative
prophylactic antibiotics and surgical site infection rates in breast
surgery patients. Ann Surg Oncol. 2009 Sep;16(9):2464-9. doi:
10.1245/s10434-009-0542-1. Epub 2009 Jun 9. PMID: 19506959.
\65\ Olsen MA, Chu-Ongsakul S, Brandt KE, Dietz JR, Mayfield J,
Fraser VJ. Hospital-associated costs due to surgical site infection
after breast surgery. Arch Surg. 2008 Jan;143(1):53-60; discussion
61. doi: 10.1001/archsurg.2007.11. PMID: 18209153.
\66\ Eleanor E.R. Harris, ``Precision Medicine for Breast
Cancer: The Paths to Truly Individualized Diagnosis and Treatment'',
International Journal of Breast Cancer, vol. 2018, Article ID
4809183, 8 pages, 2018. https://doi.org/10.1155/2018/4809183.
\67\ Demirel HC, [Ccedil]akmak S, Yavuzsan AH, Ye[scedil]ildal
C, T[uuml]rk S, Dalk[inodot]l[inodot]n[ccedil] A,
Kire[ccedil][ccedil]i SL, Toku[ccedil] E, Horasanl[inodot] K.
Prognostic factors for surgical margin status and recurrence in
partial nephrectomy. Int J Clin Pract. 2020 Oct;74(10):e13587. doi:
10.1111/ijcp.13587. Epub 2020 Jul 14. PMID: 32558097.
\68\ Poon, R.T., Fan, S.T., Ng, I.O., & Wong, J. (2000).
Significance of resection margin in hepatectomy for hepatocellular
carcinoma: A critical reappraisal. Annals of surgery, 231(4), 544-
551. https://doi.org/10.1097/00000658-200004000-00014.
---------------------------------------------------------------------------
Based on the evidence submitted with the application, we note the
following concerns. The first study appears to be unpublished, and it
is not clear whether it has been submitted for publication in a peer-
reviewed journal. In addition, the study involved a sample of 97
patients from one institution and appears to be written as a
feasibility study for a potentially larger randomized control trial.
Notably, the authors of this study stated that further studies are
required to compare ESL to other non-wire localization techniques to
refine which localization technology is most advantageous in breast
conservation surgery. Furthermore, the authors did not report the sex
or age of the study participants. Additionally, the authors reported
that the differences in positive margin and re-excision rates between
ESL and WL groups were not statistically significant. We also note a
potential concern regarding practice/selection effects bias inherent in
the methodology presented.
The second article is an undated,\69\ unpublished descriptive
clinical paper comparing three different breast mass localization
techniques in three cases from one institution. The applicant stated
that this paper is pending publication, but provided no further details
regarding the status of the paper. The paper did not systematically
compare the techniques across any measurable variables, noting that a
clinical study was underway at the institution to evaluate the
SmartClip\TM\ in clinical practice. Similarly, we note that the
physician case reports were solely descriptive in nature--they
presented each physician's anecdotal experience using the EnVisio\TM\
Navigation System and/or SmartClip\TM\. Furthermore, the applicant
provided several additional articles that, while informative, did not
involve the SmartClip\TM\ and do not appear to directly support the
applicant's claim of substantial clinical improvement. We would welcome
additional information and evidence from larger, multi-center studies
that provide comparative outcomes between the SmartClip\TM\ and
existing technologies.
---------------------------------------------------------------------------
\69\ Although the applicant reported the date of the study as
January 2021, the copy of the study provided by the applicant was
not dated.
---------------------------------------------------------------------------
[[Page 44601]]
We further note that none of the articles and case reports provide
conclusive evidence that the use of the SmartClip\TM\ reduces surgical
site infection rates or the risk of tissue marker migration, as claimed
by the applicant. In addition, the articles and case reports provided
by the applicant described the use of the subject devices only in
breast cancer surgery cases. As reported by the applicant, the
SmartClip\TM\ is utilized frequently in breast conserving surgery,
lymph nodes, and head/neck cancers. We would welcome additional
evidence of substantial clinical improvement in cases related to non-
breast cancer related procedures. We are inviting public comments on
whether the SmartClip\TM\ meets the substantial clinical improvement
criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. We note that the applicant stated that up to
three SmartClips\TM\ can be implanted in a patient to mark and provide
continuous location of multiple targets, however, the applicant did not
provide data on the average number of SmartClips\TM\ used per patient.
The applicant stated that the SmartClip\TM\ is used in procedures
described by the HCPCS codes in Table 35.
[GRAPHIC] [TIFF OMITTED] TP26JY22.041
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. 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. For our calculations related to the
SmartClip\TM\, we used APC 5071--Level 1 Excision/Biopsy/Incision and
Drainage, which had a CY 2021 payment rate of $621.97 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 19281 had a device offset amount of $219.87 at
the time the application was received. According to the applicant, the
cost of the SmartClip\TM\ is $375.
Section 419.66(d)(1), the first cost significance requirement,
provides that
[[Page 44602]]
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 $375 for the SmartClip\TM\ is 60.3 percent of the applicable
APC payment amount for the service related to the category of devices
of $621.97 (($375/$621.97) x 100 = 60.3 percent). Therefore, we believe
the SmartClip\TM\ 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 $375 for the
SmartClip\TM\ is 170.6 percent of the cost of the device-related
portion of the APC payment amount for the related service of $219.87
(($375/$219.87) x 100 = 170.6 percent). Therefore, we believe that the
SmartClip\TM\ 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 $375 for the SmartClip\TM\ and the portion of the
APC payment amount for the device of $219.87 is 24.9 percent of the APC
payment amount for the related service of $621.97 ((($375-$219.87)/
$621.97) x 100 = 24.9 percent). Therefore, we believe that the
SmartClip\TM\ meets the third cost significance requirement.
We are inviting public comment on whether the SmartClip\TM\ meets
the device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
(4) Evoke[supreg] Spinal Cord Stimulation (SCS) System
Saluda Medical Inc. submitted an application for a new device
category for transitional pass-through payment status for the
Evoke[supreg] Spinal Cord Stimulation (SCS) System for CY 2023. The
applicant described the Evoke[supreg] SCS System as a rechargeable,
upgradeable, implantable spinal cord stimulation system that provides
closed-loop stimulation controlled by measured evoked compound action
potentials (ECAPs). According to the applicant, the Evoke[supreg] SCS
System is used in the treatment of chronic intractable pain of the
trunk and/or limbs, including unilateral or bilateral pain associated
with the following: failed back surgery syndrome, intractable low back
pain and leg pain. Per the applicant, the Evoke[supreg] SCS System's
rechargeable battery is indicated for use up to 10 years.
The applicant explained that SCS consists of applying an electrical
stimulus to the spinal cord which causes the activated fibers (e.g.,
A[beta]-fibers) to generate action potentials. A[beta]-fibers are the
low-threshold sensory fibers in the dorsal column that contribute to
inhibition of pain signals in the dorsal horn. The action potentials
summed together form the ECAP. Therefore, the applicant asserted that
ECAPs are a direct measure of spinal cord fiber activation that
generates pain inhibition for an individual.
According to the applicant, the Evoke[supreg] SCS System is
comprised of 5 implanted and 12 external components. The applicant
identified the following five implanted components of the Evoke[supreg]
SCS System: (1) Closed Loop Stimulator (CLS): a rechargeable, 25-
channel implantable pulse generator (IPG or stimulator) which generates
an electrical stimulus and measures and records the nerve fibers'
response to stimulus (i.e., ECAPs). Although named ``Closed Loop
Stimulator,'' the applicant indicated that this stimulator delivers
both open-loop and closed-loop stimulation modes; (2) Percutaneous
Leads: Electrical current is delivered to the spinal cord via the
electrodes on leads that are introduced into the epidural space through
an epidural needle and connected to the stimulator. Per the applicant,
ECAPs are measured using two non-stimulating contacts of the leads; (3)
Lead Extension: Used to provide additional length if needed to connect
the implanted lead to the CLS or external closed-loop stimulator
(eCLS); (4) Suture Anchors and Active Anchors: Used to anchor the lead
to the supraspinous ligament or deep fascia; and (5) CLS Port Plug:
Used to block unused ports in the CLS header. Additionally, the
applicant stated there are 12 external components of the Evoke[supreg]
SCS System (e.g., surgical accessories, clinical interface, clinical
system transceiver, pocket console and chargers).
According to the applicant, the Evoke[supreg] SCS System is the
first and only SCS system that provides closed-loop stimulation. In
closed-loop stimulation, the system automatically measures the impact
of the prior stimulation signal on the nerve and adjusts the next
stimulation signal accordingly to maintain the prescribed physiologic
response. Per the applicant, this closed feedback loop provides
consistency in the stimulation received by the nerve as opposed to the
stimulation emitted from the device.
The applicant stated that the Evoke[supreg] SCS System measures
ECAPs and adjusts the next stimulation accordingly as follows: (1) the
Evoke[supreg] SCS System measures ECAPs following every stimulation
pulse from two electrodes not involved in stimulation; (2) the recorded
ECAP signal is sampled by the stimulator and provides a measurement of
the ECAP amplitude; and (3) the Evoke[supreg] SCS System utilizes the
ECAPs in a feedback mechanism to adjust the next stimulation pulse,
thereby delivering closed-loop stimulation. The feedback mechanism
minimizes the difference between the measured ECAP amplitude and the
ECAP amplitude target by automatically adjusting the stimulation
current for every stimulus. In doing so, the applicant asserted it
maintains spinal cord activation near the target level. According to
the applicant, this addresses the challenge all currently available SCS
systems face regarding the ever-changing distance between the electrode
and spinal cord that results in variable spinal cord activation, and
thus, less effective therapy. Per the applicant, although there have
been numerous technological advances in SCS therapy over the years,
every other SCS system on the market provides open-loop stimulation,
where parameters are set by the physician and the patient can only
modulate those parameters within defined limits based upon how they
feel. However, physiological functions such as breathing, heartbeat and
posture changes alter the distance between the spinal cord target
fibers and SCS electrodes. Therefore, the applicant asserted that the
number of nerve fibers activated by open-loop stimulation continually
changes, resulting in inconsistent therapy delivery (i.e., under- or
over-stimulation) and that ECAP-controlled closed-loop therapy produces
a significantly higher degree of spinal cord activation that is
maintained within the therapeutic window which drives superior
outcomes. The applicant asserted that a consistent neural response at
the prescribed level may only be achieved with a closed-loop system
that continually adjusts on every stimulation pulse.
[[Page 44603]]
With respect to the newness criterion at Sec. 419.66(b)(1), on
February 28, 2022, the Evoke[supreg] SCS System received PMA approval
from FDA as an aid in the management of chronic intractable pain of the
trunk and/or limbs including unilateral or bilateral pain associated
with the following: failed back surgery syndrome, intractable low back
pain and leg pain. The applicant submitted its application for
consideration as a new device category for transitional pass-through
payment status for the Evoke[supreg] SCS System on March 1, 2022, which
is within 3 years of the date of the initial FDA marketing
authorization. We are inviting public comment on whether the
Evoke[supreg] SCS System meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the use of the Evoke[supreg] SCS System is
integral to the service of treating and managing chronic intractable
pain of the trunk and/or limbs using spinal cord stimulation. The
applicant noted that some components of the system (described
previously) are implanted in a patient and are in contact with human
tissue. The applicant indicated that all components of the system are
used for one patient only. We note that the external components of the
Evoke[supreg] SCS System (referenced previously) are not implanted in a
patient and do not come in contact with human tissue as required by
Sec. 419.66(b)(3). The applicant did not indicate whether the
Evoke[supreg] SCS System meets the device eligibility requirements of
Sec. 419.66(b)(4) in regard to whether it is an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, or whether it is a supply or material furnished incident to
a service. We note that some of the external components (e.g., surgical
accessories, clinical interface, clinical system transceiver, pocket
console and chargers) noted previously may be considered capital as
specified under Sec. 419.66(b)(4). We are inviting public comments on
whether the Evoke[supreg] SCS System meets the eligibility criteria at
Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion for establishing a device
category, 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 asserted that none of the existing categories
appropriately describe the Evoke[supreg] SCS System. The applicant
provided a list of current and prior device categories for pass-through
payments for other spinal cord stimulation systems (described in Table
36) and explained why each category does not describe the Evoke[supreg]
SCS System. In summary, the applicant asserted that the existing codes
do not adequately describe the Evoke[supreg] SCS System because the
existing codes apply to devices that: provide stimulation to organs
other than the spinal cord (e.g., heart, transvenous sensing and
stimulation, baroreceptors in the carotid artery), only provide open-
loop stimulation, and are non-rechargeable. According to the applicant,
the Evoke[supreg] SCS System is a rechargeable, closed-loop
neurostimulator that provides stimulation to spinal nerves. Upon
review, it does not appear that there are any existing pass-through
payment categories that might apply to the Evoke[supreg] SCS System. We
are inviting public comment on whether Evoke[supreg] SCS System meets
the device category criterion.
BILLING CODE 4120-01-P
[[Page 44604]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.042
BILLING CODE 4120-01-C
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 for the indication covered by the
Breakthrough Device designation. The applicant asserted that the
Evoke[supreg] SCS System represents a substantial clinical improvement
over existing technology because its use of closed-loop stimulation
provides greater improvements in key clinical outcomes over the open-
loop stimulation that is currently used in existing technologies.
Specifically, the applicant stated that the closed-loop stimulation of
the Evoke[supreg] SCS System provides: (1) a greater responder rate in
overall chronic leg and back pain with no increase in baseline pain
medications in comparison to Open-Loop SCS at 3 and 12 months; (2)
greater percentage change in back pain measured by Visual Analog Scale
at 3 and 12 months; (3) greater incidence of 50 percent reduction in
back pain at 3 and 12 months; (4) greater incidence of 50 percent
reduction in leg pain at 12 months; (5) greater incidence of 80 percent
reduction in overall back and leg pain at 12 months; (6) consistently
greater visual improvement in remaining secondary endpoint measures at
3 and 12 months; (7) a balanced safety profile between treatment
groups; (8) a greater percentage of time in the therapeutic window for
closed-loop patients compared to open-loop patients; (9) maintenance of
clinical improvements in pain response and pain reduction at 24 months
post-
[[Page 44605]]
implantation; and (10) the results for the pivotal trial treatment
group have been replicated in another multi-center trial with 12-month
follow-up. With respect to this criterion, the applicant submitted
three articles that supported these ten claims regarding the impact of
the Evoke[supreg] SCS System on the management of chronic intractable
pain of the trunk and/or limbs, including unilateral or bilateral pain
associated with the following: failed back surgery syndrome,
intractable low back pain and leg pain.
The first article provided by the applicant in support of claims 1-
8 was for the Evoke pivotal clinical study, a prospective, multicenter,
double-blind, randomized controlled trial designed to compare the use
of ECAP-controlled, closed-loop stimulation to open-loop stimulation
for the treatment of back and leg pain.\70\ The trial was done at 13
specialist clinics, academic centers, and hospitals in the USA.
Patients with chronic, intractable pain of the back and legs (Visual
Analog Scale [VAS] pain score >=60 mm; Oswestry Disability Index [ODI]
score 41-80) who were refractory to conservative therapy, on stable
pain medications, had no previous experience with spinal cord
stimulation, and were appropriate candidates for a spinal cord
stimulation trial were screened. Eligible patients were randomly
assigned (1:1) to receive ECAP-controlled closed-loop spinal cord
stimulation (investigational group) or fixed-output, open-loop spinal
cord stimulation (control group). A total of 134 subjects (67 subjects
in each treatment group) were randomized. Patients, investigators, and
site staff were masked to the treatment assignment. The primary outcome
was the proportion of patients with a reduction of 50 percent or more
in overall back and leg pain with no increase in pain medications. Non-
inferiority ([delta]=10 percent) followed by superiority were tested in
the intention-to-treat population at 3 months (primary analysis) and 12
months (additional prespecified analysis) after the permanent implant.
This study is registered with ClinicalTrials.gov, NCT02924129.
---------------------------------------------------------------------------
\70\ Mekhail N, Levy RM, Deer TR, Kapural L, Li S, Amirdelfan K,
Hunter CW, Rosen SM, Costandi SJ, Falowski SM, Burgher AH, Pope JE,
Gilmore CA, Qureshi FA, Staats PS, Scowcroft J, Carlson J, Kim CK,
Yang MI, Stauss T, Poree L; Evoke Study Group. Long-term safety and
efficacy of closed-loop spinal cord stimulation to treat chronic
back and leg pain (Evoke): a double-blind, randomised, controlled
trial. Lancet Neurol. 2020 Feb;19(2):123-134. Epub 2019 Dec 20.
---------------------------------------------------------------------------
The applicant stated that standard primary and secondary endpoints
for spinal cord stimulation studies were employed. For the primary
study endpoint, the study authors defined a responder as having at
least 50 percent improvement in pain relative to baseline. The
applicant explained that this level of improvement was found to
represent a substantial improvement per the IMMPACT
recommendations.\71\ The study authors stated that the secondary
outcomes assessed the percentage change from baseline in leg pain VAS
and back pain VAS, prevalence of high responders (>=80 percent
reduction) for overall back and leg pain, and prevalence of responders
(>=50 percent reduction) for back pain VAS, all at 3 months and 12
months. A host of additional efficacy measures including quality of
life, pain medication use, and functional outcomes were also employed
as per the IMMPACT recommendations.\72\ An independent, blinded
Clinical Events Committee (CEC) reviewed and adjudicated all adverse
events occurring in the study. The authors reported that, between
February 21, 2017 and February 20, 2018, 134 patients were enrolled and
randomly assigned (67 to each treatment group), and that there were no
between-group differences in the diagnoses, previous treatments, or
other baseline demographics or characteristics.\73\ The intention-to-
treat analysis comprised 125 patients at 3 months (62 in the closed-
loop group and 63 in the open-loop group) and 118 patients at 12 months
(59 in the closed-loop group and 59 in the open-loop group).
---------------------------------------------------------------------------
\71\ Dworkin RH, Turk DC, Wyrwich KW, Beaton D, Cleeland CS,
Farrar JT, Haythornthwaite JA, Jensen MP, Kerns RD, Ader DN,
Brandenburg N, Burke LB, Cella D, Chandler J, Cowan P, Dimitrova R,
Dionne R, Hertz S, Jadad AR, Katz NP, Kehlet H, Kramer LD, Manning
DC, McCormick C, McDermott MP, McQuay HJ, Patel S, Porter L, Quessy
S, Rappaport BA, Rauschkolb C, Revicki DA, Rothman M, Schmader KE,
Stacey BR, Stauffer JW, von Stein T, White RE, Witter J, Zavisic S.
Interpreting the clinical importance of treatment outcomes in
chronic pain clinical trials: IMMPACT recommendations. J Pain. 2008
Feb;9(2):105-21. Epub 2007 Dec 11.
\72\ Dworkin RH, Turk DC, Farrar JT, Haythornthwaite JA, Jensen
MP, Katz NP, et al. Core outcome measures for chronic pain clinical
trials: IMMPACT recommendations. Pain. 2005 Jan;113(1-2):9-19.
\73\ Mekhail N, Levy RM, Deer TR, Kapural L, Li S, Amirdelfan K,
Hunter CW, Rosen SM, Costandi SJ, Falowski SM, Burgher AH, Pope JE,
Gilmore CA, Qureshi FA, Staats PS, Scowcroft J, Carlson J, Kim CK,
Yang MI, Stauss T, Poree L; Evoke Study Group. Long-term safety and
efficacy of closed-loop spinal cord stimulation to treat chronic
back and leg pain (Evoke): a double-blind, randomised, controlled
trial. Lancet Neurol. 2020 Feb;19(2):123-134. Epub 2019 Dec 20.
---------------------------------------------------------------------------
Regarding the applicant's first claim that the closed-loop
stimulation of the Evoke[supreg] SCS System provides a greater
responder rate in overall chronic leg and back pain with no increase in
baseline pain medications in comparison to open-loop stimulation at 3
and 12 months, the applicant cited findings from this study that a
greater responder rate in overall chronic leg and back pain with no
increase in baseline pain medications was achieved in a greater
proportion of patients in the closed-loop group than in the open-loop
group at 3 months (82.3 percent vs 60.3 percent; difference 21.9
percent; p=0[middot]0052) and at 12 months (83.1 percent vs 61.0
percent; difference 22.0 percent; p=0[middot]0060). Non-inferiority was
met at 3 months (p<0[middot]0001) and 12 months (p<0[middot]0001), as
was superiority (3 months, p=0[middot]0052; 12 months,
p=0[middot]0060).
Regarding the applicant's second claim that the closed-loop
stimulation of the Evoke[supreg] SCS System provides a greater
percentage change in back pain measured by Visual Analog Scale at 3 and
12 months, the applicant cited Evoke pivotal clinical study findings
that at 3 months, 72.1 percent (sd=29.4 percent) of patients in the
closed-loop group reported improvements in back pain compared to 57.5
percent in the open-loop group (superiority p=0.015). At 12 months,
69.4 percent (sd=30.6 percent) of patients in the closed-loop group
reported improvements in back pain compared versus 54 percent (sd=39.5
percent) in the open-loop group (superiority p=0.020).
Regarding the applicant's third claim that the closed-loop
stimulation of the Evoke[supreg] SCS System provides a greater
incidence of 50 percent reduction in back pain at 3 and 12 months, the
applicant cited Evoke pivotal clinical study findings that at 3 months,
81 percent of patients in the closed-loop group reported a 50% or
greater reduction in back pain compared to 57 percent in the open-loop
group (superiority p=0.0033). Per the study, at 12 months, 80 percent
of patients in the closed-loop group achieved this outcome compared to
58 percent in the open-loop group (superiority p=0.0079).
Regarding the applicant's fourth claim that the closed-loop
stimulation of the Evoke[supreg] SCS System provides a greater
incidence of 50 percent reduction in leg pain at 12 months, the
applicant cited Evoke pivotal clinical study findings that at 12
months, this outcome was met by a statistically significantly greater
proportion of patients in the closed-loop group (83 percent) than in
the open-loop group (61 percent) (superiority p=0.0060).
Regarding the applicant's fifth claim that the closed-loop
stimulation of the Evoke[supreg] SCS System provides a greater
incidence of 80 percent reduction in overall back and leg pain at 12
months,
[[Page 44606]]
the applicant cited findings from the Evoke pivotal clinical study that
at 12 months, this outcome was met by a statistically significantly
greater proportion of patients in the closed-loop group (56 percent)
than in the open-loop group (37 percent) (superiority p=0.039).
Regarding the applicant's sixth claim that the closed-loop
stimulation of the Evoke[supreg] SCS System provides consistently
greater visual improvement in remaining secondary endpoint measures at
3 and 12 months, the applicant noted the Evoke pivotal clinical study
authors observations that significant and clinically important
improvements in both treatment groups in all other patient-reported
outcomes at 3 and 12 months, including Oswestry Disability Index (ODI),
Profile of Mood states Total Mood Disturbance (POMS-TMD), Pittsburgh
Sleep Quality Index (PSQI), EQ-5D-5L Index Score, and Short Form Health
Survey (SF-12) Physical Component Summary (PCS) and Mental Component
Summary (MCS).\74\ The authors noted that, in general, the improvement
was greater in the closed-loop group than in the open-loop group at
both 3 and 12 months, with significant differences seen in POMS-TMD
scores (p=0.0037 at 3 months; p=0.0003 at 12 months) and SF-12 MCS
scores (p=0.0005 at 3 months) and (p=0.0004 at 12 months).
---------------------------------------------------------------------------
\74\ Ibid.
---------------------------------------------------------------------------
Regarding the applicant's seventh claim that closed-loop patients
spent a greater percentage of time in the therapeutic window compared
to open-loop patients, the applicant cited Evoke pivotal clinical study
findings that at 3 months, the time in therapeutic window averaged 91.1
percent in the closed-loop group compared to 59.5 percent in the open-
loop group (superiority p<0.0001). At 12 months, the time in
therapeutic window averaged 95.2 percent in the closed-loop group
versus 47.9 percent in the open-loop group (superiority p<0.0001).
Regarding the applicant's eighth claim that the closed-loop
stimulation of the Evoke[supreg] SCS System provides a balanced safety
profile between treatment groups, the applicant cited findings from the
Evoke pivotal clinical study that the type, nature, and severity of
adverse events were similar between treatment groups. The authors
reported that, among the findings, 34 study-related adverse events
occurred in 24 patients (23 adverse events in the closed-loop group, in
13 [19 percent] patients [95 percent CI 10.8-30.9], and 11 adverse
events in the open-loop group in 11 [16 percent] patients [95 percent
CI 8.5-27.5]). The authors stated that the most frequently reported
study-related adverse events in both treatment groups were lead
migration (nine [7 percent] patients), implantable pulse generator
pocket pain (five [4 percent]), and muscle spasm or cramp (three [2
percent]).
The second article provided by the applicant reported the results
from the Evoke pivotal clinical study at 24 months follow-up.\75\ The
applicant submitted this article in support of its claim that the
Evoke[supreg] SCS System maintained statistical superiority in pain
response and pain reduction at 24 months. The authors reported that 50
closed-loop patients and 42 open-loop patients completed 24-month
follow-up. The authors noted that the double-blind was maintained for
the full study duration. The authors reported that, at 24 months, a
significantly greater proportion of closed-loop patients (79.1 percent)
were responders (>=50 percent reduction in overall back and leg pain)
than open-loop patients (53.7 percent) (p=0.001). Similarly, the
authors reported that there was a significantly greater proportion of
high responders, (>=80 percent reduction in overall pain) in the
closed-loop group (46.3 percent) compared to the open-loop (29.9
percent) (p=0.047). The authors report that reduction in overall back
and leg pain was significantly greater for closed-loop patients (mean
score=26.4; point decrease=55.6) than open-loop patients (mean
score=38.3; point decrease=43.9) (mean score difference=-11.9, p=0.02).
---------------------------------------------------------------------------
\75\ Mekhail N, Levy RM, Deer TR, Kapural L, Li S, Amirdelfan K,
Hunter CW, Rosen SM, Costandi SJ, Falowski SM, Burgher AH, Pope JE,
Gilmore CA, Qureshi FA, Staats PS, Scowcroft J, McJunkin T, Carlson
J, Kim CK, Yang MI, Stauss T, Pilitsis J, Poree L; Evoke Study
Group, Brounstein D, Gilbert S, Gmel GE, Gorman R, Gould I, Hanson
E, Karantonis DM, Khurram A, Leitner A, Mugan D, Obradovic M, Ouyang
Z, Parker J, Single P, Soliday N. Durability of Clinical and
Quality-of-Life Outcomes of Closed-Loop Spinal Cord Stimulation for
Chronic Back and Leg Pain: A Secondary Analysis of the Evoke
Randomized Clinical Trial. JAMA Neurol. 2022 Jan 8: e214998. doi:
10.1001/jamaneurol.2021.4998. Epub ahead of print. PMID: 34998276;
PMCID: PMC8742908.
---------------------------------------------------------------------------
The third article provided by the applicant reported the results
from the Avalon study, a prospective, multicenter, single-arm study of
the Evoke[supreg] SCS System.\76\ While not a standalone claim of
substantial clinical improvement, the applicant submitted this article
in support of its other SCI claims to demonstrate that the relevant
findings from the Evoke pivotal trial had been replicated in another
multi-center trial with 12-month follow up. The authors of the third
article stated that the purpose of the Avalon study was to determine
whether maintaining stable SC activation has a beneficial outcome on
pain relief by demonstrating the safety and performance of the new
closed-loop Evoke[supreg] SCS System. The protocol was publicly
registered at Australian New Zealand Clinical Trials Registry. Patients
were consented at five clinical sites in Australia from August 2015 to
April 2017 for the Avalon study.\77\ A total of 70 patients underwent a
trial procedure. Of these, 68 (97.1 percent) completed the end-of-trial
assessments and were evaluable. Of the 68 patients, 56 (82.4 percent)
with assessment data had a reduction of 40 percent or more from
baseline in their overall VAS rating; of those, 48 patients elected to
proceed with a permanent implant. Two additional patients with a
segmental VAS reduction of 40 percent or more proceeded with a
permanent implant as per the protocol inclusion criterion. Fifty
subjects were implanted (71.4 percent of those trialed).
---------------------------------------------------------------------------
\76\ Russo M, Brooker C, Cousins MJ, Taylor N, Boesel T,
Sullivan R, Holford L, Hanson E, Gmel GE, Shariati NH, Poree L,
Parker J. Sustained Long-Term Outcomes with Closed-Loop Spinal Cord
Stimulation: 12-Month Results of the Prospective, Multicenter, Open-
Label Avalon Study. Neurosurgery. 2020 Feb 5. [Epub ahead of print]
\77\ Ibid.
---------------------------------------------------------------------------
The authors of the Avalon study article stated that baseline
assessments in this study included ratings of pain on the Visual Analog
Scale (100-mm VAS), impact of pain (Brief Pain Inventory [BPI]),
function (Oswestry Disability Index [ODI]), sleep (Pittsburgh Sleep
Quality Index [PSQI]), quality of life (EuroQol instrument [EQ-5D-5L]),
and medication usage. Adverse events were assessed throughout the
study. Along with raw scores and percent change from baseline, VAS data
were also analyzed as responders (>=50 percent pain relief) and high
responders (>=80 percent pain relief). According to the article, the
outcomes data were analyzed using paired t-tests with an alpha of 0.05
and results were presented for the permanently implanted patients only.
The authors reported favorable results for pain relief
outcomes.\78\ At 12 months, 76.9 percent of patients were back pain
responders (>=50 percent pain reduction), with 56.4 percent being
classified as high responders (>=80 percent pain reduction). The
proportion of patients who were leg pain responders at 12 months was
79.3 percent (>=50 percent pain reduction), and 58.6 percent of
patients were high responders (>=80 percent pain reduction). The
proportion of patients who were overall pain responders at 12 months
was 81.4 percent (>=50 percent pain reduction), and 53.5 percent of
[[Page 44607]]
patients were high responders (>=80 percent pain reduction).
---------------------------------------------------------------------------
\78\ Ibid.
---------------------------------------------------------------------------
Based upon the evidence presented by the applicant, we have the
following concerns regarding whether the Evoke[supreg] SCS System meets
the substantial clinical improvement criterion. First, we note that
none of the sources provided by the applicant compared the
Evoke[supreg] SCS System to other currently available technologies,
such as other open-loop spinal cord stimulation products. However, in
the Evoke pivotal clinical study, all patients were implanted with the
Evoke[supreg] SCS System, with the difference between study groups
being that the implanted devices in the treatment group were set to
closed-loop stimulation as opposed to open-loop stimulation. While the
study is testing outcomes between different aspects of the
Evoke[supreg] SCS System itself, additional information comparing the
Evoke[supreg] SCS System to existing spinal cord stimulators would help
inform our assessment of substantial clinical improvement. While the
applicant asserted that the Evoke[supreg] SCS System is the only
available closed-loop SCS, we invite public comment on whether there
are other existing technologies which may be appropriate comparators.
Second, we have concern regarding the patient sample size cited in
the studies. Furthermore, the applicant cites the Avalon study in
Australia to support its claim that the pivotal clinical study's
results were replicated internationally. We request additional details
about how these two studies' results would be generalizable to the U.S.
population.
We are inviting public comments on whether the Evoke[supreg] SCS
System meets the substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the Evoke[supreg]
SCS System would be reported with HCPCS code 63685. 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. 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. For our calculations, we used APC 5465 Level 5
Neurostimulator and Related Procedures, which had a CY 2021 payment
rate of $29,444.52 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 63685 had a
device offset amount of $24,209.28 at the time the application was
received. According to the applicant, the estimated average cost of the
Evoke[supreg] SCS system is $37,000. We note that the device cost
provided by the applicant encompasses the entire Evoke[supreg] SCS.
However, as previously discussed, the external components of the
Evoke[supreg] SCS (the surgical accessories, clinical interface,
clinical system transceiver, pocket console and chargers) may not meet
the criteria required under Sec. 419.66(b)(3), i.e., the external
components are not implantable and/or do not come in contact with human
tissue. Therefore, the cost of only the eligible internal components
may be less than the cost of the entire system and could affect the
calculations in the following formulas.
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 $37,000 for the Evoke[supreg] SCS System is
125.7 percent of the applicable APC payment amount for the service
related to the category of devices of $29,444.52 (($37,000/$29,444.52)
x 100 = 125.7 percent). Therefore, we believe the Evoke[supreg] SCS
System meets the first cost significance requirement.
The second cost significance requirement, at Sec. 419.66(d)(2),
provides that the estimated average reasonable cost of the devices in
the category must exceed the cost of the device-related portion of the
APC payment amount for the related service by at least 25 percent,
which means that the device cost needs to be at least 125 percent of
the offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $37,000 for the
Evoke[supreg] SCS System is 152.8 percent of the cost of the device-
related portion of the APC payment amount for the related service of
$24,209.28 (($37,000/$24,209.28) x 100 = 152.8 percent). Therefore, we
believe that the Evoke[supreg] SCS System meets the second cost
significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $37,000 for the Evoke[supreg] SCS System and the
portion of the APC payment amount for the device of $24,209.28 is 43.4
percent of the APC payment amount for the related service of $29,444.52
((($37,000-$24,209.28)/$29,444.52) x 100 = 43.4 percent). Therefore, we
believe that the Evoke[supreg] SCS System meets the third cost
significance requirement.
We have a concern regarding whether the Evoke[supreg] SCS System
meets all of the cost criteria. Specifically, as previously discussed,
the external components of the Evoke[supreg] SCS may not meet the
criteria required under Sec. 419.66(b)(3), i.e., the external
components (the surgical accessories, clinical interface, clinical
system transceiver, pocket console and chargers) are not implantable
and/or do not come in contact with human tissue. Therefore, the cost of
only the eligible internal components may be less than the cost of the
entire system. If the cost of the internal components is sufficiently
lower than that of the whole system, then that could affect the
calculations for the cost requirements to the point where some of those
requirements are not met.
We are inviting public comment on whether the Evoke[supreg] SCS
System meets the device pass-through payment criteria discussed in this
section, including the cost criterion for device pass-through payment
status.
(5) Pathfinder[supreg] Endoscope Overtube
Neptune Medical submitted an application for a new device category
for transitional pass-through payment status for the Pathfinder[supreg]
Endoscope Overtube (the Pathfinder[supreg]) for CY 2023. According to
the applicant, the Pathfinder[supreg] is a flexible, single use,
overtube with stiffening capabilities that is used to manage endoscope
looping and improve tip control of the endoscope. Per the applicant,
the Pathfinder[supreg] is indicated for use with an endoscope to
facilitate intubation and treatment in the gastrointestinal (GI) tract
in adult patients (22 years of age and older). The applicant indicated
that the flexible overtube may be connected to vacuum for rigidization.
Specifically, the handle includes a vacuum line which is connected to
free space within the device that is completely contained, forming the
vacuumable volume. The applicant stated that the handle rotator has two
positions: the first connects the
[[Page 44608]]
vacuumable volume within the device to atmosphere (vent) to stay in the
flexible position, and the second position connects the vacuumable
volume to a source of vacuum to transition to the rigid condition. When
transitioned to the rigid condition, the device maintains its shape at
the time of rigidization, allowing the endoscope to advance or withdraw
relative to the overtube with minimal disturbance to the surrounding
anatomy. According to the applicant, when transitioned to the flexible
condition, the device can move relative to the patient anatomy and
endoscope for navigation through the GI tract.
With respect to the newness criterion at Sec. 419.66(b)(1), on
August 20, 2019, the applicant received 510(k) clearance from FDA for
the Pathfinder[supreg] as a Class II device to be used with an
endoscope to facilitate intubation, change of endoscopes, and treatment
in the GI tract in adult patients (22 years of age and older). We
received the application for a new device category for transitional
pass-through payment status for the Pathfinder[supreg] on November 30,
2021, which is within 3 years of the date of the initial FDA marketing
authorization. We are inviting public comments on whether the
Pathfinder[supreg] meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Pathfinder[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. The applicant
also claimed that the Pathfinder[supreg] meets the device eligibility
requirements of Sec. 419.66(b)(4) because it is not an instrument,
apparatus, implement, or item for which depreciation and financing
expenses are recovered, and it is not a supply or material furnished
incident to a service. We are inviting public comments on whether the
Pathfinder[supreg] meets the eligibility criteria at Sec. 419.66(b).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996.
The applicant provided a list of all established device categories
used presently or previously for pass-through payment that describe
related or similar products. The applicant indicated that while there
are other endoscope overtubes available, there are no known competitive
devices on the market that can be toggled from being flexible to rigid
instantly to prevent/manage endoscope looping. The applicant stated
that the Pathfinder[supreg] is unique in its ability to do this using a
proprietary technology called Dynamic Rigidization\TM\. For each
established device category, the applicant provided explanations as to
why that category does not encompass the nominated device: (1) C1748
(endoscope, single-use (i.e., disposable) upper GI, imaging/
illumination device (insertable)), and (2) C1749 (endoscope, retrograde
imaging/illumination colonoscope device (implantable)). According to
the applicant, the Pathfinder[supreg] is not an imaging/illumination
device. Furthermore, the Pathfinder[supreg] can be used in upper and
lower GI endoscope/colonoscope procedures to eliminate device looping.
As such, the applicant does not believe that the existing codes
encompass the Pathfinder[supreg].
Upon review, it does not appear that there are any existing pass-
through payment categories that might apply to the Pathfinder[supreg].
We are inviting public comment on whether the Pathfinder[supreg] meets
the device category criterion.
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of FDA's Breakthrough Devices Program and has received
FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The applicant states that the
Pathfinder[supreg] represents a substantial clinical improvement over
existing technologies. With respect to this criterion, the applicant
submitted studies that examined the impact of the Pathfinder[supreg]
when used with an endoscope to facilitate intubation, change of
endoscopes, and treatment in the GI tract in adult patients (22 years
of age and older).
Broadly, the applicant asserts the following areas in which the
Pathfinder[supreg] would provide a substantial clinical improvement:
(1) minimize scope looping and complications from scope looping, (2)
reduce endoscopist's workload during endoscope procedure, (3) provide
endoscope tip stabilization, (4) enable endoscopic procedure in
patients with altered anatomy, (5) enable crossing of anastamosis, and
(6) enable antegrade and retrograde enteroscopy, in use for the
prevention of endoscope looping. The applicant provided eleven articles
specifically for the purpose of addressing the substantial clinical
improvement criterion.
In support of the claim that the Pathfinder[supreg] minimizes scope
looping and complications from scope looping, the applicant submitted a
prospective single center study performed over 11 months by two
endoscopists in the United States.\79\ The study population consisted
of 15 patients with a mean age of 63.2 years (range 23-88 y) and mean
Body Mass Index (BMI) of 28.6 kg/m2 (range 16.8-46.2 kg/m2). Two of the
patients were placed under moderate sedation, 11 had monitored
anesthesia care (MAC) and two patients underwent general anesthesia.
The mean (standard deviation) Boston bowel preparation scale (BBPS)
score was 6.9 (1.8), with a range of 6-9. Indications for colonoscopy
included surveillance (n=9), evaluation of Crohn's disease (n=2), polyp
resection (n=3), and other diagnostic purpose (n=1). To complete the
colonoscopy, the endoscopist resorted to the use of the rigidizing
overtube in all 15 cases due to several technical difficulties
encountered. The authors noted the reasons for overtube use included a
history of difficult colonoscopy due to a long, tortuous colon (n=9),
inability to reach the cecum (n=3) or the ileocolonic anastomosis
(n=1), inability to completely visualize the ileocecal valve (n=1), and
inability to advance colonoscope due to looping and bradycardia (n=1).
The authors noted that colonoscopy was successfully completed in all 15
cases using the overtube device.
---------------------------------------------------------------------------
\79\ Park, N., Abadir, A., Chahine, A., Eng, D., Ji, S., Nguyen,
P., Bernal, E., Simoni, R. & Samarasena, J. B. (2021). A Novel
Dynamic Rigidizing Overtube Significantly Eases Difficult
Colonoscopy. Techniques and Innovations in Gastrointestinal
Endoscopy.
---------------------------------------------------------------------------
The applicant provided a second article to support the claims that
the Pathfinder[supreg] minimizes scope looping and complications from
scope looping, provides endoscope tip stabilization, enables endoscopic
procedure in patients with altered anatomy, and enables crossing of
anastomosis. The article consists of an abstract from a set of case
studies performed in two tertiary care endoscopy centers in the United
[[Page 44609]]
States.\80\ From May 2019 to February 2020, 29 patients were
consecutively treated using the Pathfinder[supreg]. The patients were
predominantly male with a median age of 66 years old. Of the 29
patients scoped, one patient received an upper endoscopy, 24 received
colonoscopy, and four received enteroscopy. The types of anesthesia
provided to these patients included: general anesthesia for four
patients, MAC for 15 patients, moderate monitored anesthesia for nine
patients, and no sedation for one patient. The indication for using the
Pathfinder[supreg] was incomplete colonoscopy in 12 patients, enhancing
insertion depth not feasible with standard endoscopy in six patients
and endoscope stabilization during endoscopic resection in 11 patients,
according to the study researchers.
---------------------------------------------------------------------------
\80\ Wei, M. T., Hwang, J. H., Watson, R. R., Park, W., &
Friedland, S. (2021). Novel rigidizing overtube for colonoscope
stabilization and loop prevention (with video). Gastrointestinal
Endoscopy, 93(3), 740-749.
---------------------------------------------------------------------------
The applicant submitted a third article,\81\ which described a 57-
year-old male being evaluated for high-risk colon cancer screening due
to positive Cologuard, to support the claim that the Pathfinder[supreg]
minimizes scope looping and complications from scope looping. The
applicant pointed out that an initial colonoscopy on the patient was
incomplete due to severely redundant colon, i.e., an abnormally long
colon with additional loops or twists. The patient was referred to the
study's tertiary care center for a repeat attempt with advanced
endoscopy. A second colonoscopy was attempted, but significant looping
occurred due to the large redundant colon, resulting in another
incomplete colonoscopy. Maneuvers like changing to supine position,
scope torsion, abdominal pressure, use of colonic overtube and Naviaid
balloon-assisted colonoscopy were all unsuccessful, according to the
study researchers. The study's tertiary care center performed a virtual
computerized tomography (CT) colonography, which revealed a polyp in
the ascending colon and markedly redundant colon. This prompted a third
colonoscopy, which again showed significant looping of the colon and
the colonoscopy was incomplete, per the study researchers. After three
unsuccessful conventional colonoscopies, the patient had a colonoscopy
with the rigidizing Pathfinder[supreg]. According to the study, the
exam was technically challenging, requiring more than two hours of
procedure time, but was successfully completed.
---------------------------------------------------------------------------
\81\ Patel, P., & Khara, H. (2021). S2537 Successful Polypectomy
with Novel Rigidizing Overtube with Failed Previous Colonoscopies.
Official journal of the American College of Gastroenterology[verbar]
ACG, 116, S1070.
---------------------------------------------------------------------------
A fourth article \82\ was provided by the applicant to support the
claim that the Pathfinder[supreg] minimizes scope looping and
complications from scope looping. This article presented a challenging
case of a laterally spreading tumor at the hepatic flexure in a
difficult and unstable colon, which was removed by endoscopic
submucosal dissection (ESD) using a novel injectable needle-type knife
and with the assistance of the dynamic rigidizing Pathfinder[supreg].
The case involved a 66-year-old man with coronary artery disease,
hypertension, hyperlipidemia, and diabetes mellitus who was found on
screening colonoscopy to have a 35-mm laterally spreading tumor at the
hepatic flexure (Paris IIa[thorn]Is). An attempted endoscopic mucosal
resection was unsuccessful because of non-lifting of the lesion during
submucosal injection; therefore, the patient was referred for ESD.
Given the length of the procedure and the patient's medical
comorbidities, the procedure was performed under general endotracheal
anesthesia. A pediatric colonoscope (PCF-H190DL, Olympus America,
Center Valley, Pa, USA) with a tapered-tip distal attachment cap (ST
hood, Fujifilm Medical Systems, Stamford, Conn, USA) was initially
advanced to the cecum and withdrawn to the hepatic flexure. However,
because of a highly redundant left colon segment, the colonoscope could
not be reduced into a stable, short position for ESD despite manual
abdominal counterpressure and position changes. In the looped, long
position at the hepatic flexure, the endoscope was noted to be in an
extremely unstable position and therefore unsafe for ESD. The dynamic
rigidizing Pathfinder[supreg] overtube allowed for a stable endoscopic
position in a challenging ESD at the hepatic flexure per the applicant.
---------------------------------------------------------------------------
\82\ Coronel, M., Coronel, E., Romero, L., & Phillip, S. G.
(2021). Combination of a dynamic rigidizing overtube and a novel
injectable needle-type knife to facilitate colorectal endoscopic
submucosal dissection. VideoGIE, 6(7), 297-300.
---------------------------------------------------------------------------
The applicant provided a fifth article \83\ to support the claims
that the Pathfinder[supreg] minimizes scope looping and complications
from scope looping and enables endoscopic procedure in patients with
altered anatomy. This article presents two cases demonstrating the
utility of the rigidizing overtube in accomplishing altered-anatomy
endoscopic retrograde cholangiopancreatography (ERCP), which consisted
of the overtube reducing looping and allowing for increased distances
that shorter scopes (such as a side-viewing duodenoscope) are unable to
achieve. According to the authors, success varies with intubation and
cannulation in ERCP for patients with surgically altered anatomy. The
authors concluded that this is particularly important in managing
gastric loops and tight angulation at surgical anastomoses, including
jejunojejunostomy anastomosis.
---------------------------------------------------------------------------
\83\ Wei, M. T., Friedland, S., Watson, R. R., & Hwang, J. H.
(2020). Use of a rigidizing overtube for altered-anatomy ERCP.
VideoGIE, 5(12), 664-666.
---------------------------------------------------------------------------
A sixth article \84\ the applicant provided in support of its claim
that the Pathfinder[supreg] minimizes scope looping and complications
from scope looping was a single site case study of a 64-year-old man
with a history of C5 spinal cord injury due to a diving accident who
presented for screening colonoscopy. A pediatric colonoscope was used
initially, but given significant looping, the colonoscope could only
reach the transverse colon. The colonoscope was withdrawn, and the
Pathfinder[supreg] overtube was used. The applicant pointed out that
with assistance from the overtube, the colonoscope reached the cecum
easily in eight minutes. A 1-cm sessile polyp was found in the
ascending colon and was removed by cold snare. An additional 3 polyps
measuring less than one centimeter were identified and removed by cold
snare, and the procedure was terminated. Three of the polyps (including
the 1-cm polyp) were determined to be tubular adenoma. The fourth polyp
was identified as a hyperplastic polyp.
---------------------------------------------------------------------------
\84\ Wei, M. T., Hwang, J. H., Watson, R., & Friedland, S.
(2020). Use of a rigidizing overtube to complete an incomplete
colonoscopy. VideoGIE, 5(11), 583-585.
---------------------------------------------------------------------------
A seventh article \85\ provided in support of the same claim
described a 72-year-old male who presented for surveillance
colonoscopy. The colonoscope was successfully advanced to the ascending
colon, however, it could not be advanced further due to loop formation.
Every time the scope was advanced through the loop the patient became
bradycardic to a heart rate in the 40s, presumably from a vasovagal
reflex. Repeated attempts at advancing the colonoscope were
unsuccessful due to looping and bradycardia despite abdominal
counterpressure and position change.
[[Page 44610]]
The scope was removed and the rigidizing overtube device was introduced
onto the scope. The scope with overtube was advanced to the ascending
colon in its flexible state. Once in the ascending colon, the overtube
was rigidized which allowed for easy cecal intubation and successful
completion of colonoscope without any loop formation, as the applicant
noted.
---------------------------------------------------------------------------
\85\ Abadir, A., Chehade, N. E. H., Park, N., Eng, D., &
Samarasena, J. (2020). S1876 Use of a Novel Dynamic Rigidizing
Overtube in Difficult Colonoscopy Due to Looping. Official journal
of the American College of Gastroenterology[verbar] ACG, 115, S971.
---------------------------------------------------------------------------
An eighth article \86\ provided by the applicant in support of the
claim of a reduction in the endoscopist's workload during the endoscope
procedure was a prospective, single center study performed over 6
months. Difficult colonoscopy subjects were categorized based on
looping that prevented reaching the cecum despite position change and
abdominal counter pressure (LOOP group), or poor stabilization to
perform therapeutic polypectomy (UNSTABLE group). Parameters assessed
included successful/failed salvage of the procedure, and the in-
procedure National Aeronautics and Space Administration (NASA) Task
Load Index (TLX) \87\ before and after use of the rigidizing overtube.
The TLX raw and weighted scores were compared for each type of demand
(mental, physical, effort, temporal, performance, and frustration).
Over the study period, there were 14 difficult colonoscopy procedures:
eight in the LOOP group and six in the UNSTABLE group. In the LOOP
group, all eight cases were salvaged, and cecum was reached after the
Pathfinder[supreg] overtube was used. The TLX weighted score decreased
from 81.1 to 26.0 after use (P,0.01). In the UNSTABLE group, complete
polypectomy was successful in all cases using the Pathfinder[supreg]
overtube. The TLX weighted score decreased from 79.7 to 40.4 after use
(P,0.01). In all procedures, the TLX raw scores for each type of demand
was reduced. The applicant pointed out that all six dimensions of the
NASA-TLX: mental demand, physical demand, temporal demand, effort,
performance, and frustration level were significantly improved after
using the overtube. All score changes were statistically significant
per the study researchers. The overall weighted NASA-TLX score
decreased from an average of 80.30 to 30.85 after using the device as
the applicant identified. In this case series, the study showed that
the novel rigidizing overtube decreases burden on the endoscopist by
reducing the workload perceived during the procedure, according to the
study researchers.
---------------------------------------------------------------------------
\86\ Abadir, A., Park, N., Eng, D. J., Chehade, N. E. H., &
Samarasena, J. (2020, October). A Novel Dynamic Rigidizing Overtube
Significantly Eases Difficult Colonoscopy. American Journal of
Gastroenterology (Vol. 115, pp. S83-S83). Two Commerce Square, 2001
Market St., Philadelphia, PA 19103 USA: Lippincott Williams &
Wilkins.
\87\ TLX @ NASA Ames--Home.
---------------------------------------------------------------------------
In support of the claims about a reduction in the endoscopist's
workload during the endoscope procedure and enabling antegrade and
retrograde enteroscopy, the applicant submitted a ninth article,\88\
which was a retrospective single site study over a 6-month period, in
which two endoscopists performed retrograde and antegrade enteroscopies
using a rigidizing overtube. Retrograde enteroscopy was performed via
the anus by advancing the overtube to the cecum in its flexible state
with the pediatric colonoscope, reducing the scope and overtube
construct, and then rigidizing at the cecum. Following rigidization,
the scope was pushed through the ileocecal valve and advanced
maximally. Antegrade enteroscopy was performed by inserting the dynamic
rigidizing overtube with use of the pediatric colonoscope via the
mouth, rigidizing in the duodenum or jejunum, and then advancing
maximally. A total of nine retrograde and three antegrade enteroscopies
were performed. On retrograde enteroscopy, small bowel depth ranged
from 15 cm to 70 cm from the ileocecal valve, with a mean of 48.9 cm.
There were no complications associated with use of the dynamic
rigidizing overtube, both in antegrade and retrograde evaluation. Of
note, in one case, initial attempts at retrograde double-balloon
enteroscopy failed due to looping and unfavorable angulation of the
ileocecal valve. Multiple attempts at intubation including manual
abdominal pressure and position changes were unsuccessful. The dynamic
rigidizing overtube was then introduced with successful intubation and
subsequent exploration of the ileum. Overall, both endoscopists
reported significant ease of enteroscopy compared to traditional
double-balloon methods, with lower perceived mental and physical
demand, according to the study.
---------------------------------------------------------------------------
\88\ Park, N., Abadir, A., Eng, D., Chehade, N. E. H., &
Samarasena, J. (2020). S0972 Enteroscopy Enabled Using a Novel
Dynamic Rigidizing Overtube: An Initial Single Center Experience.
Official journal of the American College of Gastroenterology[verbar]
ACG, 115, S495-S496.
---------------------------------------------------------------------------
The applicant supplied a tenth article \89\ that described a single
site case study in support of its claim that the Pathfinder[supreg]
offers improved endoscope tip stabilization. The study described using
a Pathfinder[supreg] overtube 85-centimeters long to accommodate a
pediatric colonoscope, upper endoscope, or enteroscope. The study
presented two contrasting cases demonstrating the rigidizing overtube
in colorectal endoscopic submucosal dissection (ESD). In the first
case, a 70-year-old man was referred for ESD of a 20mm polyp in the
ascending colon. Following submucosal injection, partial
circumferential incision was performed. According to the authors, the
case was challenging due to poor tip control in the right colon. The
cut made by the knife was irregular and of higher risk, requiring more
time to make the incision. The polyp was identified as a tubular
adenoma with clear margins. In the second case, a 44-year-old man
presented following recent diagnosis of ulcerative colitis. Prior
colonoscopy demonstrated a large 3-5cm tubulovillous adenoma in the
ascending colon. A cap and rigidizing overtube was used during the
colonoscopy. During ESD, there was severe fibrosis in the distal
portion of the lesion. The rigidizing overtube offered improved scope
stability and tip control, facilitating precise dissection of the
narrowed fibrotic submucosal space, per the applicant. The lesion was
removed en bloc and was identified as a tubular adenoma with low grade
dysplasia, with clear margins.
---------------------------------------------------------------------------
\89\ Wei, M. T., Hwang, J. H., & Friedland, S. (2021). S2027 Use
of the Rigidizing Overtube in Assisting Endoscopic Submucosal
Dissection Among Patients with Ulcerative Colitis. Official journal
of the American College of Gastroenterology[verbar] ACG, 116, S880.
---------------------------------------------------------------------------
In support of its claim that the Pathfinder[supreg] enables
endoscopic procedure in patients with altered anatomy, the applicant
submitted an eleventh article \90\ describing a single site case study
about a 42-year-old female with a history of iatrogenic bile duct
transection during cholecystectomy who underwent Roux-en-Y
Hepaticojejunostomy (HJ). Her course was complicated by HJ stricture
requiring double-balloon assisted enteroscopy with ERCP to place a
fully covered metal stent. After three months the stent was removed,
but restricturing occurred six months later and she developed left-
sided intrahepatic stone disease. Double-balloon assisted enteroscopy
to reach the anastomosis became more difficult. As a result, multiple
antegrade procedures via endoscopic ultrasound (EUS) guided
hepaticogastrostomy with lithotripsy were used to treat accessible
intrahepatic stones, but several more
[[Page 44611]]
stones remained. To facilitate further endoscopic procedures, a
shortcut was made using laparoscopic revision to create a new entero-
enterostomy from the proximal jejunum to the pancreaticobiliary (PB)
limb. Repeat enteroscopy with a slim colonoscope failed to enter the PB
limb despite multiple attempts due to difficult angulation and looping
in the stomach. A rigidizing overtube placed over the colonoscope
allowed the scope to advance to the HJ without looping in the stomach
and provided improved control up the ascending PB limb. The colonoscope
then deployed a stone extraction balloon to remove biliary duct stones.
According to the article, this case demonstrates the use of a
rigidizing overtube to prevent looping and assist with complex stone
removal via ERCP in altered anatomy.
---------------------------------------------------------------------------
\90\ Abadir, A., Park, N., Eng, D. J., Lee, D., & Samarasena, J.
(2020). S2330 Altered Anatomy ERCP Using a Novel Dynamic Rigidizing
Overtube. Official journal of the American College of
Gastroenterology[verbar] ACG, 115, S1235.
---------------------------------------------------------------------------
While the applicant has provided articles that describe the
clinical use of the Pathfinder[supreg] in challenging procedures, the
majority of the articles are clinical case series which do not
necessarily allow for a clear comparison with common mediation
strategies.\91\ Additionally, the applicant identified specific
procedures for using the Pathfinder[supreg] when the physician needs to
control looping or enhance endoscope tip control to successfully
complete the procedure.\92\ The applicant has not provided studies
comparing the efficacy of the Pathfinder[supreg] with other
rigidization devices although the applicant has noted the existence of
such devices. Furthermore, all the clinical case study series presented
in the applicant's articles were based on small sample sizes. There are
other devices available which can help assist the Endoscopist in
procedures which are difficult to perform. We have a concern that there
has not been adequate comparison to other available devices used for
similar indication. We ask for public comment on whether Pathfinder
shows superiority over the existing devices/methods used in cases of
endoscope looping and abnormal anatomy.
---------------------------------------------------------------------------
\91\ For example, repeat colonoscopy with a different sedation
method, different instruments and/or different physicians, double-
contrast barium enema, CT colonography, overtube-assisted
colonoscopy, double-balloon enteroscopy and colonoscopy, single-
balloon enteroscopy, integrated inflated balloon, spiral overtubes,
colon capsule endoscopy, C-scan Cap imaging system, and/or robotic
colonoscopes). See Franco, D. L., Leighton, J. A., & Gurudu, S. R.
(2017). Approach to Incomplete Colonoscopy: New Techniques and
Technologies. Gastroenterology & hepatology, 13(8), 476-483.
\92\ According to the applicant, the Pathfinder[supreg] is used
for the following procedures: difficult colonoscopy, endoscopic
mucosal resection (EMR)/endoscopic submucosal dissection (ESD) of
colon, EMR/ESD of the stomach, enteroscopy (both antegrade and
retrograde), altered anatomy ERCP, and endoscopic ultrasonography in
the colon.
---------------------------------------------------------------------------
Finally, with respect to the two articles 93 94
presented to support the substantial clinical improvement claim in
reducing endoscopists' workload during endoscopy procedures; in both
articles, the authorships were identical for the same study center and
time frame, and there were only two participating endoscopists.
Therefore, it may be difficult to make comparisons due to the lack of a
diverse pool of endoscopists. Additionally, we note that factors such
as center and clinical staff characteristics in both studies are
difficult to control, and it is difficult to determine if observed
differences resulted from the Pathfinder[supreg] or from confounding
variables. Furthermore, we note there is potential for some level of
selection bias if providers are allowed to select the manner and order
in which patients are treated, and thereby potentially influence
outcomes seen in these studies.
---------------------------------------------------------------------------
\93\ Abadir, A., Park, N., Eng, D. J., Chehade, N. E. H., &
Samarasena, J. (2020, October). A Novel Dynamic Rigidizing Overtube
Significantly Eases Difficult Colonoscopy. American Journal of
Gastroenterology (Vol. 115, pp. S83-S83). Two Commerce Square, 2001
Market St., Philadelphia, PA 19103 USA: Lippincott Williams &
Wilkins.
\94\ Park, N., Abadir, A., Eng, D., Chehade, N. E. H., &
Samarasena, J. (2020). S0972 Enteroscopy Enabled Using a Novel
Dynamic Rigidizing Overtube: An Initial Single Center Experience.
Official journal of the American College of
Gastroenterology[verbar]ACG, 115, S495-S496.
---------------------------------------------------------------------------
We invite public comments on whether the Pathfinder[supreg] meets
the substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the
Pathfinder[supreg] would be reported with the HCPCS codes listed in
Table 37.
BILLING CODE 4120-01-P
[[Page 44612]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.044
[[Page 44613]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.045
[[Page 44614]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.046
BILLING CODE 4120-01-C
[[Page 44615]]
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 $695 for Pathfinder[supreg] Endoscope
Overtube is 87.57 percent of the applicable APC payment amount for the
service related to the category of devices of $793.65 (($695/$793.65) x
100 = 87.57 percent). Therefore, we believe the Pathfinder[supreg]
Endoscope Overtube 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 $695 for the
Pathfinder[supreg] Endoscope Overtube is 54,724.41 percent of the cost
of the device-related portion of the APC payment amount for the related
service of $1.27 (($695/$1.27) x 100 = 54,724.41 percent). Therefore,
we believe that the Pathfinder[supreg] Endoscope Overtube 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 $695 for the Pathfinder[supreg] Endoscope Overtube
and the portion of the APC payment amount for the device of $1.27 is
87.41 percent of the APC payment amount for the related service of
$793.65 ((($695-$1.27)/$793.65) x 100 = 87.41 percent). Therefore, we
believe that the Pathfinder[supreg] meets the third cost significance
requirement.
We are inviting public comment on whether the Pathfinder[supreg]
Endoscope Overtube meets the device pass-through payment criteria
discussed in this section, including the cost criterion for device
pass-through payment status.
(6) The Uretero1
STERIS submitted an application for a new device category for
transitional pass-through payment status for the Uretero1 for CY 2023.
The applicant states that the Uretero1 is a sterile, single-use,
disposable digital flexible ureteroscope. According to the applicant,
the Uretero1\TM\ Ureteroscope System consists of the following
components: (1) the Uretero1, a sterile, single-use flexible disposable
digital flexible ureteroscope; and (2) Vision 1, a touch screen camera
control unit, with a high-resolution HD imaging system.
Per the applicant, the single use ureteroscope, the Uretero1,
consists of: (1) handle, to hold scope (made of polycarbonate, and has
no patient contact); (2) articulation lever, an angulated distal tip
(polycarbonate 10 percent glass filled, and has no patient contact);
(3) handle button, a button to take pictures, video, and zoom live
image (made of silicone, and has no patient contact); (4) accessory
Port with port cover to prevent backflow during procedures, pass
instruments (Makrolon 2458, Indirect/limited patient contact); (5)
irrigation port, for fluid access (Makrolon 2458, which has indirect or
limited patient contact); (6) flexible shaft (Pebax, made of
polyurethane, and has patient contact); (7) shaft strain relief
(Santoprene and has contact with limited mucosal membrane); (8)
bending/articulation section, which bends the tip of the scope to move
the camera (made of stainless-steel compression coils and pull cables
and has no patient contact); (9) distal tip, (ABS, and has patient
contact); (10) instrument channel (PFA and has indirect and limited
patient contact); (11) illumination fiber (made of polymethyl
methacrylate (PMMA)/fluorinated polymer and has no patient contact);
and (12) the camera (consists of glass and has limited mucosal membrane
patient contact), and connector cables and plugs, which have no patient
contact.
The Uretero1\TM\ Ureteroscope System is a software-controlled
system that consists of the Vision1 (Touch Screen Camera Control Unit
(CCU)) and the sterile, single-use high-resolution flexible
ureteroscope. Per the applicant, the Uretero1 is inserted to find the
causes of problems in the ureters or kidney, and to visualize organs,
cavities, and canals in the urinary tract by transurethral or
percutaneous access routes. The applicant notes the Uretero1 can also
be used with endoscopic accessories to perform various diagnostic and
therapeutic procedures in the urinary tract, such as kidney stone
management (treatment of nephrolithiasis).
According to the applicant, the device is used by urologists during
ureteroscopy, a minimally invasive outpatient procedure typically
performed under general anesthesia. The applicant states that once the
patient is prepped and anesthesia takes effect, the urologist inserts a
rigid scope into the urethra, to the bladder to examine the ureteral
orifices. Per the applicant, a guidewire is placed through the
instrument channel of the rigid scope via fluoroscopic guidance through
the orifice, up to the ureter. The applicant states that the rigid
scope is removed, and the access sheath is advanced over the inserted
guidewire. According to the applicant, the position of the access
sheath is confirmed via fluoroscopy, and the obturator is removed from
the access sheath, as well as the guidewire (if desired by the
surgeon). The applicant states that the flexible ureteroscope is
inserted through the access sheath up into the ureters and kidneys.
During a procedure, an appropriate sterile solution is passed through
the instrument channel of the ureteroscope to fill the bladder to allow
greater visibility. If a kidney stone is located (depending on its
size), the surgeon will perform laser lithotripsy to fragment the stone
into smaller pieces, then remove the fragments.
Per the applicant, the Uretero1 can be used for 4 hours (exceeding
the average procedure time of 60 mins), and the device has a timer
which notifies the user at three separate intervals of remaining use
time: one at 60 minutes, the next at 30 minutes, and the last at 5
minutes of remaining use time. According to the applicant, when the 4
hours of usage time has elapsed, and if the scope is still plugged in,
the user will be advised via a message on the screen that a new scope
should be inserted and the current ureteroscope will no longer produce
a live image. The applicant states that the scope timer only counts
down while the device is powered on and plugged in; if it is unplugged,
the time stops.
With respect to the newness criterion at Sec. 419.66(b)(1), on
November 23, 2021, the applicant received 510(k) clearance from FDA to
market the Uretero1 to visualize organs, cavities, and canals in the
urinary tract via transurethral or percutaneous access routes. The
applicant submitted its application for consideration as a new device
category for transitional pass-through payment status for the Uretero1
on March 1, 2022, which is within 3 years of the date of the initial
FDA marketing authorization. We are inviting public comments on whether
the Uretero1 meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the Uretero1 is integral to the service
provided, is used for one patient only and comes in contact with human
[[Page 44616]]
tissue when it is inserted to visualize organs, cavities, and canals in
the urinary tract.\95\ Per the applicant, the Uretero1 is reasonable
and necessary to diagnose problems in the ureters and kidneys via
transurethral or percutaneous access routes. The applicant claims that
the Uretero1 meets the device eligibility requirements of Sec.
419.66(b)(4) because it is not an instrument, apparatus, implement, or
item for which depreciation and financing expenses are recovered, and
it is not a supply or material furnished incident to a service. We are
inviting public comments on whether the Uretero1 meets the eligibility
criteria at Sec. 419.66(b).
---------------------------------------------------------------------------
\95\ Uretero1 Brochure_FINAL.pdf.
---------------------------------------------------------------------------
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 the 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 describes the Uretero1 as a single use, disposable, digital
flexible ureteroscope that is used in urologic procedures
(ureteroscopy) that diagnose and treat conditions of the urinary tract
(e.g., kidney stones, blockage, polyps, abnormal growths, etc.).
According to the applicant, a possible existing pass-through code is
C1748 (Endoscope, single use (i.e., disposable), upper GI, imaging/
illumination device (insertable)), was made effective July 1, 2020.\96\
The applicant notes that while this category is for a single use
device, it is only appropriate for GI imaging, and more specifically,
for endoscopic retrograde cholangiopancreatography (ERCP) procedures.
Therefore, the applicant asserts this category would not apply to a
single use, disposable, ureteroscope for use in urological procedures.
We are inviting public comment on whether the Uretero1 meets the device
category criterion.
---------------------------------------------------------------------------
\96\ Uretero1 Brochure_FINAL.pdf.
---------------------------------------------------------------------------
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 for the indication covered by the
Breakthrough Device designation. The applicant stated that the Uretero1
represents a substantial clinical improvement over existing technology.
With respect to this criterion, the applicant submitted studies that
examined the impact of the Uretero1 on various diagnostic and
therapeutic procedures in the urinary tract.
According to the applicant, the Uretero1 is a single use,
disposable, digital flexible ureteroscope that is used in urologic
procedures (ureteroscopy) to diagnose and treat conditions of the
urinary tract, such as kidney stones, blockages, polyps, and abnormal
growths. Broadly, the applicant outlined the following areas for which
it claimed the Uretero1 would provide a substantial clinical
improvement: (1) prevention of infection transmission, (2) reduced
contamination risk, (3) improved deflection performance over reusable
ureteroscopes, (4) reduced hospitalization rate and use of antibiotic
therapy, (5) reduced complication rate, (6) reduced post-operative
infection rate, (7) reduced procedure delay, (8) increased patient
safety and education, and (9) improved patient outcome when the device
is used to perform various diagnostic and therapeutic procedures and
treatment in the urinary tract. The applicant provided five articles,
an FDA advisory letter, and a set of manufacturer's instructions for
cleaning and reprocessing flexible endoscopes specifically for the
purpose of addressing the substantial clinical improvement criterion.
The applicant provided a journal pre-proof and two articles to
support its claim that the Uretero1 is effective at preventing the
transmission of infection. Each of these sources examine the steps
required in the complex and time-consuming process to clean and
sterilize flexible reusable ureteroscopes so they are fully reprocessed
for use. The sources also describe the negative sequelae that follow
instances of inefficient and or incomplete device reprocessing. The
journal pre-proof of a literature review by Cori Ofstead et al.
outlines the steps used to reprocess reusable ureteroscopes.\97\
Studies summarized within this literature review described several
instances of negative outcomes when ureteroscopes were processed
incorrectly or inefficiently. As part of that literature review,
Kumarage et al. described an outbreak of Pseudomonas aeruginosa later
found to be due to an infected flexible reusable ureteroscope that had
been used.\98\ Fourteen patients of the 40 who were exposed were
infected (35 percent attack rate). The root cause of the infected
ureteroscopes was attributed to substandard reprocessing of the
devices, including processing that was delayed overnight. Kumarage et
al. also noted a separate outbreak of a gram-positive cocci which was
traced to the use of five ureteroscopes after five patients presented
to the ED with urinary tract infections (UTIs) due to the same gram-
positive cocci after having each undergone ureteroscopy. Research into
the underlying causes and possible sources of the device contamination
found that there had been breakdowns in the reprocessing steps.
---------------------------------------------------------------------------
\97\ Cori L. Ofstead MSPH, Krystina M. Hopkins MPH, Abigail G.
Smart MPH, John E. Eiland RNMS, Harry P. Wetzler MD, MSPH, Seth K.
Bechis MDMS. Reprocessing effectiveness for flexible ureteroscopes:
A critical look at the evidence. Urology (2022), doi: https://doi.org/10.1016/j.urology.2022.01.033.
\98\ Kumarage J. Khonyongwa K., Khan A., Desai, N., Hoffman P.,
Taori, SK. Transmission of multidrug resistant Pseudomonas
aeruginosa between two flexible ureteroscopes and an outbreak of
urinary tract infection: The fragility of endoscope decontamination.
J Hosp Infect. 2019; 102(1):89-94.
---------------------------------------------------------------------------
Another article included in the literature review by Ofstead et
al.\99\ describes the risks associated with inefficient processing of
reusable ureteroscopes using a time-driven activity-based costing
(TDABC).\100\ This article, by Isaacson et al. (2017), notes the time
and costs involved in the decontamination and sterilization processes
of reusable flexible ureteroscopes.\101\ The authors also measured the
time when reprocessing steps were performed inefficiently or were
delayed as a result of repairs needed for any damaged ureteroscopes.
After following ten ureteroscopes through the reprocessing steps
required to fully clean them and determined, via process mapping, that
the average reprocessing time was 229.0 74.4 minutes.
According to the authors'
[[Page 44617]]
calculations, drying the ureteroscopes was the single most time-
consuming step and took 126.5 55.7 minutes, and was
further dependent on the optimal location and position of the
ureteroscopes. Ureteroscopes that needed repair required approximately
143 minutes, causing further delays to availability of the devices.
---------------------------------------------------------------------------
\99\ Ibid.
\100\ TDABC is a process that uses process mapping in
conjunction with activity-based costing to calculate and maximize
efficiency of complex processes. It was developed by Kaplan and
Anderson of the Department of Nephro-Urology, Nagoya City University
Graduate School of Medical Sciences, Nagoya, Japan.
\101\ Isaacson D, Ahmad T, Metzler I, Tzou DT, Taguchi K,
Usawachintachit M, Zetumer S, Sherer B, Stoller M, Chi T. Defining
the costs of reusable flexible ureteroscope reprocessing using time-
driven activity-based costing. J Endourol. 2017;31(10):1026-1031.
doi: 10.1089/end.2017.0463. Epub 2017 Sep 20. PMID: 28830223; PMCID:
PMC5652038.
---------------------------------------------------------------------------
To further support its claim that the Uretero1 can prevent
infection transmission, the applicant cited an April 1, 2021, advisory
letter to providers from FDA that outlines concerns about the
effectiveness of reprocessing reusable urologic endoscopes.\102\ In the
letter, FDA confirms it has received over 450 Medical Device Reports
(MDRs) describing patient infections associated with reprocessing of
reusable devices, which include ureteroscopes. FDA is still
investigating these episodes but notes the importance of following
manufacturer's instructions for device reprocessing. The applicant also
references a report by Grandview Research which notes the market for
disposable endoscopes is expected to experience compound growth at a
rate of 17 percent between 2022 and 2030, largely due to the growing
cross-contamination issue associated with reusable endoscopes.\103\ Per
the applicant, the projected market growth of disposable cystoscopes,
endoscopes, and ureteroscopes is expected to continue to rise over the
forecast period due to the advancement in the design of disposable
devices and related to the risk of nosocomial infections following
ureteroscopy procedures.\104\
---------------------------------------------------------------------------
\102\ Food and Drug Administration. Infections associated with
reprocessed urological endoscopes--Letter to health care providers.
Published April 1, 2021. Available from: https://www.fda.gov/medical-devices/letters-health-care-providers/infections-associated-reprocessed-urological-endoscopes-letter-health-care-providers.
\103\ Grand View Research. ``Disposable Endoscopes Market Size,
Share & Trends Analysis Report by Application (Bronchoscopy, ENT
Endoscopy), By End-use (Hospitals, Clinics) < By Region (Europe,
North America, APAC), and Segment Forecasts, 2022-2030. Published
February 2022.
\104\ Ibid.
---------------------------------------------------------------------------
To support its second claim that the Uretero1 reduces risk of
contamination, the applicant again cited the literature review by
Ofstead et al.\105\ Referencing the article by Lee et al., titled
``Increasing potential risks of contamination from repetitive use of
endoscope,'' \106\ Ofstead noted that wear and tear of the repeated-use
devices contributes to the likelihood that infectious material will
remain attached to the device even after reprocessing, as found during
Lee et al.'s simulated-use study. Therefore, and per the applicant, the
single use Uretero1 eliminates the risk of contamination.
---------------------------------------------------------------------------
\105\ Cori L. Ofstead MSPH, Krystina M. Hopkins MPH, Abigail G.
Smart MPH, John E. Eiland RNMS, Harry P. Wetzler MD, MSPH, Seth K.
Bechis MDMS. Reprocessing effectiveness for flexible ureteroscopes:
A critical look at the evidence. Urology (2022), doi: https://doi.org/10.1016/j.urology.2022.01.033.
\106\ Lee DH, Kim DB, Kim HY, Baek HS, Kwon SY, Lee MH, Park JC.
Increasing potential risks of contamination from repetitive use of
endoscope. Am J Infect Control. 2015 May 1;43(5): e13-7. doi:
10.1016/j.ajic.2015.01.017. Epub 2015 Feb 25. PMID: 25726130.
---------------------------------------------------------------------------
The applicant's third claim with regard to the substantial clinical
improvement offered by the Uretero1 is in relation to its improved
deflection performance over that of reusable devices. When used in the
context of describing ureteroscopes, ``deflection'' refers to the
adjustability of the device, which enables the surgeon to see more of
the urinary tract.\107\ Therefore, improved deflection supports the
surgeon's ability to access the kidneys and ureters and perform various
diagnostic and therapeutic procedures in the urinary tract. The
applicant cited a literature review by Ventimiglia et al. to support
its claim.\108\ Ventimiglia et al. conducted a literature review on
available reusable flexible ureteroscopes and single-use flexible
ureteroscopes with a focus on the related costs of each, in terms of
performance, maintenance, and reprocessing. As part of its review,
Ventimiglia et al. noted that the deflection capability of the Olympus
URF-V and Karl Storz Flex-Xc, both single-use flexible ureteroscopes,
was equivalent to the deflection capability of reusable flexible
ureteroscopes. Ventimiglia et al. did not mention the Uretero1, nor its
deflection capability, in the study. Of note, Ventimiglia's literature
review referenced the original study by Hennessey et al., which
compared the single-use flexible devices with the reusable flexible
devices, and which found the performance of the single-use device was
equivalent, if not better than the reusable flexible
ureteroscopes.\109\ The Uretero1 device was not included as a
comparison in this study either.
---------------------------------------------------------------------------
\107\ Rajamahanty, S., & Grasso, M. (2008). Flexible
ureteroscopy update: indications, instrumentation and technical
advances. Indian journal of urology: IJU: journal of the Urological
Society of India, 24(4), 532-537. https://doi.org/10.4103/0970-1591.44263.
\108\ Ventimiglia E, God[iacute]nez AJ, Traxer O, Somani BK.
Cost comparison of single use versus reusable flexible ureteroscope:
A systematic review. Turk J Urol 2020; 46(Supp. 1): S40-S45.
\109\ Hennessey DB, Fojecki GL, Papa NP, Lawrentschuk N, Bolton
D. Single-use disposable digital flexible ureteroscopes: an ex vivo
assessment and cost analysis. BJU Int. 2018 May;121 Suppl 3:55-61.
doi: 10.1111/bju.14235. PMID: 29656467.
---------------------------------------------------------------------------
The applicant referred to a study by Bozzini et al.\110\ to support
its fourth, fifth, and sixth claims that the Uretero1 device
demonstrates substantial clinical improvement over existing devices.
These claims are that the Uretero1 enables, respectively: reduced
hospitalization rate and antibiotic therapy, reduced complication rate,
and reduced post-operative infection rate. Using a multicenter,
randomized, clinical trial study format, Bozzini et al. enrolled 180
patients who had a renal stone and were scheduled to receive Retrograde
Intrarenal Surgery (RIRS) into two groups: Group A (90 patients)
underwent treatment with a reusable flexible ureteroscope and Group B
(90 patients) (underwent treatment with a disposable flexible
ureteroscope). While the outcome of the surgical procedure was not
significantly different across the two groups (stone free rates of 86.6
percent for Group A and 90.0 percent for Group B, p=0.11), the number
of hospitalization days and of antibiotic therapy were higher for Group
A (p<=0.05), those subjects who had been in the reusable flexible
ureteroscope trial group. In addition, Group A patients experienced
more complications (8.8 percent) than Group B patients (3.3 percent,
and with a p=value of <=0.05), and Group A patients had more major
complications. Finally, the overall postoperative infection rate was
16.6 percent for Group A patients compared with 3.3 percent for Group B
patients (p<=0.05). It was noted that none of the Group B patients
developed urosepsis, while three patients in Group A developed
urosepsis (p<0.05).
---------------------------------------------------------------------------
\110\ Bozzini G, Filippi B, Alriyalat S, Calori A, Besana U,
Mueller A, Pushkar D, Romero-Otero J, Pastore A, Sighinolfi MC,
Micali S, Buizza C, Rocco B. Disposable versus Reusable
Ureteroscopes: A Prospective Multicenter Randomized Comparison. Res
Rep Urol. 2021 Feb 10; 13:63-71. doi: 10.2147/RRU.S277049. PMID:
33604311; PMCID: PMC7882796.
---------------------------------------------------------------------------
The applicant referred to an article in OR Manager in support of
its seventh and ninth claims that the Uretero1 single-use flexible
ureteroscope reduces procedure delays and increases patient
safety.\111\ In addition to the discussion about the introduction of
contamination during reprocessing of reusable flexible ureteroscopes,
the article notes the high frequency of failures during procedures,
resulting in the need for repair. Mathias specifically references a
prospective study by Ofstead et al. (2017) conducted at two large
healthcare facilities in the Midwest, in which 16 ureteroscopes
[[Page 44618]]
were cultured and visually inspected after they had been cleaned and
sterilized with hydrogen peroxide gas.\112\ In this study, 100 percent
of the devices were found to have substantial protein contamination,
and two had visible bacteria, while others had debris, oily deposits,
and residual fluid discoloration.\113\ The Mathias article also
describes the ``high frequency of damage and repairs'' for reusable
flexible ureteroscopes, noting that they then need to be sent out for
repairs, resulting in delayed procedures, interrupted workflow, and
wasted resources. Per Ofstead, the annual cost per ureteroscope is
between $4,000 and $11,000, and findings from the same study showed
that the average number of uses between repairs was 19.\114\ The
Mathias article summarizes the steps that can be taken to reduce risks
related to ureteroscope contamination and to focus on patient safety.
In addition to following manufacturer's steps for reprocessing the
devices, Ofstead suggests the use of single-use endoscopes and
accessories which are currently available in the list of
recommendations.
---------------------------------------------------------------------------
\111\ Mathias, JM. ``Greater vigilance needed to combat
ureteroscope contamination''. OR Manager: December 2017;(33) 12:1-5.
\112\ Ofstead CL, Heymann OL, Quick MR, Johnson EA, Eiland JE,
Wetzler HP. The effectiveness of sterilization for flexible
ureteroscopes: A real-world study. Am J Infect Control. 2017 Aug
1;45(8):888-895. doi: 10.1016/j.ajic.2017.03.016. Epub 2017 Jun 15.
PMID: 28625700.
\113\ Ibid.
\114\ Mathias, JM. ``Greater vigilance needed to combat
ureteroscope contamination''. OR Manager: December 2017;(33) 12:1-5.
---------------------------------------------------------------------------
Finally, the applicant referenced an FDA advisory letter to health
care providers published April 1, 2021, which the applicant stated was
released to raise awareness around the risk of infections associated
with reprocessing urological endoscopes (e.g., ureteroscopes), although
there is no mention of single use ureteroscopes. The applicant pointed
to another FDA letter in support of single use duodenoscopes to reduce
the risk of infection. The applicant cited these FDA letters in support
of its eighth claim that the Uretero1 can be responsible for increased
patient education, and patient safety.\115\
---------------------------------------------------------------------------
\115\ Food and Drug Administration. Infections associated with
reprocessed urological endoscopes--Letter to health care providers.
Published April 1, 2021. Available from: https://www.fda.gov/medical-devices/letters-health-care-providers/infections-associated-reprocessed-urological-endoscopes-letter-health-care-providers.
Accessed August 17, 2021.
---------------------------------------------------------------------------
In summary, the applicant references these citations to support its
assertions that the Utero1 single-use disposable digital flexible
ureteroscope presents a substantial clinical improvement over existing
devices. We note that many studies included provide details regarding
the importance of following established reprocessing guidelines for
reusable devices. The evidence provided in the clinical studies
emphasizes the risks associated with reprocessing reusable devices.
However, none of the studies the applicant includes reference another
disposable device as a comparator against which to evaluate and assess
the Uretero1. While we find that the source articles provide background
about multiple risks associated with reprocessing reusable devices, we
would welcome additional evidence demonstrating a comparison of the
Uretero1's performance against other similarly disposable devices. We
also note that the applicant cited an FDA news release \116\ in support
of single use duodenoscopes to reduce risk of infection, but this is
not the device in question. Additionally, the previously referenced FDA
advisory letter \117\ regarding ureteroscopes does not mention single-
use devices, and it is not clear how the recommendations in the letter
support the applicant's claims of substantial clinical improvement
related to the use of the Uretero1.
---------------------------------------------------------------------------
\116\ Food and Drug Administration. (2019, December 13). FDA
clears first fully disposable duodenoscope, eliminating the
potential for infections caused by ineffective reprocessing. [News
release]. Retrieved from https://www.fda.gov/news-events/press-
announcements/fda-clears-first-fully-disposable-duodenoscope-
eliminating-potential-infections-caused-
ineffective#:~:text=The%20U.S.%20Food%20and%20Drug,and%20other%20uppe
r%20GI%20problems.
\117\ Food and Drug Administration. Infections associated with
reprocessed urological endoscopes--Letter to health care providers.
Published April 1, 2021. Available from: https://www.fda.gov/medical-devices/letters-health-care-providers/infections-associated-reprocessed-urological-endoscopes-letter-health-care-providers.
Accessed August 17, 2021.
---------------------------------------------------------------------------
We are inviting public comments on whether the Uretero1 meets the
substantial clinical improvement criterion.
The third criterion for establishing a device category, at Sec.
419.66(c)(3), requires us to determine that the cost of the device is
not insignificant, as described in Sec. 419.66(d). Section 419.66(d)
includes three cost significance criteria that must each be met. The
applicant provided the following information in support of the cost
significance requirements. The applicant stated that the Uretero1 would
be reported with the following HCPCS codes listed in Table 38 below.
BILLING CODE 4120-01-P
[[Page 44619]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.047
BILLING CODE 4120-01-C
To meet the cost criterion for device pass-through payment status,
a device must pass all three tests of the cost criterion for at least
one APC. As we explained in the CY 2005 OPPS final rule with comment
period (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. For our
calculations, we used APC 5374--Level 4 Urology and Related Services,
which had a CY 2021 payment rate of $3,076.34 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 52344 had a device offset amount of $475.29 at
the time the application was received. According to the applicant, the
cost of the Uterero1 is $1,500.
Section 419.66(d)(1), the first cost significance requirement,
provides that the estimated average reasonable cost of devices in the
category must exceed 25 percent of the applicable APC payment amount
for the service related to the category of devices. The estimated
average reasonable cost of $1,500 for Uretero1 is 48.76 percent of the
applicable APC payment amount for the service related to the category
of devices of $3,076.34 (($1,500/$3,076.34) x 100 = 48.76 percent).
Therefore, we believe the Uretero1 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
[[Page 44620]]
exceed the cost of the device-related portion of the APC payment amount
for the related service by at least 25 percent, which means that the
device cost needs to be at least 125 percent of the offset amount (the
device-related portion of the APC found on the offset list). The
estimated average reasonable cost of $1,500 for Uretero1 is 315.60
percent of the cost of the device-related portion of the APC payment
amount for the related service of $475.29 (($1,500/$475.29) x 100 =
315.60 percent). Therefore, we believe that the Uretero1 meets the
second cost significance requirement.
The third cost significance requirement, at Sec. 419.66(d)(3),
provides that the difference between the estimated average reasonable
cost of the devices in the category and the portion of the APC payment
amount for the device must exceed 10 percent of the APC payment amount
for the related service. The difference between the estimated average
reasonable cost of $1,500 for the Uretero1 and the portion of the APC
payment amount for the device of $475.29 is 33.31 percent of the APC
payment amount for the related service of $3,076.34 ((($1,500-$475.29)/
$3,076.34) x 100 = 33.31 percent). Therefore, we believe that the
Uretero1 meets the third cost significance requirement.
We are inviting public comment on whether the Uretero1 meets the
device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
B. Proposal to Publicly Post OPPS Device Pass-Through Applications
As noted in section X of this proposed rule, applicants seeking
OPPS transitional pass-through status for medical devices (``OPPS
device pass-through'') must submit an application to CMS containing
certain information.\118\ The application is currently undergoing the
Paperwork Reduction Act reapproval process, which has notice and
comment periods separate from this proposed rule. The 60-day notice was
published in the Federal Register on April 29, 2022 (87 FR 25488). CMS
accepts OPPS device pass-through applications on an ongoing basis
throughout the year, but must receive complete applications
sufficiently in advance of the first calendar quarter in which OPPS
device pass-through status is sought to allow time for analysis,
decision-making, and systems changes. In particular, CMS must receive a
completed application and all additional information by the first
business days in March, June, September, or December of a year for the
earliest possible potential pass-through effective dates of July 1,
October 1, January 1, or April 1, respectively, of that year. We post
complete application information and the timeframes for submitting
applications on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/passthrough_payment.
---------------------------------------------------------------------------
\118\ The application form, titled ``Process and Information
Required to Apply for Additional Device Categories for Transitional
Pass-Through Payment Status Under the OPPS,'' describes the process
and information required to apply for OPPS device-pass-through
status for a medical device and is available on CMS's website at
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf. Applicants must submit
such information as: proposed name or description of additional
category; trade/brand names of any known devices fitting the
proposed additional category; list of all established categories
used presently or previously for pass-through payment that describe
related or similar products, along with an explanation as to why the
a category does not encompass the nominated device(s); detailed
description of clinical uses of each nominated device; a complete
description of the nominated devices, including, but not limited to,
what it is, what it does, and how it is used; its clinical
characteristics; the HCPCS codes for procedures with which it is
used; substantial clinical improvement information; sales and
marketing information; cost information; FDA approval information;
contact information; and other information CMS may require.
---------------------------------------------------------------------------
In the CY 2016 OPPS/ASC final rule with comment period, we adopted
a policy that beginning in CY 2016, all OPPS device pass-through
applications submitted through the quarterly subregulatory process
would be subject to notice-and-comment rulemaking in the next
applicable OPPS annual rulemaking cycle, including those that were
approved upon quarterly review (80 FR 70418). All applications that are
approved upon quarterly review are automatically included in the next
applicable OPPS annual rulemaking cycle, while submitters of
applications that are not approved upon quarterly review have the
option of having their application discussed in the next applicable
OPPS annual rulemaking cycle or withdrawing their application from
consideration entirely. We explained that no special reconsideration
process would be necessary, as no denial decision would be made except
through the annual rulemaking process. Applicants are able to submit
new data, such as clinical trial results published in a peer-reviewed
journal, for consideration during the public comment process for the
proposed rule. We explained that this process allows those applications
that we are able to determine meet all 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.
In the proposed rule, CMS summarizes the information contained in
the application, including the applicant's explanation of what the
device does, the cost of the device, information about device's FDA
approval/clearance, and the applicant's assertions and supporting data
on how the device meets the OPPS device pass-through payment criteria
under Sec. 419.66. In summarizing this information for inclusion in
the proposed rule, CMS restates or paraphrases information contained in
the application and attempts to avoid misrepresenting or omitting any
of an applicant's claims. CMS also tries to ensure that sufficient
information is provided in the proposed rule to facilitate public
comments on whether the medical device meets the OPPS device pass-
through criteria. Currently, however, CMS does not make the
applications themselves, as submitted by the applicants, publicly
available.
In the past, CMS has received requests from the public to access
and review the OPPS device pass-through applications to further
facilitate comment on whether a medical device meets the OPPS device
pass-through payment criteria. After considering this issue, we agree
that review of the original source information from the applications
for OPPS device pass-through status may help to inform public comment.
Further, making this information publicly available may foster greater
input from experts in the interested party community based on their
review of the completed application forms and related materials.
Accordingly, as we discuss further in this section, we believe that
providing additional information to the public by posting the
applications and related materials online may help to further engage
the public and foster greater input and insights on the various new
medical devices and technologies presented annually for consideration
for OPPS device pass-through payment.
We also believe that posting the applications online would reduce
the risk that we may inadvertently omit or misrepresent relevant
information submitted by applicants, or be perceived as misrepresenting
such information, in our summaries in the rules. It also would
streamline our evaluation process, including the identification of
critical questions in the proposed rule, particularly as the number and
complexity of the device pass-through
[[Page 44621]]
applications we receive have been increasing over time. That is, by
making the applications available to the public online, we would afford
more time for CMS to process and analyze the supporting data and
evidence in the applications rather than devoting significant time and
resources to summarizing information from the applications in the rule.
Therefore, to increase transparency, enable increased interested
party engagement, and further improve and streamline our evaluation
process, we propose to publicly post future applications for OPPS
device pass-through payment online.\119\ Specifically, beginning with
applications submitted on or after January 1, 2023, we propose to post
online the completed OPPS device pass-through application forms and
related materials (e.g., attachments, supportive materials) we receive
from applicants. Additionally, we propose to post online information
acquired subsequent to the application submission (e.g., updated
application information, additional clinical studies, etc.). We propose
that we would publicly post all completed application forms and related
materials at the same time that the proposed rule is issued, which
would afford interested parties the full public comment period to
review the information provided by the applicant in its application in
conjunction with the proposed rule. We are not proposing to change our
policy that applicants whose applications are not approved through the
quarterly review process may elect to withdraw their application from
consideration in the next applicable rulemaking cycle.
---------------------------------------------------------------------------
\119\ CMS is not proposing to make drug and biological pass-
through applications public because the nature of the drug and
biological application does not necessitate such an action.
---------------------------------------------------------------------------
With respect to copyrighted materials, we propose that on the
application form itself, the applicant would be asked to provide a
representation that the applicant owns the copyright or otherwise has
the appropriate license to make all the copyrighted material included
with its application public. For any material included with the
application that the applicant indicates is copyrighted and/or not
otherwise releasable to the public, we propose that the applicant must
either provide a link to where the material can be accessed or provide
an abstract or summary of the material that CMS can make public, and
CMS will then post that link or abstract or summary online, along with
the other posted application materials. We invite comments on this
proposal.
We note that at times applicants furnish information marked as
proprietary or trade secret information along with their applications
for OPPS device pass-through payment. Currently, the OPPS device pass-
through application instructions specify that data provided in the
application may be subject to disclosure and instructs the applicant to
mark any proprietary or trade secret information so that CMS can
attempt, to the extent allowed under Federal law, to keep the
information protected from public view.\120\ Consistent with the
current application instructions, should an applicant submit such
information as part of its application, CMS will attempt, to the extent
allowed by Federal Law, to keep this information protected from public
view. We emphasize, however, that it is the applicant's responsibility
to clearly identify data and information as such in its application.
---------------------------------------------------------------------------
\120\ See Guidance and Instructions for OPPS Device Pass-Through
Applications (Updated 2/1/2022), available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Downloads/catapp.pdf.
---------------------------------------------------------------------------
Additionally, we note that in the past we have received
applications in which all the data and information are marked as
proprietary or confidential, or certain information, for example,
information in support of a claim of substantial clinical improvement,
is marked as such. In such cases, we reiterate that we generally would
not be able to consider that data and information when determining
whether a device meets the criteria for OPPS Device Pass-through
payments. Our process provides for public input, so it is important
that we provide the information needed for the public to meaningfully
comment on the OPPS Device Pass-through payment applications, including
the claims applicants make about meeting the OPPS Device Pass-through
payment criteria. This proposal would not change the current timeline
or evaluation process for OPPS device pass-through payments, the
criteria used to assess applications, or the deadlines for various data
submissions. Additionally, we do not expect our proposal would place
additional burdens on future applicants because we are not proposing to
change the information that must be submitted to apply for OPPS device
pass-through status, including the supplemental information that could
be furnished to support the application. As explained throughout this
section, the aim of this proposed policy change is to increase
accuracy, transparency, and efficiency for both CMS and interested
parties, not to make the OPPS device pass-through process more onerous
for applicants.
In connection with our proposal to post the OPPS device pass-
through applications online, we expect we would also include less
detail in the summaries of the device pass-through applications that we
include in the annual OPPS proposed and final rules, given that the
public would have access to the submitted applications themselves. We
will, however, continue to provide sufficient information in the rules
to facilitate public comments on whether a medical device meets the
OPPS device pass-through payment criteria. Specifically, we do not
anticipate summarizing in significant detail each OPPS device pass-
through application in the Federal Register as we have in the past,
given that the public would have access to the applications under our
proposal. In some instances, such as in the discussions of whether
devices meet the substantial clinical improvement criterion, we expect
to provide a more concise summary of the evidence or a more targeted
discussion of the applicant's claims about how that criterion is met
based on the evidence and supporting data (although this may vary
depending on the application, the medical device, and the nature of the
supporting materials provided). We expect that we would continue to
generally include, at a high level, the following information in the
proposed and final rules: the medical device and applicant name; a
description of what the device does; the cost significance calculation;
the FDA approval/clearance information; and a summary of the
applicant's assertions or claims. We also expect to provide more
succinct summaries in the proposed and final rules regarding the
applicant's assertions as to how the medical device meets the various
OPPS device pass-through criteria under Sec. 419.66. For example, we
would include the applicant's assertions as to why the medical device
meets the substantial clinical improvement criterion and a list of the
sources of data submitted in support of those assertions, along with
references to the application in support of this information. In the
proposed rule, we would also continue to provide discussion of the
concerns or issues we identified with respect to applications
submitted. In the final rule, we would continue to provide an
explanation of our determination of whether a medical device meets the
applicable OPPS device pass-through payment criteria. As noted, we
believe the proposal to
[[Page 44622]]
post online the completed application forms and other information
described previously would afford greater transparency during the
annual rulemaking for purposes of determining whether a medical device
is eligible for OPPS device pass-through payment.
We note that if we adopt this proposal in the final rule, we would
begin utilizing referring to publicly posted applications in CY 2024
rulemaking cycle, depending on when they are received. This would mean
that there would be some OPPS device pass-through applications (those
received as of December 31, 2022) that would follow the current process
and be described fully in the proposed rule consistent with our
historical practice, and other OPPS device pass-through applications
(those received after the effective date of January 1, 2023) that would
be summarized in the proposed rule with a cross-reference to the
publicly posted application, consistent with our new policy. If our
proposal is finalized effective January 1, 2023, we would allow
applicants that submit an OPPS device pass-through application prior to
December 31, 2022 to elect to have the application summarized and
publicly posted in lieu of a full CMS write-up. Where applicants do not
elect to have applications submitted prior to December 31, 2022 posted
publicly and summarized in the proposed rule, we would discuss device
pass-through applications in two different ways in the CY 2024 proposed
and final rules (either with full write-ups or summaries and cross-
references to the publicly posted applications, depending on when the
application was submitted). We believe our goals of increasing
transparency and ensuring there are sufficient CMS resources to review
the increasing numbers of applications are sufficiently important
justify use of two approaches for one year if our proposal is
finalized. Nonetheless, we also solicit comment on whether we should
consider an alternative implementation date of March 1, 2023, which
would mean that all OPPS device pass-through applications discussed in
the CY 2024 OPPS proposed and final rules would follow the current
process and would appear in the rule as a full write-up. Under this
alternative approach, CMS would begin publicly posting all OPPS device
pass-through applications and summarize and cross-reference the
applications beginning in the CY 2025 proposed and final rules
consistent with this policy.
We note that for many of the same reasons, we included a similar
proposal in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28355
through 28357) that, beginning with applications for FY 2024, we would
publicly post online new technology add-on payment applications and
certain related materials, as discussed further in that proposed rule.
Our goal in making these proposals under both the hospital OPPS and
IPPS is not only to increase accuracy, transparency, and efficiency in
the device pass-through and new technology add-on payment application
review process for both CMS and interested parties, but also to further
consistency, where possible, in our procedures and approach for
addressing and engaging the public on new technologies in our annual
rulemakings.
We are seeking public comment on our proposal to publicly post
online the completed OPPS device pass-through application forms and
supporting materials and updated application information submitted
subsequent to the initial application submission for OPPS device pass-
through payment, beginning January 1, 2023.
C. Proposed Device-Intensive Procedures
1. Background
Under the OPPS, prior to CY 2017, device-intensive status for
procedures was determined at the APC level for APCs with a device
offset percentage greater than 40 percent (79 FR 66795). Beginning in
CY 2017, CMS began determining device-intensive status at the HCPCS
code level. In assigning device-intensive status to an APC prior to CY
2017, the device costs of all the procedures within the APC were
calculated and the geometric mean device offset of all of the
procedures had to exceed 40 percent. Almost all of the procedures
assigned to device-intensive APCs utilized devices, and the device
costs for the associated HCPCS codes exceeded the 40-percent threshold.
The no cost/full credit and partial credit device policy (79 FR 66872
through 66873) applies to device-intensive procedures and is discussed
in detail in section IV.B.4 of this proposed rule. A related device
policy was the requirement that certain procedures assigned to device-
intensive APCs require the reporting of a device code on the claim (80
FR 70422) and is discussed in detail in section IV.B.3 of this proposed
rule. For further background information on the device-intensive APC
policy, we refer readers to the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70421 through 70426).
a. HCPCS Code-Level Device-Intensive Determination
As stated earlier, prior to CY 2017, under the device-intensive
methodology we assigned device-intensive status to all procedures
requiring the implantation of a device that were assigned to an APC
with a device offset greater than 40 percent and, beginning in CY 2015,
that met the three criteria listed below. Historically, the device-
intensive designation was at the APC level and applied to the
applicable procedures within that APC. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79658), we changed our methodology to
assign device-intensive status at the individual HCPCS code level
rather than at the APC level. Under this policy, a procedure could be
assigned device-intensive status regardless of its APC assignment, and
device-intensive APC designations were no longer applied under the OPPS
or the ASC payment system.
We believe that a HCPCS code-level device offset is, in most cases,
a better representation of a procedure's device cost than an APC-wide
average device offset based on the average device offset of all of the
procedures assigned to an APC. Unlike a device offset calculated at the
APC level, which is a weighted average offset for all devices used in
all of the procedures assigned to an APC, a HCPCS code-level device
offset is calculated using only claims for a single HCPCS code. We
believe that this methodological change results in a more accurate
representation of the cost attributable to implantation of a high-cost
device, which ensures consistent device-intensive designation of
procedures with a significant device cost. Further, we believe a HCPCS
code-level device offset removes inappropriate device-intensive status
for procedures without a significant device cost that are granted such
status because of their APC assignment.
Under our existing policy, procedures that meet the criteria listed
in section IV.B.1.b of this proposed rule are identified as device-
intensive procedures and are subject to all the policies applicable to
procedures assigned device-intensive status under our established
methodology, including our policies on device edits and no cost/full
credit and partial credit devices discussed in sections IV.B.3 and
IV.B.4 of this proposed rule.
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
[[Page 44623]]
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
interested parties that the criteria excluded some procedures that
interested parties believed should qualify as device-intensive
procedures. Specifically, we were persuaded by interested party
arguments that procedures requiring expensive surgically inserted or
implanted devices that are not capital equipment should qualify as
device-intensive procedures, regardless of whether the device remains
in the patient's body after the conclusion of the procedure. We agreed
that a broader definition of device-intensive procedures was warranted,
and made two modifications to the criteria for CY 2019 (83 FR 58948).
First, we allowed procedures that involve surgically inserted or
implanted single-use devices that meet the device offset percentage
threshold to qualify as device-intensive procedures, regardless of
whether the device remains in the patient's body after the conclusion
of the procedure. We established this policy because we no longer
believe that whether a device remains in the patient's body should
affect a procedure's designation as a device-intensive procedure, as
such devices could, nonetheless, comprise a large portion of the cost
of the applicable procedure. Second, we modified our criteria to lower
the device offset percentage threshold from 40 percent to 30 percent,
to allow a greater number of procedures to qualify as device intensive.
We stated that we believe allowing these additional procedures to
qualify for device-intensive status will help ensure these procedures
receive more appropriate payment in the ASC setting, which will help
encourage the provision of these services in the ASC setting. In
addition, we stated that this change would help to ensure that more
procedures containing relatively high-cost devices are subject to the
device edits, which leads to more correctly coded claims and greater
accuracy in our claims data. Specifically, for CY 2019 and subsequent
years, we finalized that device-intensive procedures will be subject to
the following criteria:
All procedures must involve implantable devices assigned a
CPT or HCPCS code;
The required devices (including single-use devices) must
be surgically inserted or implanted; and
The device offset amount must be significant, which is
defined as exceeding 30 percent of the procedure's mean cost (83 FR
58945).
In addition, to further align the device-intensive policy with the
criteria used for device pass-through payment status, we finalized, for
CY 2019 and subsequent years, that for purposes of satisfying the
device-intensive criteria, a device-intensive procedure must involve a
device that:
Has received FDA marketing authorization, has received an
FDA investigational device exemption (IDE), and has been classified as
a Category B device by FDA in accordance with Sec. Sec. 405.203
through 405.207 and 405.211 through 405.215, or meets another
appropriate FDA exemption from premarket review;
Is an integral part of the service furnished;
Is used for one patient only;
Comes in contact with human tissue;
Is surgically implanted or inserted (either permanently or
temporarily); and
Is not either of the following:
(a) Equipment, an instrument, apparatus, implement, or item of the
type for which depreciation and financing expenses are recovered as
depreciable assets as defined in Chapter 1 of the Medicare Provider
Reimbursement Manual (CMS Pub. 15-1); or
(b) A material or supply furnished incident to a service (for
example, a suture, customized surgical kit, scalpel, or clip, other
than a radiological site marker) (83 FR 58945).
In addition, for new HCPCS codes describing procedures requiring
the implantation of devices that do not yet have associated claims
data, in the CY 2017 OPPS/ASC final rule with comment period (81 FR
79658), we finalized a policy for CY 2017 to apply device-intensive
status with a default device offset set at 41 percent for new HCPCS
codes describing procedures requiring the implantation or insertion of
a device that did not yet have associated claims data until claims data
are available to establish the HCPCS code-level device offset for the
procedures. This default device offset amount of 41 percent was not
calculated from claims data; instead, it was applied as a default until
claims data were available upon which to calculate an actual device
offset for the new code. The purpose of applying the 41-percent default
device offset to new codes that describe procedures that implant or
insert devices was to ensure ASC access for new procedures until claims
data become available.
As discussed in the CY 2019 OPPS/ASC proposed rule and final rule
with comment period (83 FR 37108 through 37109 and 58945 through 58946,
respectively), in accordance with our policy stated previously to lower
the device offset percentage threshold for procedures to qualify as
device-intensive from greater than 40 percent to greater than 30
percent, for CY 2019 and subsequent years, we modified this policy to
apply a 31-percent default device offset to new HCPCS codes describing
procedures requiring the implantation of a device that do not yet have
associated claims data until claims data are available to establish the
HCPCS code-level device offset for the procedures. In conjunction with
the policy to lower the default device offset from 41 percent to 31
percent, we continued our current policy of, in certain rare instances
(for example, in the case of a very expensive implantable
[[Page 44624]]
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 few or no clinical
differences and use the same devices as the new HCPCS code. In
addition, clinically related and similar codes for purposes of this
policy are codes that either currently or previously describe the
procedure described by the new HCPCS code. Under this policy, claims
data from clinically related and similar codes are included as
associated claims data for a new code, and where an existing HCPCS code
is found to be clinically related or similar to a new HCPCS code, we
apply the device offset percentage derived from the existing clinically
related or similar HCPCS code's claims data to the new HCPCS code for
determining the device offset percentage. We stated that we believe
that claims data for HCPCS codes describing procedures that have minor
differences from the procedures described by new HCPCS codes will
provide an accurate depiction of the cost relationship between the
procedure and the device(s) that are used, and will be appropriate to
use to set a new code's device offset percentage, in the same way that
predecessor codes are used. If a new HCPCS code has multiple
predecessor codes, the claims data for the predecessor code that has
the highest individual HCPCS-level device offset percentage is used to
determine whether the new HCPCS code qualifies for device-intensive
status. Similarly, in the event that a new HCPCS code does not have a
predecessor code but has multiple clinically related or similar codes,
the claims data for the clinically related or similar code that has the
highest individual HCPCS level device offset percentage is used to
determine whether the new HCPCS code qualifies for device-intensive
status.
As we indicated in the CY 2019 OPPS/ASC proposed rule and final
rule with comment period, additional information for our consideration
of an offset percentage higher than the default of 31 percent for new
HCPCS codes describing procedures requiring the implantation (or, in
some cases, the insertion) of a 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 final rule with
comment period (86 FR 63751 through 63754), given our concerns
regarding CY 2020 data as a result of the COVID-PHE, we adopted a
policy to use CY 2019 claims data to establish CY 2022 prospective
rates. While we believed CY 2019 represented the best full year of
claims data for ratesetting for CY 2022, we stated that 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 adopted a policy to assign device offset
percentages for such procedures based on CY 2020 data if CY 2020 claims
information is available.
For CY 2023, consistent with our broader proposal to use CY 2021
claims for CY 2023 OPPS and ASC ratesetting purposes and our historical
practice, we propose to use CY 2021 claims information for determining
device offset percentages and assigning device-intensive status.
The full listing of the proposed CY 2023 device-intensive
procedures can be found in Addendum P to this proposed rule (which is
available via the internet on the CMS website).
3. Device Edit Policy
In the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795), we finalized a policy and implemented claims processing edits
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC
final rule with comment period (the CY 2015 device-dependent APCs) is
reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70422), we modified our previously existing
policy and applied the device coding requirements exclusively to
procedures that require the implantation of a device that are assigned
to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with
comment period, we also finalized our policy that the claims processing
edits are such that any device code, when reported on a claim with a
procedure assigned to a device-intensive APC (listed in Table 42 of the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will
satisfy the edit.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658
through 79659), we changed our policy for CY 2017 and subsequent years
to apply the CY 2016 device coding requirements to the newly defined
device-intensive procedures. For CY 2017 and subsequent years, we also
specified that any device code, when reported on a claim with a device-
intensive procedure, will satisfy the edit. In addition, we created
HCPCS code C1889 to recognize devices furnished during a device-
intensive procedure that are not described by a specific Level II HCPCS
Category C-code. Reporting HCPCS code C1889 with a device-intensive
procedure will satisfy the edit requiring a device code to be reported
on a claim with a device-intensive procedure. In the CY 2019 OPPS/ASC
final rule with comment period, we revised the description of HCPCS
code C1889 to remove the specific applicability to device-intensive
procedures (83 FR 58950). For CY 2019
[[Page 44625]]
and subsequent years, the description of HCPCS code C1889 is
``Implantable/insertable device, not otherwise classified''.
We are not proposing any changes to this policy for CY 2023.
4. Adjustment to OPPS Payment for No Cost/Full Credit and Partial
Credit Devices
a. Background
To ensure equitable OPPS payment when a hospital receives a device
without cost or with full credit, in CY 2007, we implemented a policy
to reduce the payment for specified device-dependent APCs by the
estimated portion of the APC payment attributable to device costs (that
is, the device offset) when the hospital receives a specified device at
no cost or with full credit (71 FR 68071 through 68077). Hospitals were
instructed to report no cost/full credit device cases on the claim
using the ``FB'' modifier on the line with the procedure code in which
the no cost/full credit device is used. In cases in which the device is
furnished without cost or with full credit, hospitals were instructed
to report a token device charge of less than $1.01. In cases in which
the device being inserted is an upgrade (either of the same type of
device or to a different type of device) with a full credit for the
device being replaced, hospitals were instructed to report as the
device charge the difference between the hospital's usual charge for
the device being implanted and the hospital's usual charge for the
device for which it received full credit. In CY 2008, we expanded this
payment adjustment policy to include cases in which hospitals receive
partial credit of 50 percent or more of the cost of a specified device.
Hospitals were instructed to append the ``FC'' modifier to the
procedure code that reports the service provided to furnish the device
when they receive a partial credit of 50 percent or more of the cost of
the new device. We refer readers to the CY 2008 OPPS/ASC final rule
with comment period for more background information on the ``FB'' and
``FC'' modifiers payment adjustment policies (72 FR 66743 through
66749).
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), beginning in CY 2014, we modified our policy of
reducing OPPS payment for specified APCs when a hospital furnishes a
specified device without cost or with a full or partial credit. For CY
2013 and prior years, our policy had been to reduce OPPS payment by 100
percent of the device offset amount when a hospital furnishes a
specified device without cost or with a full credit and by 50 percent
of the device offset amount when the hospital receives partial credit
in the amount of 50 percent or more of the cost for the specified
device. For CY 2014, we reduced OPPS payment, for the applicable APCs,
by the full or partial credit a hospital receives for a replaced
device. Specifically, under this modified policy, hospitals are
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' (Credit Received from the Manufacturer
for a Replaced Device) when the hospital receives a credit for a
replaced device that is 50 percent or greater than the cost of the
device. For CY 2014, we also limited the OPPS payment deduction for the
applicable APCs to the total amount of the device offset when the
``FD'' value code appears on a claim. For CY 2015, we continued our
policy of reducing OPPS payment for specified APCs when a hospital
furnishes a specified device without cost or with a full or partial
credit and to use the three criteria established in the CY 2007 OPPS/
ASC final rule with comment period (71 FR 68072 through 68077) for
determining the APCs to which our CY 2015 policy will apply (79 FR
66872 through 66873). In the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70424), we finalized our policy to no longer specify a
list of devices to which the OPPS payment adjustment for no cost/full
credit and partial credit devices would apply and instead apply this
APC payment adjustment to all replaced devices furnished in conjunction
with a procedure assigned to a device-intensive APC when the hospital
receives a credit for a replaced specified device that is 50 percent or
greater than the cost of the device.
b. Policy for No Cost/Full Credit and Partial Credit Devices
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79659
through 79660), for CY 2017 and subsequent years, we finalized a policy
to reduce OPPS payment for device-intensive procedures, by the full or
partial credit a provider receives for a replaced device, when a
hospital furnishes a specified device without cost or with a full or
partial credit. Under our current policy, hospitals continue to be
required to report on the claim the amount of the credit in the amount
portion for value code ``FD'' when the hospital receives a credit for a
replaced device that is 50 percent or greater than the cost of the
device.
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75005
through 75007), we adopted a policy of reducing OPPS payment for
specified APCs when a hospital furnishes a specified device without
cost or with a full or partial credit by the lesser of the device
offset amount for the APC or the amount of the credit. We adopted this
change in policy in the preamble of the CY 2014 OPPS/ASC final rule
with comment period and discussed it in subregulatory guidance,
including Chapter 4, Section 61.3.6 of the Medicare Claims Processing
Manual. Further, in the CY 2021 OPPS/ASC final rule with comment period
(85 FR 86017 through 86018, 86302), we made conforming changes to our
regulations at Sec. 419.45(b)(1) and (2) that codified this policy.
We are not proposing any changes to our policies regarding payment
for no cost/full credit and partial credit devices for CY 2023.
V. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals
A. Proposed OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout the proposed rule, the term ``biological''
is used because this is the term that appears in section 1861(t) of the
Act. A ``biological'' as used in the proposed rule includes (but is not
necessarily limited to) a ``biological product'' or a ``biologic'' as
defined under section 351 of the 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
[[Page 44626]]
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 2023 pass-through
drugs and biologicals and their designated APCs are assigned status
indicator ``G'' in Addenda A and B to this proposed rule (which are
available via the internet on the CMS website).
Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act for the
drug or biological exceeds the portion of the otherwise applicable
Medicare OPD fee schedule that the Secretary determines is associated
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64.
These regulations specify that the pass-through payment equals the
amount determined under section 1842(o) of the Act minus the portion of
the APC payment that CMS determines is associated with the drug or
biological.
Section 1847A of the Act establishes the average sales price (ASP)
methodology, which is used for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology, as applied under the OPPS, uses
several sources of data as a basis for payment, including the ASP, the
wholesale acquisition cost (WAC), and the average wholesale price
(AWP). In this proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described
therein. Additional information on the ASP methodology can be found on
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 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 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 for which pass-through payment status is ending during
the calendar year is included in the quarterly OPPS Change Request
transmittals.
3. Drugs and Biologicals With Expiring Pass-Through Payment Status in
CY 2022
There are 32 drugs and biologicals for which pass-through payment
status expires on December 31, 2022 or for which the equitable
adjustment to mimic continued pass-through payment will end on December
31, 2022, as listed in Table 39. Most of these drugs and biologicals
will have received OPPS pass-through payment for 3 years during the
period of January 1, 2019 through December 31, 2022. In accordance with
the policy finalized in CY 2017 and described earlier, pass-through
payment status for drugs and biologicals 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.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63755
through 63756), we also recognized the effects of the Public Health
Emergency (PHE) on drugs and biologicals whose pass-through payment
status expired or expires between December 31, 2021, and September 30,
2022, by adopting a one-time equitable adjustment under section
1833(t)(2)(E) of the Act to continue separate payment for the remainder
of CY 2022 to mimic continued pass-through status for that year.
Because pass-through payment status can expire at the end of a quarter,
we finalized that the adjusted payment would be made for between one
and four quarters, depending on when the pass-through period expires
for the drug or biological. For a detailed discussion of the equitable
adjustment for drugs with expiring pass-through status in CY 2022, we
refer readers to the CY 2022 OPPS/ASC final rule with comment period
(86 FR 63755 through 63756).
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 $135 for CY 2023), as discussed
further in section V.B.1 of this proposed rule). 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
propose to provide separate payment at the applicable ASP-based payment
amount (which is proposed at ASP+6 percent for non-340B drugs for CY
2023 and
[[Page 44627]]
subsequent years), as discussed further in section V.B.2 of this
proposed rule.
Refer to Table 39 for the list of drugs and biologicals for which
pass-through payment will expire or for which separate payment to mimic
pass-through payment status will end on December 31, 2022. The packaged
or separately payable status of each of these drugs or biologicals is
listed in Addendum B of this proposed rule (which is available via the
internet on the CMS website).
BILLING CODE 4120-01-P
[[Page 44628]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.048
[[Page 44629]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.049
[[Page 44630]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.050
BILLING CODE 4120-01-C
4. Proposed Drugs, Biologicals, and Radiopharmaceuticals With Pass-
Through Payment Status Expiring in CY 2023
We propose to end pass-through payment status in CY 2023 for 43
drugs and biologicals. These drugs and biologicals, which were
initially approved for pass-through payment status between April 1,
2020 and January 1, 2021, are listed in Table 40. The APCs and HCPCS
codes for these drugs and biologicals, which have pass-through payment
status that will end by December 31, 2023, are assigned status
indicator ``G'' in Addenda A and B to this proposed rule (which are
available via the internet on the CMS website). The APCs and HCPCS
codes for these drugs and biologicals, which have pass-through payment
status, are assigned status indicator ``G'' only for the duration of
their pass-through status as shown in Table 40.
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount authorized under
section 1842(o) of the Act and the portion of the otherwise applicable
OPD fee schedule that the Secretary determines is associated with the
drug or biological. For CY 2023, we propose to continue to pay for
pass-through drugs and biologicals at ASP+6 percent, equivalent to the
payment rate these drugs and biologicals would receive in the
physician's office setting in CY 2023. We note that, under the OPD fee
schedule, separately payable drugs assigned to an APC are generally
payable at ASP+6 percent. Therefore, we propose that a $0 pass-through
payment amount would be paid for pass-through drugs and biologicals
under the CY 2023 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 also proposed at
ASP+6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure
(including contrast agents, diagnostic radiopharmaceuticals, and stress
agents); and drugs and biologicals that function as supplies when used
in a surgical procedure), we propose that their pass-through payment
amount would be equal to ASP+6 percent for CY 2023 minus a payment
offset for the portion of the otherwise applicable OPD fee schedule
that the Secretary determines is associated with the drug or biological
as described in section V.A.6 of this proposed rule. We propose this
policy because, if not for the pass-through payment status of these
policy-packaged products, payment for these products would be packaged
into the associated procedure and therefore, there are associated OPD
fee schedule amounts for them.
We propose to continue to update pass-through payment rates on a
quarterly basis on the CMS website during CY 2023 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 2023, consistent with our CY 2022 policy for diagnostic and
therapeutic radiopharmaceuticals, we propose to continue to provide
payment for both diagnostic and therapeutic radiopharmaceuticals that
are granted pass-through payment status based on the ASP methodology.
As stated earlier,
[[Page 44631]]
for purposes of pass-through payment, we consider radiopharmaceuticals
to be drugs under the OPPS. Therefore, if a diagnostic or therapeutic
radiopharmaceutical receives pass-through payment status during CY
2023, we propose to follow the standard ASP methodology to determine
the pass-through payment rate that drugs receive under section 1842(o)
of the Act, which is proposed at ASP+6 percent. If ASP data are not
available for a radiopharmaceutical, we propose to provide pass-through
payment at WAC+3 percent (consistent with our proposed policy in
section V.B.2.b of this proposed rule), the equivalent payment provided
for pass-through drugs and biologicals without ASP information.
Additional detail on the WAC+3 percent payment policy can be found in
section V.B.2.b of this proposed rule. If WAC information also is not
available, we propose to provide payment for the pass-through
radiopharmaceutical at 95 percent of its most recent AWP. We refer
readers to Table 40 below for the list of drugs and biologicals for
which we propose to expire pass-through payment status during CY 2023.
BILLING CODE 4120-01-P
[[Page 44632]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.051
[[Page 44633]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.052
[[Page 44634]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.053
[[Page 44635]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.054
[[Page 44636]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.055
BILLING CODE 4120-01-C
5. Proposed Drugs, Biologicals, and Radiopharmaceuticals With Pass-
Through Payment Status Continuing in CY 2023
We propose to continue pass-through payment status in CY 2023 for
32 drugs and biologicals. These drugs and biologicals, which were
approved for pass-through payment status with effective dates beginning
between April 1, 2021, and April 1, 2022, are listed in Table 41. The
APCs and HCPCS codes for these drugs and biologicals, which have pass-
through payment status that will continue after December 31, 2022, are
assigned status indicator ``G'' in Addenda A and B to this proposed
rule (which are available via the internet on the CMS website).
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the pass-through
payment amount) as the difference between the amount
[[Page 44637]]
authorized under section 1842(o) of the Act and the portion of the
otherwise applicable OPD fee schedule that the Secretary determines is
associated with the drug or biological. For CY 2023, we propose to
continue to pay for pass-through drugs and biologicals at ASP+6
percent, equivalent to the payment rate these drugs and biologicals
would receive in the physician's office setting in CY 2023. We propose
that a $0 pass-through payment amount would be paid for pass-through
drugs and biologicals that are not policy-packaged as described in
section V.B.1.c under the CY 2023 OPPS because the difference between
the amount authorized under section 1842(o) of the Act, which is
proposed at ASP+6 percent, and the portion of the otherwise applicable
OPD fee schedule that the Secretary determines is appropriate, which is
proposed at ASP+6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure
(including contrast agents, diagnostic radiopharmaceuticals, and stress
agents); and drugs and biologicals that function as supplies when used
in a surgical procedure), we propose that their pass-through payment
amount would be equal to ASP+6 percent for CY 2023 minus a payment
offset for any predecessor drug products contributing to the pass-
through payment as described in section V.A.6 of this proposed rule. We
propose this policy because, if not for the pass-through payment status
of these policy-packaged products, payment for these products would be
packaged into the associated procedure and therefore, there are
associated OPD fee schedule amounts for them.
We propose to continue to update pass-through payment rates on a
quarterly basis on our website during CY 2023 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 2023, consistent with our CY 2022 policy for diagnostic and
therapeutic radiopharmaceuticals, we propose to continue to provide
payment for both diagnostic and therapeutic radiopharmaceuticals that
are granted pass-through payment status based on the ASP methodology.
As stated earlier, for purposes of pass-through payment, we consider
radiopharmaceuticals to be drugs under the OPPS. Therefore, if a
diagnostic or therapeutic radiopharmaceutical receives pass-through
payment status during CY 2023, we propose to follow the standard ASP
methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which is proposed at ASP+6
percent. If ASP data are not available for a radiopharmaceutical, we
propose to provide pass-through payment at WAC+3 percent (consistent
with our proposed policy in section V.B.2.b of this proposed rule), the
equivalent payment provided to pass-through drugs and biologicals
without ASP information. Additional detail on the WAC+3 percent payment
policy can be found in section V.B.2.b of this proposed rule. If WAC
information also is not available, we propose to provide payment for
the pass-through radiopharmaceutical at 95 percent of its most recent
AWP.
The drugs and biologicals that we propose would have pass-through
payment status expire after December 31, 2023, are shown in Table 41.
BILLING CODE 4120-01-P
[[Page 44638]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.056
[[Page 44639]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.057
[[Page 44640]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.058
[[Page 44641]]
BILLING CODE 4120-01-C
6. Proposed Provisions for Reducing Transitional Pass-Through Payments
for Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals To
Offset Costs Packaged Into APC Groups
Under the regulation at 42 CFR 419.2(b)(15), 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)(16), 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. Finally, under the regulation at 42 CFR 419.2(b)(4),
anesthesia drugs are packaged in the OPPS. 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 2023, as we did in CY 2022, we propose to continue to
apply the same policy-packaged offset policy to payment for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents,
pass-through stress agents, and pass-through skin substitutes. The
proposed APCs to which a payment offset may be applicable for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents,
pass-through stress agents, and pass-through skin substitutes are
identified in Table 42.
[GRAPHIC] [TIFF OMITTED] TP26JY22.123
We propose to continue to post annually on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html a file that contains the
APC offset amounts that will be used for that year for purposes of both
evaluating cost significance for candidate pass-through payment device
categories and drugs and biologicals and establishing any appropriate
APC offset amounts. Specifically, the file will continue to provide the
amounts and percentages of APC payment associated with packaged
implantable devices, policy-packaged drugs, and threshold packaged
drugs and biologicals for every OPPS clinical APC.
B. Proposed OPPS Payment for Drugs, Biologicals, and
Radiopharmaceuticals without Pass-Through Payment Status
1. Proposed Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Proposed Packaging Threshold
In accordance with section 1833(t)(16)(B) of the Act, the threshold
for establishing separate APCs for 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
[[Page 44642]]
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 2022 (86 FR
63635 through 63637).
Following the CY 2007 methodology, for this proposed rule, we use
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 2023 and rounded the resulting dollar amount
($133.73) to the nearest $5 increment, which yielded a figure of $135.
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. Based on these calculations using the CY
2007 OPPS methodology, we propose a packaging threshold for CY 2023 of
$135. b. Proposed 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 2023 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 2021 and were paid (via packaged or separate payment)
under the OPPS. We used data from CY 2021 claims processed through June
30, 2021, for this calculation. However, we did not perform this
calculation for those drugs and biologicals with multiple HCPCS codes
that include different dosages, as described in section V.B.1.d of this
proposed rule, or for the following policy-packaged items that we
propose to continue to package in CY 2023: 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 2023, we use the methodology that was described in detail
in the CY 2006 OPPS proposed rule (70 FR 42723 through 42724) and
finalized in the CY 2006 OPPS final rule with comment period (70 FR
68636 through 68638). For each drug and biological HCPCS code, we used
an estimated payment rate of ASP+6 percent (which is the payment rate
we propose for separately payable drugs and biologicals (other than
340B drugs)) for CY 2023, as discussed in more detail in section
V.B.2.b of this proposed rule) to calculate the CY 2023 proposed rule
per day costs. We used the manufacturer-submitted ASP data from the
fourth quarter of CY 2021 (data that were used for payment purposes in
the physician's office setting, effective April 1, 2022) to determine
the proposed rule per day cost.
As is our standard methodology, for CY 2023, we propose to use
payment rates based on the ASP data from the fourth quarter of CY 2021
for budget neutrality estimates, packaging determinations, impact
analyses, and completion of Addenda A and B to this proposed rule
(which are available via the internet on the CMS website) because these
are the most recent data available for use at the time of development
of this proposed rule. These data also were the basis for drug payments
in the physician's office setting, effective April 1, 2022. 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
2021 hospital claims data to determine their per day cost.
We propose to package items with a per day cost less than or equal
to $135 and identify items with a per day cost greater than $135 as
separately payable unless they are policy-packaged. Consistent with our
past practice, we cross-walked historical OPPS claims data from the CY
2021 HCPCS codes that were reported to the CY 2022 HCPCS codes that we
display in Addendum B to this proposed rule (which is available via the
internet on the CMS website) for proposed payment in CY 2023.
Our policy during previous cycles of the OPPS has been to use
updated ASP and claims data to make final determinations of the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals for the OPPS/ASC final rule with comment period.
We note that it is also our policy to make an annual packaging
determination for a HCPCS code only when we develop the OPPS/ASC final
rule with comment period for the update year. Only HCPCS codes that are
identified as separately payable in the final rule with comment period
are subject to quarterly updates. For our calculation of per day costs
of HCPCS codes for drugs and biologicals in this proposed rule, we
propose to use ASP data from the fourth quarter of CY 2021, 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, 2022, along with updated hospital claims data from CY 2021. We
note that we also propose to use these data for budget neutrality
estimates and impact analyses for this 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 2022.
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, 2022. These payment rates would then
be updated in the January 2023 OPPS update, based on the most recent
ASP data to be used for physicians' office and OPPS payment as of
January 1, 2023. For items that do not currently have an ASP-based
payment rate, we propose to recalculate their mean unit cost from all
of the CY 2021 claims data and updated cost report information
available for the CY 2023 OPPS/ASC final rule with comment period to
determine their final per day cost.
Consequently, the packaging status of some HCPCS codes for drugs,
biologicals, and therapeutic radiopharmaceuticals in this proposed rule
may be different from the same drugs' HCPCS codes' packaging status
determined based on the data used for the final rule with comment
period. Under such circumstances, we propose 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 2023 OPPS drug packaging
threshold and the drug's payment status (packaged or separately
payable) in CY 2022. 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 2023,
consistent with our historical practice, we propose to apply the
following policies to those HCPCS codes for drugs, biologicals, and
therapeutic
[[Page 44643]]
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 2022 and that are proposed for separate payment in CY
2023, and that then have per day costs equal to or less than the CY
2023 final rule drug packaging threshold, based on the updated ASPs and
hospital claims data used for the CY 2023 final rule, would continue to
receive separate payment in CY 2023.
HCPCS codes for drugs and biologicals that were packaged
in CY 2022 and that are proposed for separate payment in CY 2023, and
that then have per day costs equal to or less than the CY 2023 final
rule drug packaging threshold, based on the updated ASPs and hospital
claims data used for the CY 2023 final rule, would remain packaged in
CY 2023.
HCPCS codes for drugs and biologicals for which we
proposed packaged payment in CY 2023 but that then have per-day costs
greater than the CY 2023 final rule drug packaging threshold, based on
the updated ASPs and hospital claims data used for the CY 2023 final
rule, would receive separate payment in CY 2023.
c. Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals
As mentioned earlier in this section, under the OPPS, we package
several categories of nonpass-through drugs, biologicals, and
radiopharmaceuticals, regardless of the cost of the products. Because
the products are packaged according to the policies in 42 CFR 419.2(b),
we refer to these packaged drugs, biologicals, and radiopharmaceuticals
as ``policy-packaged'' drugs, biologicals, and radiopharmaceuticals.
These policies are either longstanding or based on longstanding
principles and inherent to the OPPS and are as follows:
Anesthesia, certain drugs, biologicals, and other
pharmaceuticals; medical and surgical supplies and equipment; surgical
dressings; and devices used for external reduction of fractures and
dislocations (Sec. 419.2(b)(4));
Intraoperative items and services (Sec. 419.2(b)(14));
Drugs, biologicals, and radiopharmaceuticals that function
as supplies when used in a diagnostic test or procedure (including, but
not limited to, diagnostic radiopharmaceuticals, contrast agents, and
pharmacologic stress agents) (Sec. 419.2(b)(15)); and
Drugs and biologicals that function as supplies when used
in a surgical procedure (including, but not limited to, skin
substitutes and similar products that aid wound healing and implantable
biologicals) (Sec. 419.2(b)(16)).
The policy at Sec. 419.2(b)(16) is broader than that at Sec.
419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with
comment period: ``We consider all items related to the surgical outcome
and provided during the hospital stay in which the surgery is
performed, including postsurgical pain management drugs, to be part of
the surgery for purposes of our drug and biological surgical supply
packaging policy'' (79 FR 66875). The category described by Sec.
419.2(b)(15) is large and includes diagnostic radiopharmaceuticals,
contrast agents, stress agents, and some other products. The category
described by Sec. 419.2(b)(16) includes skin substitutes and some
other products. We believe it is important to reiterate that cost
consideration is not a factor when determining whether an item is a
surgical supply (79 FR 66875).
d. Packaging Determination for HCPCS Codes That Describe the Same Drug
or Biological but Different Dosages
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
through 60491), we finalized a policy to make a single packaging
determination for a drug, rather than an individual HCPCS code, when a
drug has multiple HCPCS codes describing different dosages because we
believe that adopting the standard HCPCS code-specific packaging
determinations for these codes could lead to inappropriate payment
incentives for hospitals to report certain HCPCS codes instead of
others. We continue to believe that making packaging determinations on
a drug-specific basis eliminates payment incentives for hospitals to
report certain HCPCS codes for drugs and allows hospitals flexibility
in choosing to report all HCPCS codes for different dosages of the same
drug or only the lowest dosage HCPCS code. Therefore, we propose to
continue our policy to make packaging determinations on a drug-specific
basis, rather than a HCPCS code-specific basis, for those HCPCS codes
that describe the same drug or biological but different dosages in CY
2023.
For CY 2023, 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 2021 claims data
and our pricing information at ASP+6 percent across all of the HCPCS
codes that describe each distinct drug or biological in order to
determine the mean units per day of the drug or biological in terms of
the HCPCS code with the lowest dosage descriptor. The following drugs
did not have pricing information available for the ASP methodology for
this 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 2021 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 if the estimated per day cost of each drug or biological
is less than or equal to the proposed CY 2023 drug packaging threshold
of $135 (in which case all HCPCS codes for the same drug or biological
would be packaged) or greater than the proposed CY 2023 drug packaging
threshold of $135 (in which case 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 2023 is displayed in Table 43.
BILLING CODE 4120-01-P
[[Page 44644]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.059
BILLING CODE 4120-01-C
2. Proposed Payment for Drugs and Biologicals Without Pass-Through
Status That Are Not Packaged
a. Proposed Payment for Specified Covered Outpatient Drugs (SCODs) and
Other Separately Payable Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' (known as a SCOD) is defined as a
covered outpatient drug, as defined in section 1927(k)(2) of the Act,
for which a separate APC has been established and that either is a
radiopharmaceutical agent or is a drug or biological for which payment
was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of SCODs. These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has
not been assigned.
During CYs 2004 and 2005, an orphan drug (as designated by
the Secretary).
[[Page 44645]]
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.\121\
---------------------------------------------------------------------------
\121\ 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. For CY 2023 and
subsequent years, we propose 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 2022.
b. CY 2023 Proposed Payment Policy
For CY 2023 and subsequent years, we propose to continue our
payment policy that has been in effect since CY 2013 to pay for
separately payable drugs and biologicals, with the exception of 340B-
acquired drugs, at ASP+6 percent in accordance with section
1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We formally
propose to pay for separately payable nonpass-through drugs acquired
with a 340B discount at a rate of ASP minus 22.5 percent (as described
in section V.B.6 of this proposed rule). We refer readers to section
V.B.6. for a full discussion of our proposed CY 2023 payment policy for
340B drugs.
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
are 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 CY 2020 and subsequent years, 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 CY 2023 and subsequent years, we propose to
continue to utilize a 3-percent add-on instead of a 6-percent add-on
for drugs that are paid based on WAC pursuant to our authority under
section 1833(t)(14)(A)(iii)(II) of the Act, which provides, in part,
that the amount of payment for a SCOD is the average price of the drug
in the year established under section 1847A of the Act. We also propose
to apply this provision to non-SCOD separately payable drugs. Because
we propose to establish the average price for a drug paid based on WAC
under section 1847A of the Act as WAC+3 percent instead of WAC+6
percent, we believe it is appropriate to price separately payable drugs
paid based on WAC at the same amount under the OPPS. We propose, 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, we formally propose
that the payment amount for these drugs (in this case, 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 also refer readers to section V.B.6. for a full
discussion of our proposed CY 2023 payment policy for 340B drugs.
Consistent with our current policy, we propose for CY 2023 and
subsequent years that payments for separately payable drugs and
biologicals would be included in the budget neutrality adjustments,
under the requirements in section 1833(t)(9)(B) of the Act. We also
propose that the budget neutral weight scalar would not be applied in
[[Page 44646]]
determining payments for these separately payable drugs and
biologicals.
We note that separately payable drug and biological payment rates
listed in Addenda A and B to this proposed rule (available via the
internet on the CMS website), which illustrate the proposed CY 2023
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, 2022, or WAC, AWP, or mean unit cost
from CY 2021 claims data and updated cost report information available
for this proposed rule. In general, these published payment rates are
not the same as the actual January 2023 payment rates. This is because
payment rates for drugs and biologicals with ASP information for
January 2023 will be determined through the standard quarterly process
where ASP data submitted by manufacturers for the third quarter of CY
2022 (July 1, 2022, through September 30, 2022) will be used to set the
payment rates that are released for the quarter beginning in January
2023 in December 2022. In addition, payment rates for drugs and
biologicals in Addenda A and B to this proposed rule, for which there
was no ASP information available for April 2022, are based on mean unit
cost in the available CY 2021 claims data. If ASP information becomes
available for payment for the quarter beginning in January 2023, we
will price payment for these drugs and biologicals based on their newly
available ASP information. Finally, there may be drugs and biologicals
that have ASP information available for this proposed rule (reflecting
April 2022 ASP data) that do not have ASP information available for the
quarter beginning in January 2023. These drugs and biologicals would
then be paid based on mean unit cost data derived from CY 2021 hospital
claims. Therefore, the proposed payment rates listed in Addenda A and B
to this proposed rule are not for January 2023 payment purposes and are
only illustrative of the CY 2023 OPPS payment methodology using the
most recently available information at the time of issuance of this
proposed rule.
c. Biosimilar Biological Products
For CY 2016 and CY 2017, we finalized a policy to pay for
biosimilar biological products based on the payment allowance of the
product as determined under section 1847A of the Act and to subject
nonpass-through biosimilar biological products to our annual threshold-
packaged policy (for CY 2016, 80 FR 70445 through 70446; and for CY
2017, 81 FR 79674). In the CY 2018 OPPS/ASC final rule with comment
period (82 FR 59351), we finalized a policy to implement separate HCPCS
codes for biosimilar biological products that was based on the policy
established in the CY 2018 PFS final rule. The policy we established
allowed all biosimilar biological products to be 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).
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. Accordingly, in the CY
2019 OPPS/ASC final rule (83 FR 58977), we implemented a policy that
for CY 2019 and subsequent years, in accordance with section
1833(t)(14)(A)(iii)(II) of the Act, we 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.
For CY 2023 and subsequent years, we propose to continue our policy
to make all biosimilar biological products eligible for pass-through
payment and not just the first biosimilar biological product for a
reference product. We also formally propose to continue our current
policy of paying for nonpass-through biosimilars acquired under the
340B program at the biosimilar's ASP minus 22.5 percent of the
biosimilar's ASP instead of the biosimilar's ASP minus 22.5 percent of
the reference product's ASP, in accordance with section
1833(t)(14)(A)(iii)(II) of the Act. We refer readers to section V.B.6.
for a full discussion of our proposed CY 2023 payment policy for 340B
drugs.
3. Proposed Payment Policy for Therapeutic Radiopharmaceuticals
For CY 2023 and subsequent years, we propose to continue the
payment policy for therapeutic radiopharmaceuticals that began in CY
2010. We pay for separately payable therapeutic radiopharmaceuticals
under the ASP methodology adopted for separately payable drugs and
biologicals. If ASP information is unavailable for a therapeutic
radiopharmaceutical, we base therapeutic radiopharmaceutical payment on
mean unit cost data derived from hospital claims. We believe that the
rationale outlined in the CY 2010 OPPS/ASC final rule with comment
period (74 FR 60524 through 60525) for applying the principles of
separately payable drug pricing to therapeutic radiopharmaceuticals
continues to be appropriate for nonpass-through, separately payable
therapeutic radiopharmaceuticals in CY 2023. Therefore, we propose for
CY 2023 and subsequent years 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). For CY 2023 and
subsequent years, we also propose to rely on the most recently
available 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 2023 payment rates for nonpass-through, separately
payable therapeutic radiopharmaceuticals are included in Addenda A and
B of this proposed rule (which are available via the internet on the
CMS website).
[[Page 44647]]
4. Proposed Payment for Blood Clotting Factors
For CY 2022, 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 (86 FR 63643). That is, for CY 2022, 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 2022 updated furnishing fee was $0.239 per unit.
For CY 2023 and subsequent years, we propose to pay for blood
clotting factors at ASP+6 percent, consistent with our proposed payment
policy for other nonpass-through, separately payable drugs and
biologicals, and to continue our policy for payment of the furnishing
fee using an updated amount. Our policy to pay a furnishing fee for
blood clotting factors under the OPPS is consistent with the
methodology applied in the physician's office and in the inpatient
hospital setting. These methodologies were first articulated in the CY
2006 OPPS final rule with comment period (70 FR 68661) and later
discussed in the CY 2008 OPPS/ASC final rule with comment period (72 FR
66765). The proposed furnishing fee update is based on the percentage
increase in the Consumer Price Index (CPI) for medical care for the 12-
month period ending with June of the previous year. Because the Bureau
of Labor Statistics releases the applicable CPI data after the PFS and
OPPS/ASC proposed rules are published, we are not able to include the
actual updated furnishing fee in the proposed rules. Therefore, in
accordance with our policy, as finalized in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66765), we 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 propose to provide payment for blood clotting factors under the
same methodology as other separately payable drugs and biologicals
under the OPPS and to continue payment of an updated furnishing fee. We
will announce the actual figure of the percent change in the applicable
CPI and the updated furnishing fee calculation based on that figure
through the applicable program instructions and posting on the CMS
website.
5. Proposed Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes but Without OPPS Hospital Claims
Data
For CY 2023 and subsequent years, we propose to continue to use the
same payment policy as in CY 2022 for nonpass-through drugs,
biologicals, and radiopharmaceuticals with HCPCS codes but without OPPS
hospital claims data. 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 2023
payment status of each of the nonpass-through drugs, biologicals, and
radiopharmaceuticals with HCPCS codes but without OPPS hospital claims
data is listed in Addendum B to this proposed rule, which is available
via the internet on the CMS website.
6. OPPS Payment Methodology for 340B Purchased Drugs
a. Overview
Under the OPPS, we generally set payment rates for separately
payable drugs and biologicals under section 1833(t)(14)(A). Section
1833(t)(14)(A)(iii)(II) provides that, if hospital acquisition cost
data is not available, the payment amount is the average price for the
drug in a year established under section 1842(o), which cross-
references section 1847A, which generally sets a default rate of ASP+6
percent for certain drugs. The provision also provides that the average
price for the drug in the year as established under section 1847A is
calculated and adjusted by the Secretary as necessary for purposes of
paragraph (14). 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.
This policy has been the subject of significant litigation,
recently culminating in the Supreme Court's decision in American
Hospital Association v. Becerra, No. 20-1114, 2022 WL 2135490 (June 15,
2022). Originally, 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. The agency then 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.
Plaintiffs then petitioned the United States Supreme Court for a writ
of certiorari, which was granted on July 2, 2021.\122\
---------------------------------------------------------------------------
\122\ https://www.supremecourt.gov/orders/courtorders/070221zor_4gc5.pdf.
---------------------------------------------------------------------------
On June 15, 2022, the Supreme Court reversed the decision of the
D.C. Circuit, holding that HHS may not vary payment rates for drugs and
biologicals among groups of hospitals under section
1833(t)(14)(A)(iii)(II) in the absence of having conducted a survey of
hospitals' acquisition costs under subparagraph (t)(14)(A)(iii)(I).
While the Supreme Court's decision concerned payment rates for CYs 2018
and 2019, it obviously has implications for CY 2023 payment rates.
However, given the timing of the Supreme Court's decision, we lacked
the necessary time to incorporate the adjustments to the proposed
payment rates and budget neutrality calculations to account for that
decision before issuing this proposed rule, as explained further below.
For that reason alone, the payment rates, tables, and addenda in this
proposed rule reflect a payment rate of ASP minus 22.5 percent for
drugs and biologicals acquired through the 340B program for CY 2023,
consistent with our prior policy. However, we are also providing 340B
Alternate supporting files, which provide information regarding the
effects of removing the 340B program payment policy for CY 2023. We
fully anticipate applying a rate of ASP+6 percent to such drugs and
biologicals in the final rule for CY 2023, in light of the Supreme
Court's recent decision. We are still evaluating how to apply the
Supreme Court's recent decision to prior cost years.
Each year since 2018, we have continued our policy of paying for
drugs and biologicals acquired through the 340B Program at ASP minus
22.5 percent. When we were developing this proposed rule, we intended
to propose to continue our 340B policy, which was upheld by the D.C.
Circuit Court of Appeals. That is, the rates that we previously
developed, the tables, and the addenda that are part of this proposed
rule build on the policy that had been in effect since 2018, which
[[Page 44648]]
paid for drugs and biologicals at one rate if they were acquired
through the 340B program (ASP minus 22.5 percent), and at another rate
if they were not acquired through the 340B program (ASP+6 percent).
Development of the annual OPPS proposed rule begins several months
before publication. This process includes formulating proposed policies
and calculating proposed rates, which then must be adjusted to maintain
budget neutrality. In particular, section 1833(t)(9)(B) requires that
if the Secretary makes adjustments under subparagraph (A) of that
section to the groups, the relative payment weights, or the wage or
other adjustments, those adjustments for the year may not cause the
estimated amount of expenditures under this part for the year to
increase or decrease from the estimated amount of expenditures that
would have been made absent those adjustments. When the Supreme Court's
decision was issued on June 15, 2022, we had already developed the
policies we intended to include in the proposed rule and calculated the
payment rates, which included application of an adjustment to maintain
budget neutrality. There was not sufficient time remaining in the
proposed rule development process for us to change the policy and
accompanying rates in response to the Supreme Court's decision. The
OPPS is a calendar year payment system and to ensure OPPS payment rates
and policies are effective on January 1, 2023, we must issue the final
rule with comment period in early November to allow for the 60-day
delayed effective date that the Congressional Review Act (CRA) (5
U.S.C. 801(a)(3)) requires for major rules. We generally attempt to
issue the annual OPPS/ASC proposed rule by early July to ensure that
there is sufficient time to allow for the 60-day public comment period
required by section 1871(b)(1) of the Act, followed by review of public
comments and development of the final rule in time for the early
November issuance date. If we were to change the policy and
accompanying rates in response to the Supreme Court's decision, the
proposed rule would be substantially delayed, which would jeopardize
our ability to develop the final rule in time to meet the early
November deadline required to adhere to the CRA's 60-day delayed
effective date requirement. Therefore, the rates, tables, and addenda
in this proposed rule reflect the proposal to pay for drugs differently
if they were acquired through the 340B program, namely at ASP minus
22.5 percent, with the anticipated savings redistributed to all other
items and services in a budget neutral manner. If interested parties or
members of the public wish to comment on the propriety of maintaining
differential payment for 340B-acquired drugs in the future, or other
aspects of these as-published rates, we will consider such comments,
subject to the constraints of the Supreme Court's recent decision.
That said, as we noted earlier, in light of the Supreme Court's
decision in American Hospital Association, we fully anticipate
reverting to our prior policy of paying ASP+6 percent, regardless of
whether a drug was acquired through the 340B program. We advise readers
that a reversion to that policy will have an effect on the payment
rates for other items and services due to the budget neutral nature of
the OPPS system. To maintain OPPS budget neutrality under our
anticipated final policy where non-pass-through separately payable OPPS
drugs purchased under the 340B program are paid at ASP+6 percent in CY
2023, we would need to determine the change in estimated OPPS spending
associated with the alternative policy. Based on separately paid line
items with the ``JG'' modifier in the CY 2021 claims available for OPPS
ratesetting, which represent all drug lines for which the 340B program
payment policy applied, the estimated payment differential would be an
increase of approximately $1.96 billion in OPPS drug payments. To
ensure budget neutrality under the OPPS after applying this alternative
payment methodology for drugs and biologicals purchased under the 340B
Program, we would apply this offset of approximately $1.96 billion to
decrease the OPPS conversion factor, which would result in a budget
neutrality adjustment of 0.9596 to the OPPS conversion factor, for a
revised conversion factor of $83.279. This is a similar application of
OPPS budget neutrality as originally applied to the OPPS 340B program
payment policy described in the CY 2018 OPPS final rule (82 FR 59258,
82 FR 59482 through 59484). In the CY 2018 OPPS final rule, this budget
neutrality adjustment increased the conversion factor to budget
neutralize the decreased spending for drugs acquired through the 340B
program in CY 2018. Under our anticipated final policy, we would apply
that same calculation but we would decrease the conversion factor to
budget neutralize the increased spending associated with payments for
drugs acquired through the 340B program that would result from
increasing the rate of ASP minus 22.5 percent to ASP+6 percent. We note
that the amount of this adjustment would potentially change in the
final rule due to updated data, potential modifications to the estimate
methodology, and other factors. A table detailing the impact on
hospital outpatient payment rates of removing the payment differential
for 340B drugs and the corresponding budget neutrality adjustment for
CY 2023 is included in the 340B Alternative supporting files.
b. Payment for 340B Drugs and Biologicals in CYs 2018 Through 2022
For full descriptions of our OPPS payment policy for drugs and
biologicals acquired under the 340B program, we refer readers to the CY
2018 OPPS/ASC final rule with comment period (82 FR 59353 through
59371); the CY 2019 OPPS/ASC final rule with comment period (83 FR
59015 through 59022); the CY 2021 OPPS/ASC final rule with comment
period (85 FR 86042 through 86055); and the CY 2022 OPPS/ASC final rule
with comment period (86 FR 63640 through 63649).
Our policies for 340B-acquired drugs have been the subject of
ongoing litigation, the procedural history of which is generally
described above. 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.
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. In January of 2021, appellees petitioned the United States
Supreme Court for a writ of certiorari. On July 2, 2021, the Supreme
Court granted the petition and heard oral arguments in November 2021.
And, as noted above, the Supreme Court reversed the decision of the
D.C. Circuit.
Before the D.C. Circuit upheld our authority to pay ASP minus 22.5
percent for 340B drugs, 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.
[[Page 44649]]
We stated that such survey data may be used in setting the Medicare
payment amount for drugs acquired by 340B hospitals for 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.\123\ No 340B hospital
disputed in the rulemakings for CY 2018 and 2019 that the ASP minus
22.5 percent formula was a conservative adjustment that represented the
minimum discount that hospitals receive for drugs acquired through the
340B program, which is significant because 340B hospitals have internal
data regarding their own drug acquisition costs. We stated in the CY
2020 OPPS/ASC final rule with comment period that we thus anticipated
that survey data collected for CY 2018 and 2019 would confirm that the
ASP minus 22.5 percent rate is a conservative amount that
overcompensates covered entity hospitals for drugs acquired under the
340B program. We also explained that a remedy that relies on such
survey data could avoid the complexities referenced in the district
court's opinion. For a complete discussion of the Hospital Acquisition
Cost Survey for 340B-Acquired Specified Covered Outpatient Drugs, we
refer readers to the CY 2021 OPPS/ASC proposed rule (85 FR 48882
through 48891) and the CY 2021 OPPS/ASC final rule with comment period
(85 FR 86042 through 86055). We proposed a net payment rate for 340B
drugs of ASP minus 28.7 percent (minus 34.7 percent plus 6 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. On July 31, 2020, the D.C. Circuit reversed the
decision of the district court, holding that this interpretation of the
statute was reasonable.
---------------------------------------------------------------------------
\123\ See American Hosp. Assoc. v. Azar, 348 F. Supp. 3d 62, 82
(D.D.C. 2018).
---------------------------------------------------------------------------
During CY 2021 rulemaking, based on feedback from interested
parties, we stated that we believed maintaining the policy of paying
ASP minus 22.5 percent for 340B drugs was appropriate to maintain
consistent and reliable payment for these drugs to give hospitals
increased certainty as to payments for these drugs. For CY 2022, we
continued this 340B policy without modification as described in the CY
2022 OPPS/ASC final rule with comment period (86 FR 63648).
We are still evaluating how to apply the Supreme Court's recent
decision to cost years 2018-2022. In that decision, the Court
summarized the parties' arguments regarding budget neutrality and
stated that, ``[a]t this stage, we need not address potential
remedies.'' We are additionally interested in public comments on the
best way to craft any proposed, potential remedies affecting calendar
years 2018-2022 given that the Court did not resolve that issue.
c. CY 2023 Proposed 340B Drug Payment Policy
As discussed above, given the timing of the Supreme Court's
decision in American Hospital Association v. Becerra, we lacked the
necessary time to account for that decision before issuing this
proposed rule. For that reason alone, for CY 2023, we formally propose
at this time 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. But again,
in light of the Supreme Court's decision, we fully anticipate adopting,
in the final rule, a policy of paying ASP+6 percent for 340B-acquired
drugs and biologicals. This formal proposal is in accordance with the
policy choices and calculations that CMS made in the months leading up
to publication of this proposed rule before the Supreme Court issued
its decision in American Hospital Association v. Becerra, No. 20-1114,
2022 WL 2135490 (June 15, 2022). We propose, 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 formally propose to continue our current policy for
calculating payment for 340B-acquired biosimilars, which is discussed
in section V.B.2.c. of the CY 2019 OPPS/ASC final rule with comment
period, and would continue the policy we finalized in CY 2019 to pay
ASP minus 22.5 percent for 340B-acquired drugs and biologicals
furnished in nonexcepted off-campus PBDs paid under the PFS.
We also formally propose to continue the 340B payment adjustment
for WAC-priced drugs, which is WAC minus 22.5 percent. The 340B-
acquired drugs that are priced using AWP would continue to be paid an
adjusted amount of 69.46 percent of AWP. Additionally, we propose 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 also formally propose 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''.
Again, we note that, in light of the Supreme Court's recent
decision in American Hospital Association, we fully anticipate
reverting to our prior policy of paying for drugs at ASP+6 percent,
regardless of whether they were acquired through the 340B program for
CY 2023. We also fully expect that when we revert to paying for drugs
acquired through the 340B program at ASP+6 percent, we will budget
neutralize that increase consistent with the OPPS statute and our
longstanding policy by making a corresponding decrease to the
conversion factor to account for the increase in the payment rates for
these drugs. As set forth above, to ensure budget neutrality under the
OPPS, after applying this alternative payment methodology for drugs and
biologicals purchased under the 340B Program, we currently estimate
that we would apply an offset of approximately $1.96 billion to
decrease the OPPS conversion factor, which would result in a budget
neutrality adjustment of 0.9596 to the OPPS conversion factor, for a
revised conversion factor of $83.279.
Public comments on the budget neutrality adjustment are welcome and
will be carefully considered. For a more detailed discussion of the
budget neutralizing effects of reverting to this prior policy of paying
for all drugs (whether 340B-acquired or not) at ASP+6 percent, please
see the 340B Alternative supporting files, which include an alternative
impact table, the calculation of a 340B Alternative conversion factor,
the budget neutrality factors associated with the 340B Alternative
policy, and Addenda A, B, and C, all of which provide information
regarding the effects of removing the 340B program payment policy for
CY 2023.
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
[[Page 44650]]
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). In the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66886), we stated that skin substitutes are best
characterized as either surgical supplies or devices because of their
required surgical application and because they share significant
clinical similarity with other surgical devices and supplies.
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 2022, the payment rate for APC
5053 (Level 3 Skin Procedures) was $596.39, the payment rate for APC
5054 (Level 4 Skin Procedures) was $1,774.73, and the payment rate for
APC 5055 (Level 5 Skin Procedures) was $3,326.39. This information is
also available in Addenda A and B of the CY 2022 final rule with
comment period, as issued with the final rule correction notice (87 FR
2058) (the correction notice and corrected Addenda A and B are
available via the internet on the CMS website).
We have continued the high cost/low cost categories policy since CY
2014, and we propose to continue it for CY 2023. 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). For
more detailed information and discussion regarding the goals of this
policy and the subsequent comment solicitations in CY 2019 and CY 2020
regarding possible alternative payment methodologies for graft skin
substitute products, please refer to the CY 2018 OPPS/ASC final rule
with comment period (82 FR 59347); CY 2019 OPPS/ASC final rule with
comment period (83 FR 58967 to 58968); and the CY 2020 OPPS/ASC final
rule with comment period (84 FR 61328 to 61331).
b. Proposals for Packaged Skin Substitutes for CY 2023
For CY 2023, consistent with our policy since CY 2016, we propose
to continue to determine the high cost/low cost status for each skin
substitute product based on either a product's geometric 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
[[Page 44651]]
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 2023 MUC threshold is $47 per
cm\2\ (rounded to the nearest $1) and the proposed CY 2023 PDC
threshold is $837 (rounded to the nearest $1). We 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 2023, as we did for CY 2022, we propose to assign each skin
substitute that exceeds either the MUC threshold or the PDC threshold
to the high cost group. In addition, we propose to assign any skin
substitute with a MUC or a PDC that does not exceed either the MUC
threshold or the PDC threshold to the low cost group except that we
propose that any skin substitute product that was assigned to the high
cost group in CY 2022 would be assigned to the high cost group for CY
2023, regardless of whether it exceeds or falls below the CY 2023 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 2023, we propose to continue to assign skin substitutes with
pass-through payment status to the high cost category. We propose to
assign skin substitutes with pricing information but without claims
data to calculate a geometric MUC or PDC to either the high cost or low
cost category based on the product's ASP+6 percent payment rate as
compared to the MUC threshold. If ASP is not available, we propose to
use WAC+3 percent to assign a product to either the high cost or low
cost category. Finally, if neither ASP nor WAC is available, we propose
to use 95 percent of AWP to assign a skin substitute to either the high
cost or low cost category. We propose to continue to use WAC+3 percent
instead of WAC+6 percent to conform to our proposed policy described in
section V.B.2.b of this proposed rule to establish a payment rate of
WAC+3 percent for separately payable drugs and biologicals that do not
have ASP data available. New skin substitutes without pricing
information would be assigned to the low cost category until pricing
information is available to compare to the CY 2023 MUC and PDC
thresholds. 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).
In the CY 2023 PFS proposed rule, which will be included in the
July 29, 2022 Federal Register, there is a proposal to treat all skin
substitute products consistently across healthcare settings as
incident-to supplies described under section 1861(s)(2) of the Act. If
this proposed policy is finalized, manufacturers would not report ASPs
for skin substitute products starting in CY 2023; and we would no
longer be able to use ASP+6 percent pricing for a graft skin substitute
product to determine whether the product should be assigned to the high
cost group or the low cost group. However, manufacturers would continue
to report WAC and AWP pricing information for skin substitute products
through pricing compendia. Having WAC and AWP pricing will allow us to
continue to use our alternative process to assign graft skin substitute
products to the high cost group when cost data for a product is not
available.
Table 44 includes the final CY 2023 cost category assignment for
each skin substitute product.
BILLING CODE 4120-01-P
[[Page 44652]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.060
[[Page 44653]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.061
[[Page 44654]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.062
[[Page 44655]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.063
BILLING CODE 4120-01-C
c. Proposed Retirement of HCPCS Code C1849 (Skin Substitute, Synthetic,
Resorbable, by per Square Centimeter)
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86064
to 86067), we revised our description of skin substitutes to include
synthetic products, in addition to biological products. We also
established HCPCS code C1849 to facilitate payment for synthetic graft
skin substitute products in the outpatient hospital setting. 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, and was designed to describe
any synthetic graft skin substitute product. We did not anticipate
creating product specific HCPCS codes for synthetic graft skin
substitute products.
We assigned HCPCS code C1849 to the high cost skin substitute group
based on our alternative methodology to assign products with WAC or AWP
pricing that exceeds the MUC threshold to the high cost skin substitute
group (85 FR 86066). When the CY 2021 OPPS/ASC final rule with comment
period was issued, we were aware of one synthetic graft skin substitute
product described by HCPCS code C1849. The manufacturer provided WAC
pricing data that showed the cost of the product was above the MUC
threshold for graft skin substitute products and therefore we
determined that HCPCS code C1849 should be assigned to the high cost
skin substitute group. We noted that, as more synthetic graft skin
substitute products are identified as being described by HCPCS code
C1849, we would use their pricing data to calculate an average price
for the products described by HCPCS code C1849 to determine whether
HCPCS code C1849 should be assigned to the high cost or low cost skin
substitute group. In the CY 2022 OPPS/ASC final rule with comment
period, we stated that we had identified multiple synthetic skin
substitute products that could be described by HCPCS code C1849. The
average of the WAC pricing data for these products exceeded the MUC
threshold (86 FR 63563). Therefore, we assigned HCPCS code C1849 to the
high cost skin substitute group in CY 2022 (86 FR 63652).
While we created a single synthetic skin substitute HCPCS code for
use under the OPPS beginning in CY 2021, for the physician office
setting we established product-specific HCPCS codes for several graft
skin substitute products that were described as synthetic skin
substitute products in CY 2022 (86 FR 65119 through 65123). Because we
anticipated that any graft skin substitute product assigned to the
HCPCS A2XXX code series would be a synthetic product that also would be
described by HCPCS code C1849 under the OPPS, we decided that graft
skin substitute products assigned to the HCPCS A2XXX series would not
be payable under the OPPS. Although we would pay for these products
when identified by codes in the HCPCS A2XXX series in the physician
office setting, it was not necessary to also make these codes payable
under the OPPS because we had established HCPCS code C1849 to report
the use of synthetic graft skin substitute products with graft skin
substitute procedures for payment under the OPPS.
Starting in January 2022, however, all new skin substitute products
with an FDA 510(k) clearance received product-specific A-codes in the
HCPCS A2XXX series. FDA 510(k)-cleared skin substitute products include
both biological products that are not human cell, tissue, or cellular
or tissue-based products (HCT/Ps) as well as synthetic products. The
use of product-specific A-codes to identify all FDA 510(k) skin
substitute products meant that several of the graft skin substitute
products assigned product-specific codes in the A2XXX series starting
January 1, 2022 were biological graft skin substitutes with an FDA
510(k) clearance. While graft synthetic skin substitute products are
described by HCPCS code C1849, FDA 510(k)-cleared biological products
are not. However, for OPPS purposes, all graft skin substitute products
with product-specific A-codes were assigned status indicator A under
the OPPS (Not paid under the OPPS. Paid by [Medicare Administrative
Contractors] under a fee schedule or payment system other than the
OPPS). Previously, biological skin substitute products with an FDA
510(k) clearance were assigned product-specific Q-codes, which are
bundled into payment with the associated procedure under the OPPS.
However, starting in January 2022, skin substitute products with a FDA
510(k) clearance were no longer being assigned product-specific Q-
codes.
Because some of the codes in the HCPCS A2XXX series identify
biological skin substitute products that need to be payable under the
OPPS, and because we cannot make only certain codes in the HCPCS A-code
series payable and not others, we made the HCPCS A2XXX series payable
under the OPPS earlier this year. Effective April 1, 2022, in the
``April 2022 Update of the Hospital Outpatient Prospective Payment
System (OPPS)--Change Request 12666'' (https://www.cms.gov/files/document/r11305cp.pdf), we changed the status indicator of all skin
substitute products described in the HCPCS A2XXX series, including
synthetic graft skin substitutes, to ``N'' (Paid under OPPS; payment is
packaged into payment for other services). This change allowed packaged
payment under the OPPS to be made for these products when furnished
with skin substitute application procedures in the hospital outpatient
department setting. We also assigned unclassified skin substitute
products described by HCPCS code A4100 (Skin substitute, FDA cleared as
a device, not otherwise specified) status indicator ``N'' in this
Change Request and provided that payment for products identified with
this code is packaged under the OPPS. HCPCS code A4100 is used to
describe skin substitute products with FDA 510(k) clearance that
[[Page 44656]]
do not have a product-specific HCPCS code, which includes unclassified
synthetic graft skin substitutes. Graft skin substitute products with
product-specific codes in the HCPCS A2XXX series or that are described
by HCPCS code A4100 are subject to the same policies as other graft
skin substitute products as described by section V.B.7.b of the CY 2022
OPPS/ASC final rule with comment (86 FR 63650 through 63658).
Because we now make payment under the OPPS for product-specific
HCPCS A-codes for synthetic graft skin substitute products and for
unclassified synthetic graft skin substitute products and other
unclassified FDA 510(k)-cleared products identified by HCPCS code
A4100, HCPCS code C1849 is no longer necessary to bill for these
products when they are used in the hospital outpatient department with
graft skin substitute application procedures. In addition to being
unnecessary, we are also concerned that the continued existence of
HCPCS code C1849 may lead to confusion among providers regarding which
HCPCS code to report on a claim if it is not retired, as there are
currently two codes that can be reported in the hospital outpatient
department setting when a synthetic graft skin substitute product is
used: HCPCS code C1849, which can be used for any synthetic skin
substitute, or the code in the HCPCS A2XXX series that describes the
specific synthetic graft skin substitute product. For these reasons, we
believe it is important to retire HCPCS code C1849.
Nonetheless, we do not simply want to retire this code without
making accompanying proposals to ensure that synthetic graft skin
substitute products that either currently have a product-specific HCPCS
code or may receive a product-specific HCPCS code in the future and are
currently assigned to the high cost skin substitute group continue to
be assigned to the high cost skin substitute group after the retirement
of HCPCS code C1849. Most synthetic graft skin substitute products have
less than 2 years of claims data and would not have cost data for us to
review to determine if the products could be assigned to the high cost
group. If the product manufacturers do not send WAC pricing data to us,
the products would have to be assigned to the low cost group because of
a lack of cost information. Submitting WAC pricing to have a skin
substitute assigned to the high cost group is voluntary for
manufacturers. Establishing a policy to continue to assign synthetic
graft skin substitute products that are currently described by HCPCS
code C1849 or would be described by HCPCS code C1849 to the high cost
skin substitute group would allow manufacturers and providers to better
forecast payment for synthetic graft skin substitute products, and
protect them from unanticipated payment reductions. This proposal is
consistent with our proposed policy in section V.B.7.b in this proposed
rule that any skin substitute product that was assigned to the high
cost group in CY 2022 would be continue to be assigned to the high cost
group for CY 2023, regardless of whether it exceeds or falls below the
CY 2023 MUC or PDC threshold, which has been our standard practice
since CY 2018. Both of these proposals promote price stability for both
manufacturers and providers and eliminate the risk that a skin
substitute product that is currently assigned to the high cost skin
substitute group would be reassigned to the low cost skin substitute
group.
In summary, for CY 2023, we propose to delete HCPCS code C1849
(Skin substitute, synthetic, resorbable, by per square centimeter). We
also propose that any graft skin substitute product that is currently
assigned a product-specific code in the HCPCS A2XXX series and is
appropriately described by HCPCS code C1849 or is assigned a product-
specific code in the HCPCS A2XXX series in the future and is
appropriately described by HCPCS code C1849 be assigned to the high
cost skin substitute group. We want to ensure synthetic graft skin
substitute products continue to remain in the high cost skin substitute
group throughout CY 2023 and do not risk reassignment to the low cost
group during the transition from using HCPCS code C1849 to a product-
specific A-codes even if cost and pricing data are not available for
these products. We believe this policy would promote payment stability
for providers and other stakeholders when using synthetic graft skin
substitute products consistent with our long-standing policy that keeps
graft skin substitute products in the high cost group for subsequent
years once a product is assigned to the high cost group for a given
year.
We also propose that HCPCS code A4100 (Skin substitute, fda cleared
as a device, not otherwise specified) be assigned to the low cost skin
substitute group, which is consistent with our existing payment policy
that unclassified graft skin substitute products be assigned to the low
cost skin substitute group. We look forward to comments on these
proposals.
d. Key Objectives/Roadmap for Consistent Treatment of Skin Substitutes
We believe outlining our HCPCS Level II coding and payment policy
objectives in this proposed rule will be beneficial for interested
parties, as we work to create a consistent approach for treatment of
the suite of products we have referred to as skin substitutes. We have
a number of objectives related to refining Medicare policies in this
area, including: (1) ensuring a consistent payment approach for skin
substitute products across the physician office and hospital outpatient
department setting; (2) ensuring that all skin substitute products are
assigned an appropriate HCPCS code; (3) using a uniform benefit
category across products within the physician office setting,
regardless of whether the product is synthetic or comprised of human or
animal based material, so we can incorporate payment methodologies that
are more consistent; and (4) maintaining clarity for interested parties
on CMS skin substitutes policies and procedures. Interested parties
have asked CMS to address what they have described as inconsistencies
in our payment and coding policies, indicating that treating clinically
similar products (for example, animal-based and synthetic skin
products) differently for purposes of payment is confusing and
problematic for healthcare providers and patients. These concerns exist
specifically within the physician office setting; however, interested
parties have also indicated that further alignment of our policies
across the physician office and hospital outpatient department settings
would reduce confusion.
Interested parties have suggested that all skin substitutes,
regardless of the inclusion of human, animal, or synthetic material in
the product, should be treated as drugs and biological products.
Furthermore, they believe all skin substitute products should receive
product-specific ``Q'' codes and receive separate payment under the
ASP+6 methodology. They have expressed confusion regarding our
assignment of HCPCS Level II ``A'' codes to the 10 skin substitute
products in accordance with the policy finalized in the CY 2022 PFS
final rule, which we typically assign to identify ambulance services
and medical supplies, instead of ``Q'' codes, which we typically assign
to identify drugs, biologicals, and medical equipment or services not
identified by national HCPCS Level II codes. They have indicated that
the use of ``A'' HCPCS codes has caused confusion, not only for
interested parties, but also for the A/B MACs, who
[[Page 44657]]
the interested parties assert, have inconsistently processed submitted
claims, in part because they are assigned HCPCS ``A'' codes that are
treated as supplies, which are subject to contractor pricing under the
PFS. Additionally, interested parties have expressed concern that
physicians and other practitioners are hesitant to use the products
associated with ``A'' codes because they are unsure if they will be
paid appropriately for using those products. When considering potential
changes to policies involving skin substitutes, we believe it would be
appropriate to take a phased approach over the next 1 to 5 years, that
allows CMS sufficient time to consider input from interested parties on
coding and policy changes primarily through our rulemaking process, and
to account for FDA's regulation of these products, with the goal of
avoiding unintended impacts on access to medically necessary care
involving the use of these products.
We welcome comment on our policy objectives for creating a
consistent approach for treatment of the suite of products we have
referred to as skin substitutes. Additionally, we welcome feedback on
our phased approach and associated timeline. To achieve our objective
of creating a consistent approach for paying for skin substitutes
across the physician office and hospital outpatient department setting,
we are including similar proposed changes in the CY 2023 PFS proposed
rule, which will be issued near the time this proposed rule is issued.
e. Changing the Terminology of Skin Substitutes
As we work to clarify our policies for these products, we believe
that the existing terminology of ``skin substitutes'' is problematic as
it is an overly broad misnomer. In the CY 2021 OPPS/ASC final rule with
comment period, we revised our description of skin substitutes to refer
to 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 (85 FR 80605). We noted that skin
substitute products are not a substitute for a skin graft as they do
not actually function like human skin that is grafted onto a wound.
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. We also clarified that our definition of skin
substitutes does not include bandages or standard dressings, and that
within the hospital outpatient department, 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. (85 FR 86066).
While this definition has been updated to provide clarity in that
synthetic products are considered to be skin substitutes, there is
still confusion with the usage of the term skin substitutes because, as
noted above in the definition, these skin substitute products are
technically not a substitute for skin, but rather, a wound covering
that is used to promote healing. We have used the term ``skin
substitutes'' to describe the suite of products that are currently
referred to as skin substitutes. Additionally, the term ``skin
substitutes'' is used within the Current Procedural Terminology
(CPT[supreg]) code series 15271-8 as maintained by American Medical
Association. Also, skin substitute products are generally regulated by
the FDA as medical devices under section 510(k) of the Federal Food,
Drug and Cosmetic (FD&C) Act and implementing regulations per 21 CFR
part 807, or as HCT/Ps solely under section 361 of the PHS Act and the
FDA regulations in 21 CFR part 1271.
We believe that improving how we reference these products by using
a more accurate and meaningful term will help address confusion among
interested parties about how we describe these products, and further,
how we pay for them. We propose to replace the term ``skin
substitutes'' with the term ``wound care management'' or ``wound care
management products.'' We believe this new term more accurately
describes the suite of products that are currently referred to as skin
substitutes while providing enough specificity to not include bandages
or standard dressings, which, as noted above, are not considered skin
substitutes. We understand that our proposed terms contain ``care
management'' which could be construed to implicate the care management
series of AMA CPT codes (e.g., 99424-99427, 99437, 99439, 99487, 99489,
99490-99491) that are commonly used by healthcare professionals. We
also understand that the use of our proposed terms with ``management''
in our proposed terms might be construed by some to implicate AMA CPT
Evaluation or Assessment and Management (E/M) codes. We would like to
clarify that the proposed terms ``wound care management'' and ``wound
care management products'' would not implicate the care management
series of AMA CPT codes (e.g., 99424-99427, 99437, 99439, 99487, 99489,
99490-99491), or our own G-codes that describe care management
services. Nor would our proposed terms relate to the AMA CPT E/M codes.
Unlike ``care management'' or ``evaluation and management'' codes and
services, the proposed terms would describe a category of items or
products, not a type of services. Lastly, we also considered alternate
terms such as wound coverings, wound dressings, wound care products,
skin coverings and cellular and/or tissue-based products for skin
wounds but believe the proposed terms are more technically accurate and
descriptive for how these products are used than the alternative's
considered.
We solicit feedback on our proposal to change the terminology we
use for the suite of products referred to as ``skin substitutes'' to
instead use the term ``wound care management'' or ``wound care
management products'' and on the alternative terms we considered,
including wound coverings, wound dressings, wound care products, skin
coverings and cellular and/or tissue-based products for skin wounds. We
are particularly interested in how these products are referenced in
current CPT coding and would appreciate feedback from the CPT Editorial
Panel and other interested parties on how to address the challenges we
discuss above. We also are interested in feedback on other possible
terms that could be used to more meaningfully and accurately describe
the suite of products currently referred to as skin substitutes.
8. Radioisotopes Derived From Non-Highly Enriched Uranium (Non-HEU)
Sources
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, has been produced
in legacy reactors outside of the United States using highly enriched
uranium (HEU).
The United States wanted to eliminate domestic reliance on these
reactors, and has been promoting the conversion of all medical
radioisotope production to non-HEU sources. Alternative methods for
producing Tc-99m without HEU are technologically and economically
viable, but it was expected that this change in the supply source for
the radioisotope used for modern medical imaging would introduce new
costs into the payment system that were not accounted for in the
historical claims data.
[[Page 44658]]
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 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 68323).
We stated in the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68321) that our expectation was that this additional payment
would be needed for the duration of the industry's conversion to
alternative methods to producing Tc-99m without HEU. We also stated
that we would reassess, and propose if necessary, on an annual basis
whether such an adjustment continued to be necessary and whether any
changes to the adjustment were warranted (77 FR 68321). A 2016 report
from the National Academies of Sciences, Engineering, and Medicine
anticipated the conversion of Tc-99m production from non-HEU sources
would be completed at the end of 2019.\124\ However, the Secretary of
Energy issued a certification effective January 2, 2020, stating that
there continued to be an insufficient global supply of molybdenum-99
(Mo-99), which is the source of Tc-99m, produced without the use of HEU
available to satisfy the domestic U.S. market (85 FR 3362). The January
2, 2020, certification was to remain in effect for up to two years.
---------------------------------------------------------------------------
\124\ National Academies of Sciences, Engineering, and Medicine.
2016. Molybdenum-99 for Medical Imaging. Washington, DC: The
National Academies Press. Available at: https://doi.org/10.17226/23563.
---------------------------------------------------------------------------
The Secretary of Energy issued a new certification regarding the
supply of non-HEU-sourced Mo-99 effective January 2, 2022 (86 FR
73270). This certification stated that there is a sufficient global
supply of Mo-99 produced without the use of HEU available to meet the
needs of patients in the United States. The Department of Energy also
expects that the last HEU reactor that produces Mo-99 for medical
providers in the United States will finish its conversion to a non-HEU
reactor by December 31, 2022. In CY 2019, we stated that we would
reassess the non-HEU incentive payment policy once conversion to non-
HEU sources is closer to completion or has been completed (83 FR
58979). There is now a sufficient supply of non-HEU-sourced Mo-99 in
the United States, and by CY 2023, there will be no available supply of
HEU-sourced Mo-99 in the United States. Therefore, we believe that the
conversion to non-HEU sources of Tc-99m has reached a point where a
reassessment of the policy is necessary.
In the OPPS, diagnostic radiopharmaceuticals are packaged into the
cost of the associated diagnostic imaging procedure no matter the per
day cost amount of the radiopharmaceutical. The cost of the
radiopharmaceutical is included as a part of the cost of the diagnostic
imaging procedure and is reported through Medicare claims data.
Medicare claims data used to set payment rates under the OPPS generally
is from two years prior to the payment year.
That means that the likely claims data used to set payment rates
for CY 2023 (CY 2021 claims data) and CY 2024 (CY 2022 claims data)
would likely contain claims for diagnostic radiopharmaceuticals that
would reflect both HEU-sourced Tc-99m and non-HEU-sourced Tc-99m,
rather than radiopharmaceuticals sourced solely from non-HEU Tc-99m.
The cost of HEU-sourced Tc-99m is substantially lower than the cost of
non-HEU-sourced Tc-99m. Therefore, providers using radiopharmaceuticals
that only contain non-HEU-sourced Tc-99m might not receive a payment
that is reflective of the radiopharmaceutical's current cost without
the add-on payment. We believe that extending the additional $10 add-on
payment described by HCPCS code Q9969 for non-HEU-sourced Tc-99m
through the end of CY 2024 would help to prevent any underpayment for
non-HEU-sourced Tc-99m. Starting in CY 2025, the Medicare claims data
utilized to set payment rates (likely CY 2023 claims data) will only
include claims for diagnostic radiopharmaceuticals that utilized non-
HEU-sourced Tc-99m, which means the data will reflect the full cost of
the Tc-99m diagnostic radiopharmaceuticals that will be used by
providers in CY 2025. As a result, there will no longer be a need for
the additional $10 add-on payment for CY 2025 or future years.
For CY 2023 and CY 2024, we propose to continue the additional $10
payment to ensure providers receive sufficient payment for diagnostic
radiopharmaceuticals containing Tc-99m until such time as the full cost
of non-HEU-sourced Tc-99m is reflected in the Medicare claims data. We
also propose that the additional $10 payment will end after December
31, 2024, since beginning with CY 2025, the Medicare claims data used
to set payment rates will reflect the full cost of non-HEU-sourced Tc-
99m. We look forward to comments on our proposals.
C. Proposal in Physician Fee Schedule Proposed Rule To Require HOPDs
and ASCs To Report Discarded Amounts of Certain Single-Dose or Single-
Use Package Drugs
Section 90004 of the Infrastructure Investment and Jobs Act (Pub.
L. 117-9, November 15, 2021) (``the Infrastructure Act'') amended
section 1847A of the Act to re-designate subsection (h) as subsection
(i) and insert a new subsection (h), which requires manufacturers to
provide a refund to CMS for certain discarded amounts from a refundable
single-dose container or single-use package drug. Section III.A. of the
CY 2023 PFS proposed rule includes proposals to implement section 90004
of the Infrastructure Act, including a proposal that hospital
outpatient departments (HOPDs) and ambulatory surgical centers (ASCs)
would be required to report the JW modifier or any successor modifier
to identify discarded amounts of refundable single-dose container or
single-use package drugs that are separately payable under the OPPS or
ASC payment system. Specifically, we propose in the CY 2023 PFS
proposed rule that the JW modifier would be used to determine the total
number of billing units of the HCPCS code (that is, the identifiable
quantity associated with a HCPCS code, as established by CMS) of a
refundable single-dose container or single-use package drug, if any,
that were discarded for dates of service during a relevant quarter for
the purpose of calculating the refund amount described in section
1847A(h)(3) of the Act. The CY 2023 PFS proposed rule also proposes to
require HOPDs and ASCs to use a separate modifier, JZ, in cases where
no billing units of such drugs were discarded and for which the JW
modifier would be required if there were discarded amounts.
Because the CY 2023 PFS proposed rule proposes to codify certain
billing requirements for HOPDs and ASCs, we want to ensure interested
parties are aware of them and know to refer to that rule for a full
description of the proposed policy. Interested parties should submit
comments on this and any other proposals to implement Section 90004 of
the Infrastructure Act in response to the CY 2023 PFS proposed rule.
Public comments on these proposals will be addressed in the CY 2023 PFS
final rule. We note that this same notice appears in section XIII.D.3
of this proposed rule.
[[Page 44659]]
VI. Proposed 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 2023 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 2023. 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 2022 or beginning in CY
2023. The sum of the proposed CY 2023 pass-through spending estimates
for these two groups of device categories equals the proposed total CY
2023 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 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 2023, we also propose to include
an estimate of any skin substitutes and similar products in our
estimate of pass-through spending for devices.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. Our estimate of drug and biological pass-through payment
for CY 2023 for this group of items is $622.6 million, as discussed
below, because we propose that most non pass-through separately payable
drugs and biologicals would be paid under the CY 2023 OPPS at ASP+6
percent with the exception of 340B-acquired separately payable drugs,
which we formally propose would be paid at ASP minus 22.5 percent, and
because we propose to pay for CY 2023 pass-through payment drugs and
biologicals at ASP+6 percent, as we discuss in section V.A of this
proposed rule. However, in light of the Supreme Court's recent
decision, we fully anticipate applying a rate of ASP+6 percent to 340B
drugs and biologicals in the final rule for CY 2023, in which case our
estimate of drug and biological pass-through payment for CY 2023 for
this group of items is $29.9 million.
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 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
this proposed rule. We propose that all of these policy-packaged drugs
and biologicals with pass-through payment status will be paid at ASP+6
percent, like other pass-through drugs and biologicals, for CY 2023,
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 2023
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 this proposed rule, we discuss our policy to determine if the
costs of certain policy-packaged drugs or biologicals are already
packaged into the existing APC structure. If we determine that a
policy-packaged drug or biological approved for pass-through payment
resembles predecessor drugs or biologicals already included in the
costs of the APCs that are associated with the drug receiving pass-
through payment, we propose to offset the amount of pass-through
payment for the policy-packaged drug or biological. For these drugs or
biologicals, the APC offset amount is the portion of the APC payment
for the specific procedure performed with the pass-through drug or
biological, which we refer to as the policy-packaged drug APC offset
amount. If we determine that an offset is appropriate for a specific
policy-packaged drug or biological receiving pass-through payment, we
propose to reduce our estimate of pass-through payments for these drugs
or biologicals by the APC offset amount.
Similar to pass-through spending estimates for devices, the first
group of drugs and biologicals requiring a pass-
[[Page 44660]]
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 2023. 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 2022 or beginning in
CY 2023. The sum of the CY 2023 pass-through spending estimates for
these two groups of drugs and biologicals equals the total CY 2023
pass-through spending estimate for drugs and biologicals with pass-
through payment status.
B. Proposed Estimate of Pass-Through Spending for CY 2023
For CY 2023, we propose to set the applicable pass-through payment
percentage limit at 2.0 percent of the total projected OPPS payments
for CY 2023, consistent with section 1833(t)(6)(E)(ii)(II) of the Act
and our OPPS policy from CY 2004 through CY 2022 (86 FR 63659). 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 2023, there are 14 active
categories for CY 2023. The active categories are described by HCPCS
codes C1052, C1062, C1734, C1748, C1761, C1823, C1824, C1825, C1831,
C1832, C1833, C1839, C1982 and C2596. Based on the information from the
device manufacturers, we estimate that HCPCS code C1052 will cost
$162,000 in pass-through expenditures in CY 2023, HCPCS C1062 will cost
$1.9 million in pass-through expenditures in CY 2023, HCPCS code C1734
will cost $2.2 million in pass-through expenditures in CY 2023, HCPCS
code C1748 will cost $2.2 million in pass-through expenditures in CY
2023, HCPCS code C1761 will cost $9.9 million in pass-through
expenditures in CY 2023, HCPCS code C1823 will cost $1.5 million in
pass-through expenditures in CY 2023, HCPCS code C1824 will cost $1.5
million pass-through expenditures in CY 2023, HCPCS code C1825 will
cost $749,000 in pass-through expenditures in CY 2023, HCPCS code C1831
will cost $29,900 in pass-through expenditures in CY 2023, HCPCS code
C1832 will cost $18.4 million in pass-through expenditures in CY 2023,
HCPCS code C1833 will cost $5.1 million in pass-through expenditures in
CY 2023, HCPCS code C1839 will cost $138,000 in pass-through
expenditures in CY 2023, HCPCS code C1982 will cost $1.2 million in
pass-through expenditures in CY 2023, HCPCS code C2596 will cost $2.8
million in pass-through expenditures in CY 2023. Therefore, we propose
an estimate for the first group of devices of $48 million.
In estimating our proposed CY 2023 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 proposed rule will be
newly eligible for pass-through payment in CY 2023; additional device
categories that we estimated could be approved for pass-through status
after the development of this proposed rule and before January 1, 2023;
and contingent projections for new device categories established in the
second through fourth quarters of CY 2023. For CY 2023, we propose to
use the general methodology described in the CY 2008 OPPS/ASC final
rule with comment period (72 FR 66778), while also taking into account
recent OPPS experience in approving new pass-through device categories.
For this proposed rule, the proposed estimate of CY 2023 pass-through
spending for this second group of device categories is $101.4 million.
To estimate proposed CY 2023 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 2023, we propose to use the CY 2021 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 2023 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 2023, 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, which we formally propose to pay
at 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 $592.7 million for this group of drugs.
However, in light of the Supreme Court's recent decision, we fully
anticipate applying a rate of ASP+6 percent to 340B drugs and
biologicals in the final rule for CY 2023, in which case, the proposed
payment rate difference between the pass-through payment amount and the
non pass-through payment amount is $0 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 propose to include in the CY 2023 pass-through
estimate the difference between payment for the policy-packaged drug or
biological at ASP+6 percent (or WAC+6 percent, or 95 percent of AWP, if
ASP or WAC information is not available) and the policy-packaged drug
APC offset amount, if we determine that the policy-packaged drug or
biological approved for pass-through payment resembles a predecessor
drug or biological already included in the costs of the APCs that are
associated with the drug receiving pass-through payment, which we
estimate for CY 2023 for the first group of policy-packaged drugs to be
$19.9 million.
To estimate proposed CY 2023 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 this proposed rule were newly
eligible or recently became eligible for pass-through payment in CY
2023, additional drugs and biologicals that we estimated could be
approved for pass-through status subsequent to the development of this
proposed rule and before January 1, 2023, and projections for new drugs
and biologicals that could be initially eligible for pass-through
payment in the second through fourth quarters of CY 2023), we propose
to use utilization estimates from pass-through applicants,
pharmaceutical industry data, clinical information, recent trends in
the per unit ASPs of hospital outpatient drugs, and projected annual
changes in service volume and intensity as our basis for making the CY
2023 pass-through payment estimate. We also propose to consider the
most recent OPPS experience in approving new pass-through drugs and
biologicals. Using our proposed methodology for estimating CY 2023
pass-through payments for this second group of drugs, we calculated a
proposed
[[Page 44661]]
spending estimate for this second group of drugs and biologicals of
approximately $10 million.
We estimate for this proposed rule 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 2023 and those
device categories, drugs, and biologicals that first become eligible
for pass-through payment during CY 2023 would be approximately $772.0
million (approximately $149.4 million for device categories and
approximately $622.6 million for drugs and biologicals) which
represents 0.90 percent of total projected OPPS payments for CY 2023
(approximately $86.2 billion). In light of the Supreme Court's recent
decision, we fully anticipate applying a rate of ASP+6 percent to 340B
drugs and biologicals in the final rule for CY 2023, in light of the
Supreme Court's recent decision, in which case we would estimate for
this proposed rule 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 2023 and those device categories,
drugs, and biologicals that first become eligible for pass-through
payment during CY 2023 would be approximately $179.3 million
(approximately $149.4 million for device categories and approximately
$29.9 million for drugs and biologicals). This alternative would
represent only 0.21 percent of total projected OPPS payments for CY
2023. Therefore, we estimate that pass-through spending in CY 2023 will
not amount to 2.0 percent of total projected OPPS CY 2023 program
spending.
VII. Proposed OPPS Payment for Hospital Outpatient Visits and Critical
Care Services
For CY 2023, we propose to continue with our current clinic and
emergency department (ED) hospital outpatient visits payment policies.
For a description of these policies, we refer readers to the CY 2016
OPPS/ASC final rule with comment period (80 FR 70448). We also propose
to continue our payment policy for critical care services for CY 2023.
For a description of this policy, we refer readers to the CY 2016 OPPS/
ASC final rule with comment period (80 FR 70449), and for the history
of this payment policy, we refer readers to the CY 2014 OPPS/ASC final
rule with comment period (78 FR 75043).
In this proposed rule, we are seeking public comments on any
changes to these codes that we should consider for future rulemaking
cycles. We continue to encourage commenters to provide the data and
analysis necessary to justify any suggested changes.
As we stated in the CY 2022 OPPS/ASC final rule with comment period
(86 FR 63663), the clinic visit payment policy applies for CY 2023 and
subsequent years. More specifically, we are continuing to utilize a
PFS-equivalent payment rate for the hospital outpatient clinic visit
service described by HCPCS code G0463 when it is furnished by excepted
off-campus provider-based departments. The PFS-equivalent rate for CY
2023 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 2023) for the clinic visit service in CY 2023. Additionally, for CY
2023 we propose that excepted off-campus provider-based departments
(PBDs) (departments that bill the modifier ``PO'' on claim lines) of
rural Sole Community Hospitals, as described under 42 CFR 412.92 and
designated as rural for Medicare payment purposes, would be exempt from
the clinic visit payment policy that applies a Physician Fee Schedule-
equivalent payment rate for the clinic visit service, as described by
HCPCS code G0463, when provided at an off-campus PBD excepted from
section 1833(t)(21) of the Act. For the full discussion of this
proposal we refer readers to section X of this proposed rule. We will
continue to monitor the effect of this change in Medicare payment
policy, including on the volume of these types of OPD services.
VIII. Proposed Payment for Partial Hospitalization Services
A. Background
A partial hospitalization program (PHP) is an intensive outpatient
program of psychiatric services provided as an alternative to inpatient
psychiatric care for individuals who have an acute mental illness,
which includes, but is not limited to, conditions such as depression,
schizophrenia, and substance use disorders. Section 1861(ff)(1) of the
Act defines partial hospitalization services as the items and services
described in paragraph (2) prescribed by a physician and provided under
a program described in paragraph (3) under the supervision of a
physician pursuant to an individualized, written plan of treatment
established and periodically reviewed by a physician (in consultation
with appropriate staff participating in such program), which sets forth
the physician's diagnosis, the type, amount, frequency, and duration of
the items and services provided under the plan, and the goals for
treatment under the plan. Section 1861(ff)(2) of the Act describes the
items and services included in partial hospitalization services.
Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program
furnished by a hospital to its outpatients or by a community mental
health center (CMHC), as a distinct and organized intensive ambulatory
treatment service, offering less than 24-hour-daily care, in a location
other than an individual's home or inpatient or residential setting.
Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this
benefit. 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 with comment period
(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
[[Page 44662]]
74352). In the CY 2013 OPPS/ASC final rule with comment period, we
finalized our proposal to base the relative payment weights that
underpin the OPPS APCs, including the four PHP APCs (APCs 0172, 0173,
0175, and 0176), on geometric mean costs rather than on the median
costs. For a detailed discussion on this policy, we refer readers to
the CY 2013 OPPS/ASC final rule with comment period (77 FR 68406
through 68412).
In the CY 2014 OPPS/ASC proposed rule (78 FR 43621 through 43622)
and CY 2015 OPPS/ASC final rule with comment period (79 FR 66902
through 66908), we continued to apply our established policies to
calculate the four PHP APC per diem payment rates based on geometric
mean per diem costs using the most recent claims data for each provider
type. For a detailed discussion on this policy, we refer readers to the
CY 2014 OPPS/ASC final rule with comment period (78 FR 75047 through
75050). In the CY 2016, we described our extensive analysis of the
claims and cost data and ratesetting methodology, corrected a cost
inversion that occurred in the final rule data with respect to
hospital-based PHP providers and renumbered the PHP APCs. In CY 2017
OPPS/ASC final rule with comment period (81 FR 79687 through 79691), we
continued to apply our established policies to calculate the PHP APC
per diem payment rates based on geometric mean per diem costs and
finalized a policy to combine the Level 1 and Level 2 PHP APCs for
CMHCs and for hospital-based PHPs. We also implemented an eight-percent
outlier cap for CMHCs to mitigate potential outlier billing
vulnerabilities. For a comprehensive description of PHP payment policy,
including a detailed methodology for determining PHP per diem amounts,
we refer readers to the CY 2016 and CY 2017 OPPS/ASC final rules with
comment period (80 FR 70453 through 70455 and 81 FR 79678 through
79680).
In the CYs 2018 and 2019 OPPS/ASC final rules with comment period
(82 FR 59373 through 59381, and 83 FR 58983 through 58998,
respectively), we continued to apply our established policies to
calculate the PHP APC per diem payment rates based on geometric mean
per diem costs, designated a portion of the estimated 1.0 percent
hospital outpatient outlier threshold specifically for CMHCs, and
proposed updates to the PHP allowable HCPCS codes. We finalized these
proposals in the CY 2020 OPPS/ASC final rule with comment period (84 FR
61352).
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 OPPS/ASC final rule with comment period (85 FR 86073
through 86080), we continued our current methodology to utilize cost
floors, as needed. Since the final calculated geometric mean per diem
costs for both CMHCs and hospital-based PHPs were significantly higher
than each proposed cost floor, 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.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63665
through 63666), we explained that we observed a number of changes,
likely as a result of the COVID-19 PHE, in the CY 2020 OPPS claims that
we would have ordinarily used for CY 2022 ratesetting, and this
included changes in the claims for partial hospitalization. We
explained that 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 were not the best overall approximation of
expected PHP services in CY 2022. Therefore, we finalized our proposal
to calculate the PHP per diem costs using the year of claims consistent
with the calculations that would be used for other OPPS services, by
using the CY 2019 claims and the cost reports that were used for CY
2021 final rulemaking to calculate the CY 2022 PHP per diem costs. In
addition, for CY 2022 and subsequent years, we finalized our proposal
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) (86 FR
63666).
B. Proposed PHP APC Update for CY 2023
1. Proposed PHP APC Geometric Mean Per Diem Costs
For CY 2023 only, we propose to calculate the CMHC and hospital-
based PHP geometric mean per diem costs in accordance with our existing
methodology, except that while we propose to use the latest available
CY 2021 claims data, we propose to continue to use the cost data that
was available for the CY 2021 rulemaking, which is the same cost data
used for the CY 2022 rulemaking (86 FR 63665 through 63666). This
proposal is consistent with the overall proposed use of cost data for
the OPPS, which is discussed in section X.D of this proposed rule.
Following this proposed methodology, we propose to use the geometric
mean per diem cost of $131.71 for CMHCs as the basis for developing the
CY 2023 CMHC APC per diem rate, and to use the geometric mean per diem
cost of $264.06 as the basis for developing the CY 2023 hospital-based
APC per diem rate. In addition, as discussed in the following sections,
we propose not to include data from certain nonstandard cost center
lines in the OPPS ratesetting database construction for CY 2023;
however, we are requesting information from the public about these data
for use in future ratesetting. Lastly, in accordance with our
longstanding policy, we propose to continue to use CMHC APC 5853
(Partial Hospitalization (three or More Services Per Day)) and
hospital-based PHP APC 5863 (Partial Hospitalization (three or More
Services Per Day)). These proposals are discussed in more detail in the
following sections.
2. Development of the PHP APC Geometric Mean Per Diem Costs
In preparation for CY 2023, 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
[[Page 44663]]
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 (81 FR 79680 through 79687) and the CY
2022 OPPS/ASC final rule with comment period (86 FR 63665 through
63666). 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. As discussed in section
VIII.B.1.a of the CY 2022 OPPS/ASC final rule with comment period (86
FR 63666 through 63668), the costs for CMHC service days are calculated
using cost report information from HCRIS.
As mentioned earlier in this section of this proposed rule, we
propose a change from our longstanding practice similar to what we
finalized last year in light of the effects of the COVID-19 PHE. We
discuss this proposal and our rationale in greater detail in the
following paragraphs.
First, we considered whether the latest available CY 2021 claims
would be appropriate to use for CY 2023 ratesetting. Ordinarily, the
best available claims data is the data from 2 years prior to the
calendar year that is the subject of rulemaking. For the CY 2023 OPPS/
ASC proposed rule ratesetting, the best available claims data would
typically be the 2021 calendar year outpatient claims data processed
through December 31, 2021. As discussed in the CY 2022 OPPS/ASC final
rule with comment period (86 FR 63665 through 63666), we noted
significant decreases in the number of PHP days for both hospital-based
PHPs and CMHCs. For this proposed rule, we continue to observe a
decrease in the number of hospital-based PHP days in our trimmed CY
2021 claims dataset, which has approximately 18 percent fewer days than
the CY 2020 dataset. Likewise, for CMHCs, we continue to observe this
decrease in our trimmed CY 2021 claims dataset, which has approximately
32 percent fewer CMHC PHP days than the CY 2020 dataset did. Given the
continued effects of COVID-19 observed on the Medicare claims and cost
report data, coupled with the expectation for future variants, we
believe that it is reasonable to assume that there will continue to be
some limited influence of COVID-19 PHE effects on the data we use for
ratesetting.
Despite the continued effects of COVID-19 that we note in the PHP
data, we also note that even though hospital operations do not appear
to have returned to the same levels as 2019, the Medicare outpatient
service volumes appear to be returning to more normal pre-pandemic
levels. As discussed in section X.D of this proposed rule, based on our
review of the CY 2021 outpatient claims available for ratesetting, we
observed that the non-PHP outpatient service volumes are generally
about halfway between those in the CY 2019 (pre-PHE) claims and CY 2020
(beginning of the PHE) claims, however, we recognize that future COVID-
19 variants may have potentially varying effects and we believe it is
reasonable to assume that there will continue to be some effects of
COVID-19 PHE on the outpatient claims that we use for ratesetting. As a
result, we believe that the more recently available CY 2021 claims data
would better represent the volume and mix of claims for the CY 2023
OPPS. Accordingly, we believe it is appropriate to use CY 2021 data for
purposes of CY 2023 OPPS ratesetting. Consistent with the proposal
discussed in section X.D of this proposed rule, we propose to use the
latest available CY 2021 claims for CY 2023 PHP ratesetting.
Next, we reviewed the cost report data from the December 2021 HCRIS
data set, which we would ordinarily have used for this CY 2023 OPPS/ASC
proposed ratesetting. As discussed in greater detail in section X.D of
this proposed rule, we believe cost report data that overlap with CY
2020 are too influenced by the COVID-19 PHE for purposes of calculating
the CY 2023 PHP payment rates. In the case of PHP, we observed a
negative impact of the cost report data from the December 2021 HCRIS
data set on the calculated geometric mean per diem cost for CMHCs.
Specifically, we observed that the CMHC geometric mean per diem costs
calculated using the latest available cost report data from the
December 2021 HCRIS data set would be $127.38, which would be a
decrease from the cost floor of $136.14 used to calculate the CY 2022
CMHC APC 5853 payment rate (86 FR 63668). Therefore, we believe that it
is appropriate to continue to use the same set of cost reports that we
used in developing the CY 2021 OPPS, to mitigate the impact of that
2020-based data. We note that we will continue to review the updated
cost report data as they are available.
Based on the results of this analysis, we propose to use the cost
information from prior to the COVID-19 PHE--in other words, cost
information that was available for the CY 2021 OPPS/ASC rulemaking,
which is the same as that used last year for the CY 2022 OPPS/ASC
rulemaking (86 FR 63665 through 63669). We would specifically use cost
report data from the June 2020 HCRIS data set, which only includes cost
report data through CY 2019.
Therefore, consistent with what we propose to do for other APCs
under the OPPS as discussed in section X.D of this proposed rule, we
propose to use the latest available CY 2021 claims, but use the cost
information from prior to the COVID-19 PHE for calculating the CY 2023
CMHC and hospital-based PHP APC per diem costs.
Additionally, as mentioned above and discussed in greater detail in
section II.A.1.c of this proposed rule, we have identified that we have
historically not included cost report lines for certain nonstandard
cost centers in the OPPS ratesetting database construction when
hospitals have reported these nonstandard cost centers on cost report
lines that do not correspond to the cost center number. We have found
that hospitals are routinely reporting a number of nonstandard cost
centers in this way. One such cost center is cost center 03550, which
is used to report Psychiatric/Psychological Services.\125\ Based on the
program logic to process HCRIS data used for OPPS ratesetting, we
obtain the cost center number based on the line and subscript number on
which the cost center is reported. Our internal analysis of hospital
cost report information found that providers are routinely reporting
this cost center on cost report lines other than 35.50 (that is, line
35 subscript 50), and therefore, this nonstandard cost center and
others reported this way have not been included in the OPPS ratesetting
database construction. Our internal analysis shows that including this
additional data could potentially decrease the geometric mean cost of
APC 5863 (Partial Hospitalizations (3 or more services) for hospital-
based PHPs) by 12 percent.
---------------------------------------------------------------------------
\125\ Chapter 40 of the Provider Reimbursement Manual (PRM),
Part 2, available on the CMS website at https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Paper-Based-Manuals.
---------------------------------------------------------------------------
While we generally view the use of additional cost data as
improving our OPPS ratesetting process, we have historically not
included cost report lines for certain nonstandard cost centers in the
OPPS ratesetting database construction when hospitals have reported
these nonstandard cost centers on cost report lines that do not
[[Page 44664]]
correspond to the cost center number. Additionally, we are concerned
about the significant changes in APC geometric mean costs that our
analysis indicates would occur if we were to include such lines. We
believe it is important to further investigate the accuracy of these
cost report data before including such data in the ratesetting process.
Further, we believe it is appropriate to gather additional information
from the public as well before including them in OPPS ratesetting.
Therefore, consistent with the proposal at II.A.1.c of this proposed
rule for other OPPS services, we propose to not include data from
nonstandard cost centers reported on lines that do not correspond to
the cost center number in our PHP ratesetting for CY 2023. We are
soliciting comment on whether there exist any specific concerns with
regards to the accuracy of the data from these nonstandard cost center
lines that we would need to consider before including them in future
OPPS ratesetting.
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
For this proposed rule, we used HCRIS as the source for the CMHC
cost information as discussed in the CY 2022 OPPS/ASC final rule with
comment period (86 FR 63666) and prepared data consistent with our
policies as described in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70463 through 70465). However, as discussed above, we
propose to use CY 2021 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 2023 CMHC
PHP APC per diem cost.
Prior to calculating the proposed 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 27 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 2023 ratesetting, one CMHC had a geometric
mean cost per day above the trim's upper limit of $466.01, and one CMHC
had a geometric mean cost per day below the trim's lower limit of
$37.29. Therefore, we are excluding data for ratesetting from these two
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 2023 proposed rule ratesetting, no CMHC was missing
wage index data for all of its service days and, therefore, no CMHC was
excluded. We also exclude providers without any days containing 3 or
more units of PHP-allowable services. One provider is excluded from
ratesetting because it had no days containing 3 or more units of PHP-
allowable services. In addition to our trims and data exclusions,
before calculating the PHP APC geometric mean per diem costs, we also
assess CCRs (80 FR 70463). Our longstanding PHP OPPS ratesetting
methodology defaults any CMHC CCR that is not available or any CMHC CCR
greater than one to the statewide hospital CCR associated with the
provider's urban/rural designation and their State location (80 FR
70463). For this proposed rule ratesetting, there was one CMHC with a
CCR greater than one, and four CMHCs with missing CCR information.
Therefore, we are defaulting the CCRs for these five 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 five
CMHCs having either a CCR greater than one or having no CCR. We are
also excluding one CMHC because it had no days containing three or more
services, and two CMHCs for failing the 2 standard
deviation trim resulting in the inclusion of 24 CMHCs. There were 330
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 3,134 CMHC claims in
our CY 2023 proposed 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 the CY 2022 OPPS/ASC final rule with comment period (86
FR 63666), to calculate the CMHC APC geometric mean per diem cost.\126\
The calculated CY 2023 geometric mean per diem cost for all CMHCs for
providing 3 or more services per day (CMHC APC 5853) is $131.71, an
increase from $129.93 calculated last year for CY 2022 ratesetting (86
FR 63667).
---------------------------------------------------------------------------
\126\ 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.
---------------------------------------------------------------------------
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
For this proposed rule, we prepared data consistent with our
policies as described in the CY 2016 OPPS/ASC final rule with comment
period (80 FR 70463 through 70465) for hospital-based PHP providers,
which is similar to that used for CMHCs. However, as discussed above,
we propose to use CY 2021 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
2023 hospital-based PHP APC per diem cost. The CY 2021 PHP claims
included data for 334 hospital-based PHP providers for our calculations
in this CY 2023 OPPS/ASC proposed rule.
Consistent with our policies, as stated in the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70463 through 70465), we prepared
the data by applying trims and data exclusions. We applied a trim on
hospital service days for hospital-based PHP providers with a CCR
greater than 5 at the cost center level. To be clear, the CCR greater
than 5 trim is a service day-level trim in contrast to the CMHC 2 standard deviation trim, which is a provider-level trim. For
this proposed rule ratesetting, no hospital-based PHP providers had a
CCR greater than 5. Therefore, no hospital-based provider was excluded
as
[[Page 44665]]
a result of this trim. In addition, six hospital-based PHPs were
removed for having no days with PHP payment. One hospital-based PHP was
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).\127\
---------------------------------------------------------------------------
\127\ Click on the link labeled ``CY 2023 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 ``2023 NPRM OPPS Claims Accounting (PDF)''.
---------------------------------------------------------------------------
Overall, we removed eight hospital-based PHP providers (6 with no
PHP payment) + (1 with no PHP-allowable HCPCS codes) + (1 provider with
geometric mean costs per day outside the 3 SD limits)],
resulting in 326 (334 total-8 excluded) hospital-based PHP providers in
the data used for calculating ratesetting.
After completing these data preparation steps, we calculated the CY
2023 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).\128\ The calculated CY 2023 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
$264.06, which is an increase from $253.02 calculated last year for CY
2022 ratesetting (86 FR 63668).
---------------------------------------------------------------------------
\128\ 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.
---------------------------------------------------------------------------
The proposed CY 2023 PHP geometric mean per diem costs are shown in
Table 45 and are used to derive the proposed CY 2023 PHP APC per diem
rates for CMHCs and hospital-based PHPs. The proposed CY 2023 PHP APC
per diem rates are included in Addendum A to this proposed rule (which
is available on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html).
[GRAPHIC] [TIFF OMITTED] TP26JY22.124
C. Outpatient Non-PHP Mental Health Services Furnished Remotely to
Partial Hospitalization Patients After the COVID-19 PHE
1. Background
As discussed in the April 30, 2020 interim final rule with comment
entitled ``Additional Policy and Regulatory Revisions in Response to
the COVID-19 Public Health Emergency'' (85 FR 27562 through 27566),
effective as of March 1, 2020 and for the duration of the COVID-19 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 and
provider-based rules 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 that same interim final rule (85 FR
27564), we also stated that although these services can be furnished
remotely, all other PHP requirements are unchanged and still in effect,
including that all services furnished under the PHP still require an
order by a physician, must be supervised by a physician, must be
certified by a physician, and must be furnished in accordance with
coding requirements by a clinical staff member working within his or
her scope of practice. We also stated that in accordance with the
longstanding requirements that are detailed in the Medicare Benefit
Policy Manual, Pub 100-02, chapter 6, section 70.3, documentation in
the medical record of the reason for the visit and the substance of the
visit is required.
We received four comments in response to the April 30, 2020 interim
final rule with comment regarding the interim final policy for PHP. One
commenter, a national nonprofit organization, expressed support for
this flexibility to ensure services are available safely to people with
Medicare. Another commenter, a healthcare services company, encouraged
CMS to ensure that temporary expansion location policies do not
abruptly end at the end of the PHE, and supported a flexible transition
policy to better ensure continuity of care as hospitals and communities
continue
[[Page 44666]]
to fight the spread of COVID-19 and recover from the impacts of the
virus. One national insurance company voiced support for the
flexibilities and noted that a major beneficial component of PHP is the
structured patient engagement, which can be achieved in the absence of
face-to-face interactions. This commenter stated that they believe
these flexibilities are necessary to ensure that PHP beneficiaries
continue to have access to the level of care they require. They further
noted that for PHP patients, requiring face-to-face only interactions
would place both beneficiaries and providers at risk of contracting or
spreading the coronavirus, but forgoing care could put beneficiaries at
risk for relapse and overdose. This commenter also expressed concern
about clerical staff lacking the qualifications to provide the services
described, and request further language to clarify the scope of this
allowance. Another national insurance company expressed support for the
use of live-two-way video interactions via remote technology for the
PHP level of care when the same level of care and clinical value as an
in-person interaction can be achieved during the PHE. However, this
commenter expressed concern about the use of only audio communication
to provide PHP services. The commenter explained that audio-only
delivery of services does not allow for therapeutic groups and ongoing
assessments therefore impeding the ability to achieve the clinical
benefits of the programs, and cautioned that if PHP services are
delivered ineffectively via audio-only communication, the patient risks
relapse and inpatient readmission. We noted in the interim final rule
that due to the intensive nature of PHP we expected PHP services to be
furnished using telecommunications technology involving both audio and
video. However, we recognized that in some cases beneficiaries might
not have access to video communication technology. In order to maintain
beneficiary access to PHP services, only in the case that both audio
and video are not possible could the service be furnished exclusively
with audio (85 FR 27564).
In the CY 2022 OPPS/ASC proposed rule (86 FR 42187), CMS solicited
comments on whether there were changes commenters believed we should
make to account for shifting patterns of practice that rely on
communication technology to provide mental health services to
beneficiaries in their homes. We acknowledged 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, and that we were interested in
information on the role of hospital staff in providing care to
beneficiaries remotely in their homes.
Although we did not solicit comments on extending the use of remote
technology to provide partial hospitalization services to beneficiaries
in their homes after the end of the COVID-19 PHE, we received several
comments in response to the CY 2022 OPPS/ASC proposed rule expressing
support for the flexibilities allowing PHP services to be furnished to
beneficiaries in their homes via telecommunication technology during
the COVID-19 PHE and encouraging CMS to maintain these flexibilities
beyond the PHE or consider making these temporary policies permanent
(86 FR 63750). 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.\129\ In response to these
comments and others that we received pertaining to the comment
solicitation, we noted that we would consider them for future
rulemaking and that CMS would continue to explore how hospital payment
for virtual services could support access to care in underserved and/or
rural areas.
---------------------------------------------------------------------------
\129\ https://www.psychiatrist.com/jcp/covid-19/telehealth-treatment-patients-intensive-acute-care-psychiatric-setting-during-covid-19/.
---------------------------------------------------------------------------
2. Outpatient Non-PHP Mental Health Services Furnished Remotely by
Hospital Staff to Beneficiaries in Their Homes After the COVID-19 PHE
As discussed in section X.A.5 of this proposed rule, we propose
that payment under the OPPS for new HCPCS codes that designate non-PHP
services provided for the purposes of diagnosis, evaluation, or
treatment of a mental health disorder and are furnished to
beneficiaries in their homes by clinical staff of the hospital. While
we are not proposing to recognize these proposed OPPS remote services
as PHP services. We are clarifying here that none of the PHP
regulations would preclude a patient that is under a PHP plan of care
from receiving other reasonable and medically necessary non-PHP
services from a hospital if that proposal is finalized.
Additionally, we are reminding readers that section 1835(a)(2)(F)
of the Act requires that in the absence of partial hospitalization
services, the individual would require inpatient psychiatric care; that
is, partial hospitalization services are in lieu of inpatient
hospitalization. This requirement is codified in the PHP regulations at
Sec. 424.24(e)(1)(i), which requires that the PHP patient
certification state that the individual would require inpatient
psychiatric care if the partial hospitalization services were not
provided. Furthermore, in accordance with Sec. 410.43(c)(7), all PHP
patients should have the cognitive and emotional ability to participate
in the active treatment process and should be able to tolerate the
intensity of the partial hospitalization program.
In addition, we reiterate that the physician certification and plan
of care requirements at Sec. 424.24(e)(1) and (2) require that each
PHP patient must be under an individualized written plan of treatment
that is periodically reviewed by a physician in consultation with
appropriate staff participating in the program. This plan of treatment
must set forth the physician's diagnosis; the type, amount, duration,
and frequency of the services; and the treatment goals under the plan.
As discussed in the CY 2009 OPPS/ASC final rule (73 FR 68695), andSec.
410.43(c), partial hospitalization programs are intended for patients
who require a minimum of 20 hours per week of therapeutic services as
evidenced in a patient's plan of care. We expect that PHP patients are
receiving the amount and type of services identified in the plan of
care for generally all weeks under the program
[[Page 44667]]
stated in the plan of care rather than in the actual hours of
therapeutic services a patient receives.
In accordance with these requirements, if the proposal at Section
X.A.5 is finalized, we expect that a physician would update the
patient's PHP plan of care to appropriately reflect any change to the
type, amount, duration, or frequency of the therapeutic services
planned for that patient in circumstances when a PHP patient receives
non-PHP remote mental health services from a hospital outpatient
department. The medical documentation should continue to support the
patient's eligibility for participation in a PHP.
Lastly, we note that section 1866(e)(2) of the Act includes CMHCs
as a Medicare provider of services, but only with respect to the
furnishing of partial hospitalization services. As noted earlier in
this section, we are not proposing to recognize the proposed OPPS
remote services as PHP services; therefore, CMHCs are not permitted to
bill Medicare for any remote mental health services furnished by
clinical staff of the CMHC in an individual's home. However, a PHP
patient who typically receives PHP services at a CMHC could receive
non-PHP remote mental health services from a hospital outpatient
department if the proposal at section X.A.5 is finalized, or from a
physician or other type of practitioner who is authorized to furnish
and bill for Medicare telehealth services. As discussed in the
following section of this proposed rule, we are requesting information
on the need for remote mental health services by CMHC patients, as well
as potential pathways CMS could consider to address this need within
the current statutory framework.
3. Request for Information Regarding Remote PHP Services Furnished by
Hospital Outpatient Departments and CMHCs During the COVID-19 PHE
We are interested in better understanding the use of remote mental
health services for PHP patients during the COVID-19 PHE and the
potential need for such services in the future among PHP patients who
receive care from CMHCs and HOPDs. Specifically, we are requesting
public comments on the following questions:
How have CMHCs and HOPDs used the flexibilities allowing
the provision of remote PHP services and incorporated remote PHP
services into their operations during the COVID-19 PHE?
What are the needs and circumstances in which remote PHP
services have most often been used? What situations and patient
populations have these flexibilities best served? How have these needs,
circumstances, and patient populations differed between HOPDs and
CMHCs?
What, if any, barriers would there be to access to remote
mental health services for PHP patients of a CMHC? What if any possible
pathways do commenters believe might exist to minimize these barriers,
while taking into consideration section 1861(ff)(3)(A) of the Act?
While we will not be responding to specific comments submitted in
response to this RFI, we intend to use this input to inform future
policy development. Please identify the question you are responding to,
and include as much data as possible that supports your responses. We
look forward to receiving feedback on these topics.
D. Outlier Policy for CMHCs
For 2023, we propose to continue to calculate the CMHC outlier
percentage, cutoff point and percentage payment amount, outlier
reconciliation, outlier payment cap, and fixed dollar- threshold
according to previously established policies. These topics are
discussed in more detail. We refer readers to section II.G.1 of this
proposed rule for our general policies for hospital outpatient outlier
payments.
1. Background
As discussed in the CY 2004 OPPS final rule with comment period (68
FR 63469 through 63470), we noted a significant difference in the
amount of outlier payments made to hospitals and CMHCs for PHP
services. Given the difference in PHP charges between hospitals and
CMHCs, we did not believe it was appropriate to make outlier payments
to CMHCs using the outlier percentage target amount and threshold
established for hospitals. Therefore, beginning in CY 2004, we created
a separate outlier policy specific to the estimated costs and OPPS
payments provided to CMHCs. We designated a portion of the estimated
OPPS outlier threshold specifically for CMHCs, consistent with the
percentage of projected payments to CMHCs under the OPPS each year,
excluding outlier payments, and established a separate outlier
threshold for CMHCs. This separate outlier threshold for CMHCs resulted
in $1.8 million in outlier payments to CMHCs in CY 2004 and $0.5
million in outlier payments to CMHCs in CY 2005 (82 FR 59381). In
contrast, in CY 2003, more than $30 million was paid to CMHCs in
outlier payments (82 FR 59381).
2. CMHC Outlier Percentage
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
through 59268), we described the current outlier policy for hospital
outpatient payments and CMHCs. We note that we also discussed our
outlier policy for CMHCs in more detail in section VIII.C of that same
final rule (82 FR 59381). We set our projected target for all OPPS
aggregate outlier payments at 1.0 percent of the estimated aggregate
total payments under the OPPS (82 FR 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.D.3 of
this proposed rule, to determine the estimated outlier payments for
that provider. CMHC outlier payments are capped at 8 percent of the
provider's estimated total per diem payments (including the
beneficiary's copayment), as described in section VIII.D.5 of this
proposed rule, so any provider's costs
[[Page 44668]]
that exceed the CMHC outlier cap will have its payments adjusted
downward. After accounting for the CMHC outlier cap, we sum all of the
estimated outlier payments to determine the estimated total CMHC
outlier payments.
(Each Provider's Estimated Costs-Each Provider's Estimated Multiplier
Threshold) = A. If A is greater than 0, then (A x 0.50) = Estimated
CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 x
Provider's Total Estimated Per Diem Payments), then cap-adjusted B =
(0.08 x Provider's Total Estimated Per Diem Payments); otherwise, B =
B. Sum (B or cap-adjusted B) for Each Provider = Total CMHC Outlier
Payments.
Step 3: We determine the percentage of all OPPS outlier
payments that CMHCs represent by dividing the estimated CMHC outlier
payments from Step 2 by the total OPPS outlier payments from Step 1:
(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
We propose to continue to calculate the CMHC outlier percentage
according to previously established policies, and we did not propose
any changes to our current methodology for calculating the CMHC outlier
percentage for CY 2023. Therefore, based on our CY 2023 payment
estimates, CMHCs are projected to receive 0.02 percent of total
hospital outpatient payments in CY 2023, 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.
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 2023, we propose to continue
to pay for partial hospitalization services that exceed 3.4 times the
proposed CMHC PHP APC payment rate at 50 percent of the CMHC PHP APC
geometric mean per diem costs over the cutoff point. That is, for CY
2023, if a CMHC's cost for partial hospitalization services paid under
CMHC PHP APC 5853 exceeds 3.4 times the payment rate for CMHC APC 5853,
the outlier payment will be calculated as [0.50 x (CMHC Cost-(3.4 x APC
5853 rate))].
4. Outlier Reconciliation
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594
through 68599), we established an outlier reconciliation policy to
address charging aberrations related to OPPS outlier payments. We
addressed vulnerabilities in the OPPS outlier payment system that lead
to differences between billed charges and charges included in the
overall CCR, which are used to estimate cost and would apply to all
hospitals and CMHCs paid under the OPPS. We initiated steps to ensure
that outlier payments appropriately account for the financial risk when
providing an extraordinarily costly and complex service, but are only
being made for services that legitimately qualify for the additional
payment.
For a comprehensive description of outlier reconciliation, we refer
readers to the CY 2019 OPPS/ASC final rules with comment period (83 FR
58874 through 58875 and 81 FR 79678 through 79680).
We propose to continue these policies for partial hospitalization
services provided through PHPs for CY 2023. 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).
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 2023 OPPS/ASC proposed rule, we do 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
[[Page 44669]]
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), the CY 2021 OPPS/ASC final rule with comment period (85
FR 86083), and the CY 2022 OPPS/ASC final rule with comment period (86
FR 63508). We propose to continue this policy for CY 2023.
IX. Proposed Services That Will Be Paid Only as Inpatient Services
A. Background
Established in rulemaking as part of the initial implementation of
the OPPS, the inpatient only (IPO) list identifies services for which
Medicare will only make payment when the services are furnished in the
inpatient hospital setting because of the invasive 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, for the reasons described
above, 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 that procedure 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 parties, 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. Interested parties are 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).
We traditionally have used five longstanding criteria to determine
whether a procedure should be removed from the IPO list. 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 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 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. The criteria for assessing procedures for removal
from the IPO list are the following:
1. Most outpatient departments are equipped to provide the services
to the Medicare population.
2. The simplest procedure described by the code may be furnished in
most outpatient departments.
3. The procedure is related to codes that we have already removed
from the IPO list.
4. A determination is made that the procedure is being furnished in
numerous hospitals on an outpatient basis.
5. 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 interested parties 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 the OPPS (67 FR 66740). We determine the
APC assignment for services removed from the IPO list by evaluating the
clinical similarity and resource costs of the service compared to other
services paid under the OPPS and review the Medicare Severity Diagnosis
Related Groups (MS-DRG) rate for the service under the IPPS, though we
note we would generally expect the cost to provide a service in the
outpatient setting to be less than the cost to provide the service in
the inpatient setting.
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 the 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). 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
[[Page 44670]]
list to determine whether any services should be removed.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86084
through 86088) we finalized a policy to eliminate the IPO list over the
course of 3 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.
In the CY 2022 OPPS/ASC final rule with comment period, we halted
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 using the above five criteria, we
returned most services removed from the IPO list in CY 2021 back to the
IPO list beginning in CY 2022 (86 FR 63671 through 63736). We also
amended 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 also finalized
our proposal 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 (86 FR 63678).
B. Proposed Changes to the Inpatient Only (IPO) List
Using the five criteria listed above, for CY 2023, we have
identified 10 services described by the following codes that we propose
to remove from the IPO list for CY 2023: CPT code 16036 (Escharotomy;
each additional incision (list separately in addition to code for
primary procedure)); CPT code 22632 (Arthrodesis, posterior interbody
technique, including laminectomy and/or discectomy to prepare
interspace (other than for decompression), single interspace; each
additional interspace (list separately in addition to code for primary
procedure)); CPT code 21141 (Reconstruction midface, lefort i; single
piece, segment movement in any direction (eg, for long face syndrome),
without bone graft); CPT code 21142 (Reconstruction midface, lefort i;
2 pieces, segment movement in any direction, without bone graft); CPT
code 21143 (Reconstruction midface, lefort i; 3 or more pieces, segment
movement in any direction, without bone graft); CPT code 21194
(Reconstruction of mandibular rami, horizontal, vertical, c, or l
osteotomy; with bone graft (includes obtaining graft)); CPT code 21196
(Reconstruction of mandibular rami and/or body, sagittal split; with
internal rigid fixation); CPT code 21347 (Open treatment of
nasomaxillary complex fracture (lefort ii type); requiring multiple
open approaches); CPT code 21366 (Open treatment of complicated (e.g.,
comminuted or involving cranial nerve foramina) fracture(s) of malar
area, including zygomatic arch and malar tripod; with bone grafting
(includes obtaining graft)); and CPT code 21422 (Open treatment of
palatal or maxillary fracture (lefort i type);). The services that we
propose to remove from the IPO list for CY 2023 and subsequent years,
including the CPT codes, long descriptors, and the proposed CY 2023
payment indicators and APC assignments are displayed in Table M1 of
this proposed rule.
As noted above, we propose to remove the service described by CPT
code 16036 from the IPO list for CY 2023. After reviewing the clinical
characteristics of the service described by CPT code 16036, we believe
that this procedure meets criteria 2 and 3 in our regulation text at
Sec. 419.23(b)(2) and (3) because the simplest procedure described by
the code may be performed in most outpatient departments and the
service or procedure is related to codes that CMS has already removed
from the IPO list. CPT code 16036 is an add-on code that is typically
billed with the primary procedure described by CPT code 16035
(Escharotomy; initial incision), which was removed from the IPO list in
CY 2007 OPPS/ASC final rule with comment period (71 FR 68156). For CY
2023, we propose to assign CPT code 16036 to status indicator ``N''. We
are seeking public comment on our conclusion that the service described
by CPT code 16036 meets criteria 2 and 3 as well as our proposal to
assign this service to status indicator ``N'' for CY 2023.
Additionally, we propose to remove the service described by CPT
code 22632 from the IPO list for CY 2023. CPT code 22632 is an add-on
code that is typically billed with the primary procedure described by
CPT code 22630 (Arthrodesis, posterior interbody technique, including
laminectomy and/or discectomy to prepare interspace (other than for
decompression), single interspace; lumbar), which was removed from the
IPO list in CY 2021 (86 FR 63708). CPT code 22632 was previously
removed from the IPO list in CY 2021 as part of the first stage of the
elimination of the IPO list, but was then returned to the list for CY
2022 when the elimination of the IPO list was halted. After further in-
depth clinical review of this procedure, we believe CPT code 22632
meets criteria 2 and 3 in our regulation text at Sec. 419.23(b)(2) and
(3) because the simplest procedure described by the code may be
performed in most outpatient departments and it is related to CPT code
22630, which CMS has already removed from the IPO list. For CY 2023, we
propose to assign CPT code 22632 to status indicator ``N''. We are
seeking public comment on our conclusion that the service described by
CPT code 22632 meets criteria 2 and 3 as well as our proposal to assign
this service to status indicator ``N'' for CY 2023.
As stated above, we also propose to remove the following
maxillofacial procedures from the IPO list: CPT codes 21141, 21142,
21143, 21194, 21196, 21347, 21366, and 21422. These services were
previously removed from the IPO list in CY 2021 as part of the first
phase of the elimination of the IPO list and were added back to the IPO
list when the elimination of the IPO list was halted for CY 2022. After
further in-depth review of the clinical characteristics of these
procedures, the claims data, and additional evidence provided by
interested parties, we believe these services meet criteria 1, 2, and 3
in the regulation text at Sec. 419.23(b)(1), (2), and (3) because most
outpatient departments are equipped to provide the procedures; the
simplest procedures described by the codes may be performed in most
outpatient departments; and the procedures are related to codes that
CMS has already removed from the IPO list and we propose to remove them
from the IPO list. We propose to assign these eight services to APC
5165--Level 5 ENT Procedures and status indictor ``J1''. We are seeking
public comment on our conclusion that the services described by CPT
codes 21141, 21142, 21143, 21194, 21196, 21347, 21366, and 21422 meet
criteria 1, 2, and 3 and our proposal to assign these services to APC
5165--Level 5 ENT Procedures and status indicator ``J1''.
We propose to add eight services that were newly created by the AMA
CPT Editorial Panel for CY 2023 to the IPO list. These services, which
will be effective on January 1, 2023, are described by CPT codes 157X1,
228XX, 49X06, 49X10, 49X11, 49X12, 49X13, and 49X14. After clinical
review of these services, we found that they require a hospital
inpatient admission or stay and we propose to assign these services to
status indicator ``C'' for CY 2023. The CPT codes, long descriptors,
and the proposed CY 2023 payment indicators are displayed in Table 46.
[[Page 44671]]
Table 46 below contains the proposed changes to the IPO list for CY
2023. The complete list of codes describing services that are proposed
to be designated as inpatient only services beginning in CY 2023 is
also included as Addendum E to this proposed rule, which is available
via the internet on the CMS website.
BILLING CODE 4120-01-P
[[Page 44672]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.064
[[Page 44673]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.065
[[Page 44674]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.066
BILLING CODE 4120-01-C
X. Nonrecurring Policy Changes
A. Mental Health Services Furnished Remotely by Hospital Staff to
Beneficiaries in Their Homes
1. Payment for Mental Health Services Furnished as Medicare Telehealth
Services or by Rural Health Clinics and Federally Qualified Health
Centers
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. Section 1834(m)(4)(D) and (E) of the Act
specify the types of health care professionals that can furnish and be
paid for Medicare telehealth services (referred to as distant site
physicians and practitioners). Section 1834(m)(4)(C) also generally
limits the types of settings and geographic locations where a
beneficiary can receive telehealth services (referred to as originating
sites) to medical care settings in rural areas.
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 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 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. We also used waiver authority to allow certain telehealth
services to be furnished via audio-only telecommunications technology
during the PHE.
Division CC, section 123 of the Consolidated Appropriations Act,
2021 (CAA, 2021), modified the circumstances under which payment is
made under the PFS for mental health services furnished via telehealth
technology following the PHE. Specifically, section 123 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. These amendments were
implemented in the CY 2022 PFS final rule (86 FR 65055 through 65059).
In the CY 2022 PFS final rule we also implemented a similar policy for
mental health visits furnished by staff of RHCs and FQHCs (86 FR 65207
through 65211).
2. Hospital Payment for Mental Health Services Furnished Remotely
During the PHE for COVID-19
For services that are not paid under the PFS, there is no statutory
provision similar to section 1834(m) that addresses payment for
services furnished by hospitals or other institutional providers to
beneficiaries who are not physically located in the hospital or
facility. CMS does pay, however, for certain covered OPD services that
do not require the beneficiary's physical presence in the hospital. In
CY 2015, CMS began paying for CPT code 99490 (Chronic care management
services, at least 20 minutes of clinical staff time directed by a
physician or other qualified health care professional, per calendar
month, with the following required elements: multiple (two or more)
chronic
[[Page 44675]]
conditions expected to last at least 12 months, or until the death of
the patient; chronic conditions place the patient at significant risk
of death, acute exacerbation/decompensation, or functional decline;
comprehensive care plan established, implemented, revised, or
monitored), which describes non-face-to-face care management services
furnished by clinical staff under the direction of a physician or other
qualified health professional over the course of a calendar month to a
beneficiary who is not physically in the hospital (see Addendum B at:
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-Items/CMS-1613-FC). In CY 2019, the OPPS began making payment for
certain remote monitoring services, which similarly involve a
beneficiary who is not physically in the hospital but who is using a
monitoring device that transmits data to hospital staff (see Addendum B
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices-
Items/CMS-1695-FC).
In many cases, hospitals provide hospital outpatient mental and
behavioral health services (collectively hereafter, mental health
services) that are furnished by hospital-employed counselors or other
licensed professionals. Examples of these services include
psychoanalysis, psychotherapy, and other counseling services. For some
of these types of professionals (for example, certain mental health
counselors such as marriage and family therapists or licensed
professional counselors), the Medicare statute does not have a benefit
category that would allow them to bill independently for their
services. These services can, in many cases, be covered when furnished
by providers such as hospitals and paid under the OPPS.
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
between the patient and the clinical staff providing the service. We
stated that facility staff can effectively furnish these services using
telecommunications 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 PHE, to be a provider-based department (PBD)
of the hospital, so long as the hospital can ensure the location meets
all the conditions of participation, to the extent they are 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 the beneficiary is 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 referred to this
policy as Hospitals without Walls (HWW). 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.
3. Comment Solicitation in the CY 2022 OPPS/ASC Rule
In the CY 2022 OPPS/ASC proposed rule (86 FR 63748 through 63750)
we sought comment on the extent to which hospitals have been relying on
the HWW policy to bill for mental health services furnished to
beneficiaries in their homes by clinical staff of the hospital. We
stated that, 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 use of that
technology, we were interested in information on the role of hospital
staff in providing care to beneficiaries remotely in their homes.
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. We sought comment on whether, during the PHE,
hospitals have experienced a similar increase 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 communications
technology to provide mental health services to beneficiaries in their
homes.
In response to our comment solicitation, we received approximately
60 comments that were predominantly in support of continuing OPPS
payment for mental health services furnished to beneficiaries in their
homes by clinical staff of the hospital through the use of
communications technology as a permanent policy post-PHE. These
comments stated 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.
4. Current Crisis in Mental Health and Substance Use Disorder
During the COVID-19 pandemic, the number of adults reporting
adverse behavioral health conditions has increased sharply, with higher
rates of depression, substance use, and self-reported suicidal thoughts
observed in racial and ethnic minority groups.\130\ According to CDC
data ``[d]uring August 19, 2020-February 1, 2021, the percentage of
adults with symptoms of an anxiety or a depressive disorder during the
past 7 days increased significantly (from 36.4% to 41.5%), as did the
percentage reporting that they needed but did not receive mental health
counseling or therapy during the past 4 weeks (from 9.2% to
11.7%)''.\131\
---------------------------------------------------------------------------
\130\ https://www.cdc.gov/mmwr/volumes/69/wr/mm6932a1.htm.
\131\ https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
---------------------------------------------------------------------------
[[Page 44676]]
In addition to the mental health crisis exacerbated by the COVID-19
pandemic, the United States is currently in the midst of an ongoing
opioid PHE, which was first declared on October 26, 2017 by former
Acting Secretary Eric D. Hargan, and most recently renewed by Secretary
Xavier Becerra on April 4, 2022, and is facing an overdose crisis as a
result of rising polysubstance use, such as the co-use of opioids and
psychostimulants (for example, methamphetamine, cocaine). Recent CDC
estimates of overdose deaths now exceed 107,000 for the 12-month period
ending in December 2021,\132\ with overdose death rates surging among
Black and Latino Americans.\133\ While overdose deaths were already
increasing in the months preceding the COVID-19 pandemic, the latest
numbers suggest an acceleration of overdose deaths during the pandemic.
Recent increases in overdose deaths have reached historic highs in this
country.\134\ According to information provided to CMS by interested
parties, these spikes in substance use and overdose deaths reflect a
combination of increasingly deadly illicit drug supplies, as well as
treatment disruptions, social isolation, and other hardships imposed by
the COVID-19 pandemic; but they also reflect the longstanding
inadequacy of our healthcare infrastructure when it comes to preventing
and treating substance use disorders (SUD) (for example, alcohol,
cannabis, stimulants and opioid SUDs). Even before the COVID-19
pandemic began, in 2019, more than 21 million Americans aged 12 or over
needed treatment for a SUD in the past year, but only about 4.2 million
of them received any treatment or ancillary services for it.\135\
---------------------------------------------------------------------------
\132\ https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.
\133\ Drake, J., Charles, C., Bourgeois, J.W., Daniel, E.S., &
Kwende, M. (January 2020). Exploring the impact of the opioid
epidemic in Black and Hispanic communities in the United States.
Drug Science, Policy and Law. doi:10.1177/2050324520940428.
\134\ https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.
\135\ Substance Abuse and Mental Health Services Administration.
(2020). Key substance use and mental health indicators in the United
States: Results from the 2019 National Survey on Drug Use and Health
(HHS Publication No. PEP20-07-01-001, NSDUH Series H-55). Rockville,
MD: Center for Behavioral Health Statistics and Quality, Substance
Abuse and Mental Health Services Administration. Retrieved from
https://www.samhsa.gov/data/.
---------------------------------------------------------------------------
According to the Commonwealth Fund, the provision of behavioral
health services via communications technology has a robust evidence
base; and numerous studies have demonstrated its effectiveness across a
range of modalities and mental health diagnoses (for example,
depression, SUD). 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. This flexibility could potentially bring care to
many more patients in need, as well as enhance ease of scheduling,
decrease rate of no shows, increase understanding of family and home
dynamics, and protect patients and practitioners with underlying health
conditions.\136\
---------------------------------------------------------------------------
\136\ https://www.commonwealthfund.org/blog/2020/using-telehealth-meet-mental-health-needsduring-covid-19-crisis.
---------------------------------------------------------------------------
5. CY 2023 OPPS Proposal To Pay for Mental Health Services Furnished
Remotely by Hospital Staff
a. Designation of Mental Health Services Furnished to Beneficiaries in
Their Homes as Covered OPD Services
During the PHE for COVID-19, many beneficiaries may be receiving
mental health services in their homes from a clinical staff member of a
hospital or CAH using communications technology under the flexibilities
we adopted to permit hospitals to furnish these services. After the PHE
ends, absent changes to our regulations, the beneficiary would need to
physically travel to the hospital to continue receiving these
outpatient hospital services from hospital clinical staff. We are
concerned that this could have a negative impact on access to care in
areas where beneficiaries may only be able to access mental health
services provided remotely by hospital staff and, during the PHE, have
become accustomed to receiving these services in their homes. We are
also concerned about potential disruptions to continuity of care in
instances where beneficiaries' inability to continue receiving these
mental health services in their homes would lead to loss of access to a
specific practitioner with whom they have established clinical
relationships. We believe that, given the current mental health crisis,
the consequences of loss of access could potentially be severe. We also
note that beneficiaries' 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 also
believe that, given the changes in payment policy for mental health
services via telehealth by physicians and practitioners under the PFS
and mental health visits furnished by staff of RHCs and FQHCs, using
interactive, real-time telecommunications technology, it is important
to maintain consistent payment policies across settings of care so as
not to create payment incentives to furnish these services in a
specific setting.
Therefore, we propose to designate certain services provided for
the purposes of diagnosis, evaluation, or treatment of a mental health
disorder performed remotely by clinical staff of a hospital using
communications technology to beneficiaries in their homes as hospital
outpatient services that are among the ``covered OPD services''
designated by the Secretary as described in section 1833(t)(1)(B)(i) of
the Act and for which payment is made under the OPPS. To effectuate
payment for these services, we propose to create OPPS-specific coding
to describe these services. The proposed code descriptors specify that
the beneficiary must be in their home and that there is no associated
professional service billed under the PFS. We note that, consistent
with the conditions of participation for hospitals at 42 CFR 482.11(c),
all hospital staff performing these services must be licensed to
furnish these services consistent with all applicable State laws
regarding scope of practice. We also propose that the hospital clinical
staff be physically located in the hospital when furnishing services
remotely using communications technology for purposes of satisfying the
requirements at 42 CFR 410.27(a)(1)(iii) and Sec. 410.27(a)(1)(iv)(A),
which refer to covered therapeutic outpatient hospital services
incident to a physician's or nonphysician practitioner's service as
being ``in'' a hospital outpatient department. We are seeking comment
on whether requiring the hospital clinical staff to be located in the
hospital when furnishing the mental health service remotely to the
beneficiary in their home would be overly burdensome or disruptive to
existing models of care delivery developed during the PHE, and whether
we should revise the regulatory text in the provisions cited above to
remove references to the practitioner being ``in'' the hospital
outpatient department.
[[Page 44677]]
Please see Table 47 for the proposed codes and their descriptors.
[GRAPHIC] [TIFF OMITTED] TP26JY22.067
When beneficiaries are in their homes and not physically within the
hospital, we do not believe that the hospital is accruing all the costs
associated with an in-person service and as such the full OPPS rate may
not accurately reflect these costs. We believe that the costs
associated with hospital clinical staff remotely furnishing a mental
health service to a beneficiary who is in their home using
communications technology more closely resembles the PFS payment amount
for similar services when performed in a facility, which reflects the
time and intensity of the professional work associated with performing
the mental health service but does not reflect certain practice expense
costs, such as clinical labor, equipment, or supplies.
Therefore, we propose to assign HCPCS codes CXX78 and CXX79 to APCs
based on the PFS facility payment rates for CPT codes 96159 (Health
behavior intervention, individual, face-to-face; each additional 15
minutes (List separately in addition to code for primary service)) and
96158 (Health behavior intervention, individual, face-to-face; initial
30 minutes), respectively. We believe that the APC series that is most
clinically appropriate would be the Health and Behavior Services APC
series. For CY 2022, CPT code 96159 has a PFS facility payment rate of
around $20 while CPT code 96158 has a PFS facility payment rate of
around $60. If we use these PFS payment rates to approximate the costs
associated with furnishing CXX78 and CXX79, these codes should be
placed in APC 5821 (Level 1 Health and Behavior Services) and APC 5822
(Level 2 Health and Behavior Services), respectively. As CXX80 is an
add-on code, payment would be packaged; and the code would not be
assigned to an APC. See Table 48 for proposed SI and APC assignments
and payment rates for HCPCS codes CXX78-CXX80.
[GRAPHIC] [TIFF OMITTED] TP26JY22.068
[[Page 44678]]
We are seeking comment on the designation of mental health services
furnished remotely to beneficiaries in their homes as covered OPD
services payable under the OPPS, and on these proposed codes, their
proposed descriptors, the proposed HCPCS codes and PFS facility rates
as proxies for hospital costs, and the proposed APC assignments for the
proposed codes. We recognize that, while mental health services have
been paid under the OPPS when furnished by hospital staff in-person to
beneficiaries physically located in the hospital, the ability to
provide these services remotely via communications technology when the
beneficiary is at home is a new model of care delivery and that we
could benefit from additional information to assist us to appropriately
code and pay for these services. We invite additional information from
commenters on all aspects of this proposal. We will also monitor uptake
of these services for any potential fraud and/or abuse. Finally, we
note this proposal would also allow these services to be billed by
CAHs, even though CAHs are not paid under the OPPS.
b. Periodic In-Person Visits
Section 123(a) of the CAA, 2021 also added a new subparagraph (B)
to section 1834(m)(7) of the Act to prohibit payment for a Medicare
telehealth service furnished in the patient's home for purposes of
diagnosis, evaluation, or treatment of a mental health disorder unless
the physician or practitioner furnishes an item or service in-person,
without the use of telehealth, within six months prior to the first
time the physician or practitioner furnishes a telehealth service to
the beneficiary, and thereafter, at such times as the Secretary
determines appropriate. In the CY 2022 PFS final rule, we finalized
that, after the first mental health telehealth service in the patient's
home, there must be an in-person, non-telehealth service within 12
months of each mental health telehealth service--but also finalized a
policy to allow for limited exceptions to the requirement.
Specifically, if the patient and practitioner agree that the benefits
of an in-person, non-telehealth service within 12 months of the mental
health telehealth service are outweighed by risks and burdens
associated with an in-person service, and the basis for that decision
is documented in the patient's medical record, the in-person visit
requirement will not apply for that 12-month period (86 FR 65059). We
finalized identical in-person visit requirements for mental health
visits furnished through communications technology for RHCs and FQHCs.
In the interest of maintaining similar requirements between mental
health visits furnished by RHCs and FQHCs via communications
technology, mental health telehealth services service under the PFS,
and mental health services furnished remotely under the OPPS, we
propose to require that payment for mental health services furnished
remotely to beneficiaries in their homes using telecommunications
technology may only be made if the beneficiary receives an in-person
service within 6 months prior to the first time the hospital clinical
staff provides the mental health services remotely; and that there must
be an in-person service without the use of telecommunications
technology within 12 months of each mental health service furnished
remotely by the hospital clinical staff. We also propose the same
exceptions policy as was finalized in the CY 2022 PFS final rule,
specifically, that we would permit exceptions to the requirement that
there be an in-person service without the use of communications
technology within 12 months of each remotely furnished mental health
service when the hospital clinical staff member and beneficiary agree
that the risks and burdens of an in-person service outweigh the
benefits of it. Exceptions to the in-person visit requirement should
involve a clear justification documented in the beneficiary's medical
record including the clinician's professional judgement that the
patient is clinically stable and/or that an in-person visit has the
risk of worsening the person's condition, creating undue hardship on
the person or their family, or would otherwise result in disengaging
with care that has been effective in managing the person's illness.
Hospitals must also document that the patient has a regular source of
general medical care and has the ability to obtain any needed point of
care testing, including vital sign monitoring and laboratory studies.
Section 304(a) of Division P, Title III, Subtitle A of the
Consolidated Appropriations Act, 2022 (Pub. L. 117-103, March 15, 2022)
amended section 1834(m)(7)(B)(i) of the Act to delay the requirement
that there be an in-person visit with the physician or practitioner
within 6 months prior to the initial mental health telehealth service,
and at subsequent intervals as determined by the Secretary, until the
152nd day after the emergency period described in section 1135(g)(1)(B)
(the PHE for COVID-19) ends. In addition, Section 304 of the CAA, 2022,
delayed until 152 days after the end of the PHE similar in-person visit
requirements for remotely furnished mental health visits furnished by
RHCs and FQHCs. In the interest of continuity across payment systems so
as to not create incentives to furnish mental health services in a
given setting due to a differential application of additional
requirements, and to avoid any burden associated with immediate
implementation of the proposed in-person visit requirements, we propose
that the in-person visit requirements would not apply until the 152nd
day after the PHE for COVID-19 ends.
c. Audio-Only Communication Technology
Section 1834(m) of the Act outlines the requirements for PFS
payment for Medicare telehealth services that are furnished via a
``telecommunications system,'' and specifies that, only for purposes of
Medicare telehealth services furnished through a Federal telemedicine
demonstration program conducted in Alaska or Hawaii, the term
``telecommunications system'' includes asynchronous, store-and-forward
technologies. We further defined the term, ``telecommunications
system,'' in the regulation at Sec. 410.78(a)(3) to mean an
interactive telecommunications system, which is defined as multimedia
communications equipment that includes, at a minimum, audio and video
equipment permitting two-way, real-time interactive communications
between the patient and distant site physician or practitioner.
During the PHE for COVID-19, we used waiver authority under section
1135(b)(8) of the Act to temporarily waive the requirement, for certain
behavioral health and/or counseling services and for audio-only
evaluation and management (E/M) visits, that telehealth services must
be furnished using an interactive telecommunications system that
includes video communications technology. Therefore, for certain
services furnished during the PHE for COVID-19, we make payment for
these telehealth services when they are furnished using audio-only
communications technology. In the CY 2022 PFS final rule, we stated
that, given the generalized shortage of mental health care
professionals,\137\ and the existence of areas and populations where
there is limited access to broadband due to geographic or socioeconomic
challenges, that we believed beneficiaries may have come to rely upon
the use of audio-only communications technology in order to receive
mental health services, and that a sudden discontinuation of this
[[Page 44679]]
flexibility at the end of the PHE could have a negative impact on
access to care (86 FR 65059). Due to these concerns, we modified the
definition of interactive telecommunications system in Sec.
410.78(a)(3) for services furnished for purposes of diagnosis,
evaluation, or treatment of a mental health disorder to a patient in
their home to include two-way, real-time audio-only communications
technology in instances where the physician or practitioner furnishing
the telehealth service is technically capable to use telecommunications
technology that includes audio and video, but the beneficiary is not
capable of, or did not consent to, use two-way, audio/video technology.
We stated that we believed that this requirement will ensure that
mental health services furnished via telehealth are only conducted
using audio-only communications technology in instances where the use
of audio-only technology is facilitating access to care that would be
unlikely to occur otherwise, given the patient's technological
limitations, abilities, or preferences (86 FR 65062). We also made a
conforming change for purposes of furnishing mental health visits
through telecommunications technology for RHCs and FQHCs. We limited
payment for audio-only services to services furnished by physicians or
practitioners who have the capacity to furnish two-way, audio/video
telehealth services but are providing the mental health services via
audio-only communications technology in instances where the beneficiary
is not capable of, or does not wish to use, two-way, audio/video
technology.
---------------------------------------------------------------------------
\137\ https://bhw.hrsa.gov/data-research/review-health-workforceresearch.
---------------------------------------------------------------------------
In order to maximize accessibility for mental health services,
particularly for beneficiaries in areas with limited access to
broadband infrastructure, and in the interest of policy continuity
across payment systems so as to not create incentives to furnish mental
health services in a given setting due to a differential application of
additional requirements, we propose a similar policy for mental health
services furnished remotely by hospital clinical staff to beneficiaries
in their homes through communications technology. Specifically, we
propose that hospital clinical staff must have the capability to
furnish two-way, audio/video services but may use audio-only
communications technology given an individual patient's technological
limitations, abilities, or preferences.
B. Comment Solicitation on Intensive Outpatient Mental Health
Treatment, Including Substance Use Disorder (SUD) Treatment Furnished
by Intensive Outpatient Programs (IOPs)
There are a range of services described by existing coding under
the PFS and OPPS that can be billed for treatment of mental health
conditions, including SUD, such as individual, group, and family
psychotherapy. Over the past several years, in collaboration with
interested parties and the public, we have provided additional coding
and payment mechanisms for mental health care services paid under the
PFS and OPPS. For example, in the CY 2020 PFS final rule (84 FR 62673),
we finalized the creation of new coding and payment describing a
bundled episode of care for the treatment of Opioid Use Disorder (OUD)
(HCPCS codes G2086-G2088). In the CY 2021 PFS final rule, we finalized
expanding the bundled payments described by HCPCS codes G2086-G2088 to
be inclusive of all SUDs (85 FR 84642 through 84643). These services
are also paid under the OPPS.
Additionally, in the CY 2020 PFS final rule (84 FR 62630 through
62677), we implemented coverage requirements and established new codes
describing bundled payments for episodes of care for the treatment of
OUD furnished by Opioid Treatment Programs (OTPs). Medicare also covers
services furnished by inpatient psychiatric facilities and partial
hospitalization programs (PHP). PHP services can be furnished by a
hospital outpatient department or a Medicare-certified Community Mental
Health Center (CMHC). PHPs are structured to provide intensive
psychiatric care through active treatment that utilizes a combination
of the clinically recognized items and services described in Sec.
1861(ff) of the Social Security Act (the Act). According to the
Medicare Benefit Policy Manual, Chapter 6, Section 70.3, the treatment
program of a PHP closely resembles that of a highly structured, short-
term hospital inpatient program and is at a level more intense than
outpatient day treatment or psychosocial rehabilitation. PHPs work best
as part of a community continuum of mental health services, which range
from the most restrictive inpatient hospital setting to less
restrictive outpatient care and support.
We understand that, in some cases, people who do not require a
level of care for mental health needs that meets the standards for PHP
services nonetheless require intensive services on an outpatient basis.
For example, according to SAMHSA's Advisory on Clinical Issues in
Intensive Outpatient Treatment for Substance Use Disorders, IOP
programs for substance use disorders (SUDs) offer services to clients
seeking primary treatment; step-down care from inpatient, residential,
and withdrawal management settings; or step-up treatment from
individual or group outpatient treatment. IOP treatment includes a
prearranged schedule of core services (e.g., individual counseling,
group therapy, family psychoeducation, and case management) for a
minimum of nine hours per week for adults or six hours per week for
adolescents. SAMSHA further states that the 2019 National Survey of
Substance Abuse Treatment Services reports that 46 percent of SUD
treatment facilities offer IOP treatment.\138\
---------------------------------------------------------------------------
\138\ https://store.samhsa.gov/sites/default/files/SAMHSA_Digital_Download/pep20-02-01-021.pdf.
---------------------------------------------------------------------------
We are seeking comment on whether these services are described by
existing CPT codes paid under the OPPS, or whether there are any gaps
in coding that may be limiting access to needed levels of care for
treatment of mental health disorders or SUDs, for Medicare
beneficiaries. We are also interested in additional, detailed
information about IOP services, such as the settings of care in which
these programs typically furnish services, the range of services
typically offered, the range of practitioner types that typically
furnish those services, and any other relevant information, especially
to the extent it would inform our ability to ensure that Medicare
beneficiaries have access to this care.
C. Direct Supervision of Certain Cardiac and Pulmonary Rehabilitation
Services 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
(PR), cardiac rehabilitation (CR), and intensive cardiac rehabilitation
(ICR) 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 health care provider.
Specifically, the required direct physician supervision can be provided
[[Page 44680]]
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 later of
the end of the calendar year in which the PHE as defined in Sec.
400.200 ends or December 31, 2021 (85 FR 86113 and 86299). In the CY
2021 OPPS/ASC final rule with comment period we also clarified that
this flexibility excluded the presence of the supervising practitioner
via audio-only telecommunications technology (85 FR 86113).
In the CY 2022 PFS final rule, CMS added CPT codes 93797 (Physician
or other qualified health care professional services for outpatient
cardiac rehabilitation; without continuous ECG monitoring (per
session)) and 93798 (Physician or other qualified health care
professional services for outpatient cardiac rehabilitation; with
continuous ECG monitoring (per session)) and HCPCS codes G0422
(Intensive cardiac rehabilitation; with or without continuous ecg
monitoring with exercise, per session) and G0423 (Intensive cardiac
rehabilitation; with or without continuous ecg monitoring; without
exercise, per session) to the Medicare Telehealth Services List on a
Category 3 basis (86 FR 65055). These services will not be able to be
furnished as Medicare telehealth services to beneficiaries in their
homes after the PHE ends because of the statutory restrictions at
section 1834(m)(4)(C)(ii) of the Act on eligible originating sites.
However, the inclusion of these codes on the Medicare Telehealth
Services List will enable payment for these services when furnished in
full using two-way, audio/video communications technology when the
beneficiary is in a medical setting that can serve as a telehealth
originating site and meet the geographic requirements specified in
section 1834(m)(4)(C). These services will remain on the Medicare
Telehealth Services List through the end of CY 2023.
In order to effectuate a similar policy under the OPPS, where PR,
CR and ICR rehabilitation services currently may be furnished during
the PHE to beneficiaries in hospitals under direct supervision of a
physician where the supervising practitioner is immediately available
to be present via two-way, audio/video communications technology, we
are seeking comment on whether we should continue to allow direct
physician supervision for these services to include presence of the
supervising practitioner physician via two-way, audio/video
communication technology through the end of CY 2023. We also are
seeking comment on whether there are safety and/or quality of care
concerns regarding adopting this policy beyond the PHE and what
policies CMS could adopt to address those concerns if the policy were
extended post-PHE.
D. Use of Claims Data for CY 2023 OPPS and ASC Payment System
Ratesetting Due to the PHE
As described in section I.A of this proposed rule, 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.
When updating the OPPS payment rates and system for each rulemaking
cycle, we primarily use two sources of information: the outpatient
Medicare claims data and Healthcare Cost Report Information System
(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 to accurately estimate the costs associated with furnishing
outpatient services and set appropriate payment rates. Ordinarily, the
best available claims data are the data from 2 years prior to the
calendar year that is the subject of rulemaking. For the CY 2023 OPPS/
ASC proposed rule ratesetting, the best available claims data would
typically be the CY 2021 calendar year outpatient claims data processed
through December 31, 2021. 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. The
best available cost report data used in developing the OPPS relative
weights would ordinarily be from cost reports beginning three fiscal
years prior to the year that is the subject of the rulemaking. For
example, under ordinary circumstances, for CY 2023 OPPS ratesetting,
that would be cost report data from HCRIS extracted in December 2021,
which would contain many cost reports ending in FY 2020 and 2021 based
on each hospital's cost reporting period.
As discussed in the CY 2022 OPPS final rule with comment period,
the standard hospital data we would have otherwise used for purposes of
CY 2022 ratesetting included significant effects from the COVID-19 PHE,
which led to a number of concerns with using this data for CY 2022
ratesetting (86 FR 63751 through 63754). In section X.E. of the CY 2022
OPPS/ASC proposed rule (86 FR 42188 through 42190), we noted a number
of changes in the CY 2020 OPPS claims data we would ordinarily use for
ratesetting, likely as a result of the PHE. These changes included
overall aggregate decreases in claims volume (particularly those
associated with visits); significant increases in HCPCS code Q3014
(Telehealth originating site facility fee) in the hospital outpatient
claims; and increases in certain PHE-related services, such as HCPCS
code C9803, which describes COVID-19 specimen collection and services
assigned to APC 5801 (Ventilation Initiation and Management). As a
result of the effects we observed from COVID-19 PHE-related factors in
our claims and cost report data, as well as the increasing number of
Medicare beneficiaries vaccinated against COVID-19, which we believed
might make the CY 2022 outpatient experience closer to CY 2019 rather
than CY 2020, 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.
Therefore, in the CY 2022 OPPS/ASC final rule with comment period, we
established a policy of using CY 2019 claims data and cost reports
prior to the PHE in ratesetting for the CY 2022 OPPS with certain
limited exceptions, such as where CY 2019 data were not available (86
FR 63753 through 63754).
Given the effects the virus that causes COVID-19 has had on
Medicare claims and cost report data the last 2 years, coupled with the
expectation for future variants, we believe that it is reasonable to
assume that there will continue to be some limited influence of COVID-
19 PHE effects on the data we use for ratesetting. We reviewed the CY
2021 claims data available for CY 2023 OPPS ratesetting, similar to the
review we conducted for CY 2022 OPPS ratesetting, to determine the
degree to which the effects of the COVID-19 PHE
[[Page 44681]]
had continued or subsided in our claims data as well as what claims and
cost report data would be appropriate for CY 2023 OPPS ratesetting. In
general, we continue to see limited effects of the PHE, with service
volumes generally about halfway between those in the CY 2019 (pre-PHE)
claims and CY 2020 (beginning of the PHE) claims. At the aggregate
level, there continues to be a decrease in the overall volume of
outpatient hospital claims during the PHE, with approximately 10
percent fewer claims usable for ratesetting purposes when compared to
the CY 2019 outpatient claims volume. This number compares to the 20
percent reduction that we observed last year in the CY 2020 claims.
Similarly, this moderate return to more normal volumes extends across
claims volume and applies to a majority of the clinical APCs in the
OPPS, suggesting that, while clinical and billing patterns have not
quite returned to their pre-PHE levels, they are beginning to do so.
Similar to what we observed in CY 2022 OPPS ratesetting, we
continue to see 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 20 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 during the first year of the PHE, with approximately
35,000 services billed in the CY 2019 OPPS claims and 2.1 million
services billed in the CY 2020 OPPS claims. However, in the CY 2021
OPPS claims currently available for ratesetting, we see a slight
decline in volume to about 1.6 million services, noting that we would
expect slightly more claims in the final rule data. Our view is that a
large part of the volume increase in CY 2020 was the result of site of
service changes due to the PHE.
In other cases, we saw claims data changes associated with specific
services that were furnished more frequently during the PHE. For
example, we identified two notable changes in the claims data for APC
5731 (Level 1 Minor Procedures) and APC 5801 (Ventilation Initiation
and Management). In the CY 2020 claims data reviewed last year, we
noted a significant increase in the services provided under APC 5801,
from 10,340 units provided in CY 2019 claims to 12,802 units in the CY
2020 claims. However, in the CY 2021 claims available for NPRM
ratesetting, there are only approximately 8,596 units of service
provided through this APC, an amount even lower than the service volume
we observed in CY 2019 claims.
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 2021 claims data available for
ratesetting for this proposed rule, there are approximately 1,367,531
single claims available for ratesetting purposes for HCPCS code C9803,
which, if this code were included in ratesetting, would make up 93
percent of the claims used to set the payment rate for APC 5731 (Leve1
1 Minor Procedures APC). Under current policy, HCPCS code C9803 is a
temporary code that was created to support increased testing solely
during the COVID-19 PHE. Given that this is a temporary code only in
use for the duration of the PHE, that the PHE could conclude before CY
2023, and that the large volume of services for this code in the CY
2021 claims data would dictate the payment rate for APC 5731 if we
included this code in ratesetting, we do not believe including the
claims data for this code in establishing CY 2023 payment rates would
be appropriate. Our CY 2022 final policies on data used in ratesetting
were established due to our expectation that the CY 2022 outpatient
experience would be more similar to the CY 2019 claims rather than CY
2020 claims. Our proposed rule review of the data for CY 2023 OPPS
ratesetting also is based on our belief of how well the claims and cost
report data may relate to the CY 2023 outpatient experience. It is with
similar considerations in mind and our belief that the volumes and
costs associated with HCPCS code C9803 will not be reflective of the CY
2023 outpatient experience that we believe it is appropriate to exclude
claims that would typically be used to model the cost of HCPCS code
C9803 from ratesetting.
Based on our review of the CY 2021 outpatient claims available for
ratesetting, we observed that many of the outpatient service volumes
have partially returned to their pre-PHE levels. While the effects of
the COVID-19 PHE remain at both the aggregate and service levels for
certain services, as discussed earlier in this section and in section
I.F of the FY 2023 IPPS proposed rule (87 FR 28123 through 28125), we
recognize that future COVID-19 variants may have potentially varying
effects. Therefore, we believe it is reasonable to assume that there
will continue to be some effects of the COVID-19 PHE on the outpatient
claims that we use for OPPS ratesetting, similar to the CY 2021 claims
data. As a result, we propose to use the CY 2021 claims for CY 2023
OPPS ratesetting.
We propose to use cost report data for this proposed rule from the
same set of cost reports we originally used in the CY 2021 OPPS/ASC
final rule for ratesetting, which in most cases included cost reporting
periods beginning in CY 2018. 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 previously discussed, 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. Under our
historical process of updating cost report data, for the CY 2023 OPPS,
the majority of the cost reports in our data would have cost reporting
periods that overlap parts of CY 2020. Noting that we observed
significant impact at the service level when incorporating these cost
reports into ratesetting and the effects on billing/clinical patterns,
similar to what we observed in the CY 2020 claims when reviewing them
for the CY 2022 OPPS/ASC rulemaking cycle, we believe that it is
appropriate to continue to use the same set of cost reports that we
used in developing the CY 2021 OPPS, so as to mitigate the impact of
that 2020-based data. We note that we will continue to review the
updated cost report data as they are available.
We also note that, similar to the proposed IPPS outlier policy
described in section II.A.4 of the addendum to the FY 2023 IPPS
proposed rule (87 FR 28868), we propose to return to our historical
process of using CCRs when determining the fixed-dollar amount
threshold, and to adopt the charge and CCR inflation factors developed
for the FY 2023 IPPS. For more detail regarding the proposed CY 2023
OPPS outlier policy, see section II.G of this proposed rule.
As a result of our expectation that the CY 2021 claims that we
would typically use will be appropriate for establishing the CY 2023
OPPS, we propose to use the CY 2021 claims for the CY 2023
[[Page 44682]]
OPPS/ASC ratesetting process. However, we propose to use the same set
of cost reports from the June 2020 cost report extract, which contains
only pre-PHE data, to remove the effect of the PHE cost report data on
estimated service cost. In addition, we propose to exclude from
ratesetting claims that would be used to model the estimated cost of
HCPCS code C9803 in this proposed rule.
We are also considering the alternative of continuing with our
standard process of using the most updated claims and cost report data
available. While the CY 2021 claims used in ratesetting would be the
same as under our proposal, under this alternative our cost reports
would also be updated for the most recent extract we typically would
use: cost report data extracted from HCRIS in December 2021, which in
most cases included cost reporting periods beginning in CY 2018. To
facilitate comment on the alternative proposal for CY 2023, we are
making available the cost statistics and addenda utilizing the CY 2021
claims and updated cost report data we would ordinarily have provided
in conjunction with the CY 2023 OPPS/ASC proposed rule. We have
provided all relevant files that would have changes calculated under
this alternative approach including: the OPPS Impact File, cost
statistics files, and addenda. The files specific to this alternative
configuration will be identified by the word ``Alternative'' in the
filenames, similar to our approach in the CY 2022 OPPS/ASC proposed and
final rules. We note that the primary change as a result of the
alternative proposed methodology would be in the scaled weights, which
are displayed in the addenda. We refer the reader to the CMS website
for the CY 2023 OPPS/ASC proposed rule for more information on where
these supplemental files may be found.
E. Supervision by Nonphysician Practitioners of Hospital and CAH
Diagnostic Services Furnished to Outpatients
1. Background
The regulation at 42 CFR 410.32 provides the conditions of Medicare
Part B payment for diagnostic tests. Section 410.32(b) provides the
supervision requirements for diagnostic x-ray tests, diagnostic
laboratory tests, and other diagnostic tests paid under the PFS. Prior
to 2020, the regulation allowed only physicians as defined under
Medicare law to supervise the performance of these diagnostic tests.
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,
27555 through 27556, 27620), we revised Sec. 410.32(b)(1) to allow,
for the duration of the PHE, certain nonphysician practitioners (nurse
practitioners, physician assistants, clinical nurse specialists and
certified nurse midwifes) to supervise the performance of diagnostic
tests to the extent they were authorized to do so under their scope of
practice and applicable State law.
In the CY 2021 PFS final rule (85 FR 84590 through 84492, 85026),
we further revised Sec. 410.32(b)(1) to make the revisions made by the
May 8th COVID-19 IFC permanent and to add certified registered nurse
anesthetists to the list of nonphysician practitioners permitted to
provide supervision of diagnostic tests to the extent authorized to do
so under their scope of practice and applicable State law.
As we explained in those final rules, the basis for making these
revisions was to both ensure that an adequate number of health care
professionals were available to support critical COVID-19-related and
other diagnostic testing needs and provide needed medical care during
the PHE and to implement policy consistent with section 5(a) of the
President's Executive Order 13890 on ``Protecting and Improving
Medicare for Our Nation's Seniors'' (84 FR 53573, October 8, 2019, E.O.
13890), which directed the Secretary to identify and modify Medicare
regulations that contained more restrictive supervision requirements
than existing scope of practice laws, or that limited healthcare
professionals from practicing at the top of their license. We refer
readers to the May 8th COVID-19 IFC (85 FR 27555 through 27556, 27620)
and CY 2021 PFS final rule (85 FR 84590 through 84492, 85026) for a
more detailed discussion of the reasoning behind our revisions to Sec.
410.32.
Section 410.32(b)(1), titled ``Basic rule,'' states that ``. . .all
diagnostic x-ray and other diagnostic tests covered under section
1861(s)(3) of the Act and payable under the physician fee schedule must
be furnished under the appropriate level of supervision by a physician
as defined in section 1861(r) of the Act or, to the extent that they
are authorized to do so under their scope of practice and applicable
State law, by a nurse practitioner, clinical nurse specialist,
physician assistant, certified registered nurse anesthetist, or a
certified nurse-midwife.'' Section 410.32(b)(2) provides a list of
services that are excepted from the basic rule in Sec. 410.32(b)(1).
Section 410.32(b)(3) defines the levels of supervision referenced in
Sec. 410.32(b)(1): general supervision (Sec. 410.32(b)(3)(i)); direct
supervision (Sec. 410.32(b)(3)(ii)); and personal supervision (Sec.
410.32(b)(3)(iii)). Within these three definitions, only the definition
for direct supervision indicates that a ``supervising practitioner''
other than a physician can provide the required supervision. The
definitions for general and personal supervision continue to refer only
to a physician providing the required level of supervision. Although
the definitions of general and personal supervision do not specify that
a ``supervising practitioner'' could furnish these levels of
supervision, the above-described revisions to the ``basic rule''
governing supervision of diagnostic tests at Sec. 410.32(b)(1) allow
certain nonphysician practitioners to provide general and personal
supervision to the extent they are authorized to do so under their
scope of practice and applicable State law.
Section 410.28 provides conditions of payment for diagnostic
services under Medicare Part B provided to outpatients by, or under
arrangements by, hospitals and CAHs, including specific supervision
requirements under Sec. 410.28(e) for diagnostic tests in those
settings. Section 410.28(e) relies upon the definitions of general,
direct (for nonhospital locations) and personal supervision at Sec.
410.32(b)(3)(i) through (iii) by cross-referencing those definitions.
As noted above, the term ``supervising practitioner'' is absent from
those definitions, although the ``basic rule'' at Sec. 410.32(b)(1)
allows certain nonphysician practitioners to provide general and
personal supervision to the extent they are authorized to do so under
their scope of practice and applicable State law. However, Sec.
410.32(b) is explicitly limited to ``all diagnostic x-ray and other
diagnostic tests covered under section 1861(s)(3) of the Act and
payable under the physician fee schedule,'' and Sec. 410.28(e) does
not contain any such ``basic rule'' to clarify that nonphysician
practitioners can provide general and personal supervision.
2. Proposed Revisions to 42 CFR 410.28 and Sec. 410.27
For purposes of clarity and consistency, we propose to revise Sec.
410.28(e) to clarify that the same nonphysician practitioners that can
provide general and personal
[[Page 44683]]
supervision of diagnostic testing services payable under the PFS under
Sec. 410.32(b) can provide supervision of diagnostic testing services
furnished to outpatients by hospitals or CAHs. Specifically, we propose
to revise our existing supervision requirements at Sec. 410.28(e) to
clarify that nurse practitioners, clinical nurse specialists, physician
assistants, certified registered nurse anesthetists and certified nurse
midwives may provide general, direct, and personal supervision of
outpatient diagnostic services to the extent that they are authorized
to do so under their scope of practice and applicable State law.
We also propose to replace the cross-references at Sec. 410.28(e)
to the definitions of general, direct (for outpatient services provided
at a nonhospital location), and personal supervision at Sec.
410.32(b)(3)(i) through (iii) with the text of those definitions as
newly designated paragraphs (1), (2)(i), (2)(ii), (2)(iii), and (3) so
that they are now contained within Sec. 410.28.
Similarly, since Sec. 410.27, which provides the supervision
requirements for therapeutic outpatient hospital and CAH services, also
relies on the definitions of general and personal supervision at Sec.
410.32(b)(3)(i) and (iii), we propose to replace the cross-references
at Sec. 410.27(a)(1)(iv)(A) and (B) with the text of those definitions
so that they are now contained within Sec. 410.27. Additionally, for
clarity we propose to designate the existing definition of direct
supervision and the proposed definition of personal supervision at
Sec. 410.27(a)(1)(iv)(B) as Sec. 410.27(a)(1)(iv)(B)(1) and (2),
respectively. Finally, since Sec. 410.27(a)(1)(iv)(B) and (D) contain
duplicate definitions for direct supervision, we propose to remove
Sec. 410.27(a)(1)(iv)(D) in its entirety and add its language
regarding pulmonary rehabilitation, cardiac rehabilitation, and
intensive cardiac rehabilitation services and the virtual presence of a
physician through audio/video real-time communications technology
during the PHE to the newly designated Sec. 410.27(a)(1)(iv)(B)(1).
F. Coding and Payment for Category B Investigational Device Exemption
Clinical Devices and Studies
1. Medicare Coverage of Items and Services in FDA-Approved
Investigational Device Exemption Clinical Studies
Section 1862(m) of the Act (as added by section 731(b) of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA) (Pub. L. 108-173, enacted on December 8, 2003) allows for
Medicare payment of the routine costs of care furnished to Medicare
beneficiaries in a Category A investigational device exemption (IDE)
study. Under the general rulemaking authority under section 1871 of the
Act, CMS finalized changes to the IDE regulations (42 CFR 405 Subpart
B), effective January 1, 2015 (78 FR 74809). CMS added criteria for
coverage of IDE studies and changed from local Medicare Administrative
Contractor (MAC) review and approval of IDE studies to a centralized
review and approval of IDE studies.
2. Background on Medicare Payment for FDA-Approved IDE Studies
Medicare may make payment for routine care items and services
furnished in an FDA-approved Category A (Experimental) study if CMS
determines that the Medicare coverage IDE study criteria in 42 CFR
405.212 are met. However, Medicare does not make payment for the
Category A device, which is excluded from coverage by 1862(a) of the
Act. A Category A (Experimental) device refers to a device for which
``absolute risk'' of the device type has not been established (that is,
initial questions of safety and effectiveness have not been resolved)
and the FDA is unsure whether the device type can be safe and
effective.
As described in Sec. 405.211(b), with regard to a Category B
(Nonexperimental/investigational) IDE study, Medicare may make payment
for the Category B device and the routine care items and services in
the study if CMS determines that the Medicare coverage IDE study
criteria in Sec. 405.212 are met. A Category B (Non-experimental/
investigational) device refers to a device for which the incremental
risk is the primary risk in question (that is, initial questions of
safety and effectiveness of that device type have been resolved), or it
is known that the device type can be safe and effective because, for
example, other manufacturers have obtained FDA premarket approval or
clearance for that device type (Sec. 405.201(b)).
3. Proposal for Coding and Payment for Category B IDE Devices and
Studies
In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61223
through 61224), we created a temporary HCPCS code to describe the V-
Wave Interatrial Shunt Procedure, including the cost of the device, for
the experimental group and the control group of the study after hearing
concerns from interested parties that current coding for the V-Wave
procedure would compromise the scientific validity of the study.
Specifically, for that randomized, double-blinded control Category B
IDE study, all participants received 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
received the V-Wave interatrial shunt procedure while participants
assigned to the control group only received right heart
catheterization. We stated that 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 Category B IDE
device--the interatrial shunt--because an additional procedure code
would be included on the claims for participants receiving the
interatrial shunt. Therefore, we created a temporary HCPCS code to
describe the V-Wave interatrial shunt procedure for both the
experimental group and the control group in the study. Specifically, we
established HCPCS code C9758 (Blinded procedure for NYHA class III/IV
heart failure; transcatheter implantation of interatrial shunt or
placebo control, including right heart catheterization, trans-
esophageal echocardiography (TEE)/intracardiac echocardiography (ICE),
and all imaging with or without guidance (for example, ultrasound,
fluoroscopy), performed in an approved IDE study) to describe the
service, including the cost of the device, and we assigned the service
to New Technology APC 1589 (New Technology--Level 38 ($10,001-
$15,000)).
In addition to the previously described procedure and the creation
of HCPCS code C9758, CMS has created similar codes and used similar
payment methodologies for other similar IDE studies. For example, the
following HCPCS codes were also created and described blinded
procedures, including the cost of the device, in which both the active
treatment and placebo groups are described by the same HCPCS code:
HCPCS code C9782 (Blinded procedure for New York Heart Association
(NYHA) Class II or III heart failure, or Canadian Cardiovascular
Society (CCS) Class III or IV chronic refractory angina; transcatheter
intramyocardial transplantation of autologous bone marrow cells (e.g.,
mononuclear) or placebo control, autologous bone marrow harvesting and
preparation for transplantation, left heart catheterization including
[[Page 44684]]
ventriculography, all laboratory services, and all imaging with or
without guidance (e.g., transthoracic echocardiography, ultrasound,
fluoroscopy), all device(s), performed in an approved Investigational
Device Exemption (IDE) study), and HCPCS code C9783 (Blinded procedure
for transcatheter implantation of coronary sinus reduction device or
placebo control, including vascular access and closure, right heart
catherization, venous and coronary sinus angiography, imaging guidance
and supervision and interpretation when performed in an approved
Investigational Device Exemption (IDE) study).
For CY 2023, we propose to make a single blended payment, and
establish a new HCPCS code or revise an existing HCPCS code for devices
and services in Category B IDE studies when the Medicare coverage IDE
study criteria at Sec. 405.212 are met and where CMS determines, that
a new or revised code and/or payment rate is necessary to preserve the
scientific validity of such a study. We intend that this proposal would
preserve the scientific validity of these studies by avoiding
differences in Medicare payment methods that would otherwise reveal the
group (treatment or control) to which a patient has been assigned. For
example, it is expected that in a typical study, those receiving the
placebo may have a lesser Medicare payment due to absence of the
Category B device, and therefore, the payment amount may unblind the
study and compromise its scientific validity. As has occurred
previously, we anticipate interested parties will engage with us and
notify us, for instance, if they have concerns that an existing HCPCS
code may compromise the scientific validity of a Category B IDE study.
Therefore, we propose to create a new HCPCS code or revise an
existing HCPCS code to describe a Category B IDE device and study,
which would include both the treatment and control arms and related
device(s), as well as routine care items and services as specified
under Sec. 405.201, if we determine it is necessary to do so to
preserve the scientific validity of the study; we would assign the new
or revised code a blended payment rate. We would do this where the
coding would compromise the scientific validity of the study. The
single blended payment rate would be dependent on the specific trial
protocol and would account for the frequency with which the
investigational device is used compared to placebo. For example, in a
study, for which CMS determines the Medicare coverage IDE study
criteria in Sec. 405.212 are met and where there is a 1:1 assignment
of the device to placebo (no device), Medicare's payment rate would
prospectively average the payment for the device with the zero payment
for the placebo in a 1:1 ratio. Furthermore, costs for routine care
items and services, as specified under Sec. 405.201 in the study would
be included in the single blended payment.
Section 1833(t)(9)(A) of the Act requires the Secretary to review
not less often than annually and revise the groups, the relative
payment weights, and the wage and other adjustments to take into
account changes in medical practice, changes in technology, the
addition of new services, new cost data, and other information and
factors. Consistent with this requirement, we propose this policy to
ensure we pay appropriately under the OPPS for Category B IDE devices
and studies in a manner that preserves the studies' scientific
validity. This proposal is similar to our standard practice of setting
payment rates based on the frequency of resources used. Our proposal to
create new HCPCS codes or revise existing HCPCS codes to operationalize
our proposal to make a single payment for the blended cost of the
device depending on the frequency with which it is used in the study,
together with the study costs, is consistent with our historical
practice of creating new codes for OPPS and ASC programmatic needs. We
note that, in addition to our general authority to review and revise
the APC groups and the relative payment weights in section
1833(t)(9)(A) of the Act, section 1833(w) of the Act is additional
authority that would support our proposal. In particular, section
1833(w) of the Act authorizes the Secretary to develop alternative
methods of payment for items and services provided under clinical
trials and comparative effectiveness studies sponsored or supported by
an agency of the Department of Health and Human Services, as determined
by the Secretary, to those that would otherwise apply under section
1833, to the extent such alternative methods are necessary to preserve
the scientific validity of such trials or studies. For example,
Medicare may make an alternative method of payment for items and
services provided under clinical trials where masking the identity of
interventions from patients and investigators is necessary to comply
with the particular trial or study design. We are inviting comments on
our proposal.
4. Proposed Coding and Payment for Category B IDE Studies Regulation
Text Changes
We propose to codify our proposed process of utilizing a single
packaged payment for Category B IDE studies, including the cost of the
device and routine care items and services, in the regulation text for
payment to hospitals in a new Sec. 419.47. In particular, we propose
to provide in new Sec. 419.47(a) that CMS will create a new HCPCS
code, or revise an existing HCPCS code, to describe a Category B IDE
study, which would include both the treatment and control arms, related
device(s) of the study, as well as routine care items and services, as
specified under Sec. 405.201, when CMS determines that the Medicare
coverage IDE study criteria at Sec. 405.212 are met, and a new or
revised code is necessary to preserve the scientific validity of the
IDE study. Additionally, in a new section, Sec. 419.47(b), we propose
that when we create a new HCPCS code or revise an existing HCPCS code
under proposed paragraph (a), we will make a single packaged payment
for the HCPCS code that includes payment for the investigational
device, placebo control, and routine care items and services of a
Category B IDE study, as specified under Sec. 405.201. The payment
would be based on the average resources utilized for each study
participant. For example, the payment would account for the frequency
with which the investigational device is used in the study population.
G. OPPS Payment for Software as a Service
1. Background on Clinical Software and OPPS Add-on Codes Policy
Rapid advances in innovative technology are having a profound
effect on every facet of health care delivery. Novel and evolving
technologies are introducing advances in treatment options that have
the potential to increase access to care for Medicare beneficiaries,
improve outcomes, and reduce overall costs to the program. In some
cases, these innovative technologies are substituting for more invasive
care and/or augmenting the practice of medicine.
New clinical software, which includes clinical decision support
software, clinical risk modeling, and computer aided detection (CAD),
are becoming increasingly available to providers. These technologies
often perform data analysis of diagnostic images from patients. While
many of these technologies are new, we note that clinical software,
particularly CAD, has
[[Page 44685]]
been used to aid or augment clinical decision making for decades. These
technologies rely on complex algorithms or statistical predictive
modeling to aid in the diagnosis or treatment of a patient's condition.
We refer to these algorithm-driven services that assist practitioners
in making clinical assessments, and that providers pay for either on a
subscription or per-use basis, as Software as a Service (SaaS).
Starting in 2018, we began making payment for the SaaS procedure
Fractional Flow Reserve Derived from Computed Tomography (FFRCT), also
known by the trade name HeartFlow. 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 SaaS procedure is intended for clinically stable symptomatic
patients with coronary artery disease, and, in many cases, its use may
eliminate 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 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 main diagnostic/image procedure (i.e., the
primary service). In the CY 2018 OPPS/ASC final rule, however, we
determined that it was appropriate for HeartFlow to receive a separate
payment because the analytics are performed by a separate entity (that
is, a HeartFlow technician who conducts computer analysis offsite)
rather than the provider performing the CT scan (82 FR 52422 through
52425). 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 SaaS procedure that
indicated the price of the procedure was approximately $1,500. In CY
2020, we utilized our low-volume payment policy to calculate
HeartFlow's arithmetic mean to assign it to New Technology APC 1511
(New Technology --Level 11 ($901-$1000)) with a payment rate of $950.00
(84 FR 61220 through 61221). We continued this APC assignment in CY
2021 and CY 2022 using our equitable adjustment authority (84 FR 85941
through 85943; 86 FR 63533 through 63535). For CY 2023, we propose to
move HeartFlow (HCPCS 0503T) from New Technology APC 1511 to APC 5724
(Level 4 Diagnostic Tests and Related Services), a clinical APC, as we
believe we have enough data to make an appropriate clinical APC
assignment for HeartFlow. We direct readers to section III.E of this
proposed rule for a more detailed discussion of the proposed Heartflow
clinical APC assignment.
While HeartFlow was the first SaaS procedure for which we made
separate payment under the OPPS, we have since begun paying for other
SaaS procedures In CY 2021, we assigned CPT code 92229 (Imaging of
retina for detection or monitoring of disease; point-of-care automated
analysis and report, unilateral or bilateral), an artificial
intelligence system to detect diabetic retinopathy known as IDx-DR to
APC 5733 with the status indicator ``S'' (85 FR 85960 to 85961). IDx-DR
uses an artificial intelligence algorithm to review images of a
patient's retina to provide a clinical decision as to whether the
patient needs to be referred to an eyecare professional for diabetic
retinopathy or rescreened in twelve months (negative for mild diabetic
retinopathy). Also, in CY 2021, we began paying for CPT code 0615T
(Eye-movement analysis without spatial calibration, with interpretation
and report), which involves the use of the EyeBOX system as an aid in
the diagnosis of concussion. We assigned EyeBOX to APC 5734 with the
status indicator ``Q1,'' to indicate that the code is conditionally
packaged when performed with another service on the same day (85 FR
85952 to 85953).
Over the past several years, the AMA has established several codes
that describe SaaS procedures. HeartFlow, IDx-DR, and the EyeBox System
are each described by single CPT codes. But for a procedure known by
the tradename LiverMultiScan, the CPT editorial panel created two CPT
codes for CY 2022, a primary code and an add-on code:
0648T: Quantitative magnetic resonance for analysis of
tissue composition (e.g., fat, iron, water content), including
multiparametric data acquisition, data preparation and transmission,
interpretation and report, obtained without diagnostic MRI examination
of the same anatomy (e.g., organ, gland, tissue, target structure)
during the same session.
0649T: Quantitative magnetic resonance for analysis of
tissue composition (e.g., fat, iron, water content), including
multiparametric data acquisition, data preparation and transmission,
interpretation and report, obtained with diagnostic MRI examination of
the same anatomy (e.g., organ, gland, tissue, target structure) (List
separately in addition to code for primary procedure).
LiverMultiScan uses clinical software to aid the diagnosis and
management of chronic liver disease through analysis using proprietary
algorithms of MR images acquired from patients' providers. As described
above, the coding for LiverMultiScan is bifurcated into CPT code 0648T,
billable when LiverMultiScan is used to analyze already existing
images, and CPT add-on code 0649T, describing the LiverMultiScan
software analysis, which is adjunctive to the acquisition of the MR
images. In accordance with our OPPS policy, we review all new CPT codes
and, for those that are payable under the OPPS, we assign them to
appropriate APCs and make status indicator assignments for them. In the
CY 2022 OPPS/ASC final rule with comment period, we assigned CPT code
0648T to New Technology APC 1511 (86 FR 63542). Given the dependent
nature and adjunctive characteristics of procedures described by add-on
codes and in light of our longstanding OPPS packaging principles,
payment for add-on codes is generally packaged into the primary
procedure. In the CY 2014 OPPS/ASC final rule with comment period (78
FR 74942 through 74945) and in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66817 through 66818), we stated that procedures
described by add-on codes represent an extension or continuation of a
primary procedure, which means they are ancillary, supportive,
dependent, or adjunctive to a primary service. Add-on codes describe
services that are always performed in addition to a primary procedure
and are never reported as a stand-alone code. Because the second
LiverMultiScan code--CPT code 0649T--is an add-on code, in accordance
with our current OPPS policy, we packaged payment for it with the
primary service with which it is furnished, rather than paying for it
separately as we do for the primary LiverMultiScan code--CPT code 0648T
(86 FR 63541 through 63543).
2. Recent CPT Codes for SaaS Procedures
The AMA has continued to establish new CPT codes that describe SaaS
procedures using two codes: a primary code that describes the
standalone clinical software service and an add-on code that describes
a clinical software service that is adjunctive to and billed concurrent
with a diagnostic imaging service. The standalone code is billed
[[Page 44686]]
when no additional imaging is required because raw images from a prior
scan are available for the software to analyze, while the add-on code
is billed with an imaging service when a prior imaging scan is
unavailable, or the prior images are insufficient. If a patient needs a
SaaS procedure and has no existing diagnostic images, the patient would
undergo the diagnostic imaging (i.e., CT or MRI), and the SaaS
procedure. In this scenario, the provider would report the diagnostic
imaging service code and the SaaS add-on code on the same day of
service. In contrast, if a patient has pre-existing diagnostic images,
the provider would only need to perform the SaaS procedure and would
only report the standalone SaaS code.
Please see Table 49 for recent CPT codes for SaaS procedures,
including LiverMultiScan. For CY 2022, the CPT Editorial Panel also
established CPT codes 0721T, 0722T, 0723T, and 0724T.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP26JY22.069
[[Page 44687]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.070
BILLING CODE 4120-01-C
The standalone codes associated with LiverMultiScan (CPT code
0648T), Optellum LCP (CPT code 0721T), and QMRCP (CPT code 0723T) are
paid separately under the OPPS and assigned to specific APCs as
described in Table 49. However, according to our existing packaging
policy, we would package payment for the add-on codes, specifically,
CPT codes 0649T, 0722T, and 0724T, into the associated diagnostic
imaging service.
3. CY 2023 Proposal for SaaS Add-on Codes
From 2021 to 2022, we reviewed and approved New Technology
applications for the LiverMultiScan, Optellum, and QMRCP SaaS
procedures. LiverMultiScan was assigned to a New Technology APC
effective January 1, 2022, and Optellum and QMRCP were assigned to New
Technology APCs effective July 1, 2022. While the standalone codes for
these services are assigned to New Technology APCs and are separately
payable, applicants have informed us that the services described by the
add-on codes, specifically, CPT codes 0649T, 0722T, and 0724T, should
also be paid separately because the technologies are new and associated
with significant costs.
Although the CPT Editorial Panel has designated these codes as add-
on codes, the services described by CPT codes 0649T, 0722T, and 0724T
are not consistent with our definition of add-on services. In many
instances, the costs associated with the add-on codes exceed the costs
of the imaging service with which they would be billed, and we believe
these add-on codes describe separate and distinct services that should
be paid separately, rather than as services that are ancillary,
supportive, dependent, or adjunctive to a primary service into which
their payment is packaged. Therefore, for CY 2023, we propose not to
recognize the select CPT add-on codes that describe SaaS procedures
under the OPPS and instead establish HCPCS codes, specifically, C-
codes, to describe the add-on codes as standalone services that would
be billed with the associated imaging service. We believe the payment
for the proposed C-codes describing the SaaS procedures with add-on CPT
codes, when billed concurrent with the acquisition of the images,
should be equal to the payment for the SaaS procedures when the
services are furnished without imaging and described by the standalone
CPT code because the SaaS procedure is the same regardless of whether
it is furnished with or without the imaging service. Therefore, we
propose the C-codes be assigned to identical APCs and have the same
status indicator assignments as their standalone codes.
For the LiverMultiScan service, we propose not to recognize CPT
code 0649T under the OPPS and instead propose to establish C97X1 to
describe the analysis of the quantitative magnetic resonance images
that must be billed alongside the relevant CPT code describing the
acquisition of the images.
[[Page 44688]]
Below is the proposed long descriptor for the service:
C97X1: Quantitative magnetic resonance analysis of tissue
composition (e.g., fat, iron, water content), includes multiparametric
data acquisition, preparation, transmission, interpretation and report,
performed in the same session and/or same date with diagnostic MRI
examination of the same anatomy (e.g., organ, gland, tissue, target
structure).
For the Optellum LCP service, we propose not to recognize CPT code
0722T and instead propose to establish C97X2 to describe the use of
Optellum LCP that must be billed alongside a concurrent CT scan. Below
is the proposed long descriptor for the service:
C97X2: Quantitative computed tomography (CT) tissue
characterization, includes data acquisition, preparation, transmission,
interpretation and report, performed in the same session and/or same
date with concurrent CT examination of any structure contained in the
acquired diagnostic imaging dataset.
For the QMRCP service, we propose not to recognize CPT code 0724T
and instead propose to establish C97X3 to describe the use of QMRCP
that must be billed alongside a concurrent CT scan. Below is the
proposed long descriptor for the service:
C97X3: Quantitative magnetic resonance
cholangiopancreatography (QMRCP) includes data acquisition,
preparation, transmission, interpretation and report, performed in the
same session and/or same date with diagnostic magnetic resonance
imaging (MRI) examination of the same anatomy (e.g., organ, gland,
tissue, target structure).
The proposed payment rates for C97X1, C97X2, and C97X3, as well as
the standalone CPT codes that describe the same SaaS procedures, can be
found in Addendum B to this proposed rule, which is available via the
CMS website.
4. Comment Solicitation on Payment Policy for SaaS Procedures
Consistent with our OPPS payment policies, we review new CPT codes
and determine whether the items or services described by the codes are
appropriate for payment under the OPPS. For codes that are appropriate
for payment, we propose the appropriate payment indicator, known as the
status indicator (SI) under the OPPS, and APC assignment, according to
our OPPS policies. We note the new SaaS procedures have been assigned
Category III CPT codes by the AMA. Because we generally do not have
hospital claims data for new codes, the payment indicator and APC
assignments are determined based on several factors, which include but
are not limited to:
Review of resource costs and clinical similarity of the
service to existing procedures;
Input from our medical advisors; and
Other information available to us (75 FR 71909).
Although we have begun paying separately for SaaS procedures under
the OPPS relatively recently, with the HeartFlow procedure being the
first separately payable SaaS procedure in CY 2018, we recognize that
certain clinical decision support software, including machine learning
or ``AI,'' has been available for many years. In the past ten years,
clinical decision support software has been commonly used alongside
electronic medical records by medical practitioners. Nonetheless, the
number of FDA approved or cleared ``machine learning'' or ``AI''
clinical software programs has rapidly increased in the past few years.
We note that the FDA has approved many SaaS procedures for similar
functions: there are at least six software products that purport to
detect findings in Computed Tomography studies of the chest.\139\
Additionally, we note some clinical software developers are now using
alternative licensing that charges per use rather than using the
traditional annual subscription or bulk use subscription. Empirical
research has shown that pay-per-use may lead to overuse of ``AI''
technology.\140\ As a result of these variables and potentially others,
there is significant price variation within the SaaS procedure space.
---------------------------------------------------------------------------
\139\ https://www.fda.gov/medical-devices/software-medical-device-samd/artificial-intelligence-and-machine-learning-aiml-enabled-medical-devices.
\140\ https://www.nature.com/articles/s41746-022-00609-6.pdf.
---------------------------------------------------------------------------
We recognize that, as described in the introduction to this
section, SaaS procedures are a heterogenous group of services, which
presents challenges when it comes to adopting payment policy for SaaS
procedures as a whole. Due to the novel and evolving nature of these
technologies, it has been challenging to compare some SaaS procedures
to existing medical services for purposes of determining clinical and
resource similarity.
We are therefore soliciting public comment on a payment approach
that would broadly apply to SaaS procedures, including:
How to identify services that should be separately
recognized as an analysis distinct from both the underlying imaging
test or the professional service paid under the PFS;
How to identify costs associated with these kinds of
services;
How these services might be available and paid for in
other settings (physician offices, for example); and
How we should consider payment strategies for these
services across settings of care.
We are also seeking comment on the specific payment approach we
might use for these services under the OPPS as SaaS-type technology
becomes more widespread across healthcare which are not limited to
imaging services. For example, we could consider packaging payment for
the diagnostic image and the SaaS procedure under new HCPCS codes,
(i.e., G-codes), to efficiently and cost-effectively pay for SaaS
procedures. These G-codes could broadly describe the diagnostic image
service and any SaaS procedure performed. Under this approach, the OPPS
would not recognize either the standalone or the add-on codes
describing SaaS procedures. Instead, all associated imaging and the
SaaS would be described by a single HCPCS code, which could be assigned
to a relevant clinical APC. An example of this would be hypothetical
code GXXX1 (Computed tomography, thorax, diagnostic; with or without
contrast material and with concurrent or subsequent computed analysis
of the original image for further interpretation and report using a
standardized computing instrument.), which describes both diagnostic
imaging and any associated SaaS for the thorax region of the body and
could be assigned to APC 5573 (Level 3 Imaging with Contrast).
Alternatively, we could expand composite APCs, which provide a
single payment for groups of services that are performed together,
including the diagnostic imaging and SaaS procedure, during a single
clinical encounter to result in the provision of a complete service.
A third approach could utilize HCPCS codes (i.e., G- or C- codes)
to describe both the diagnostic imaging and the SaaS procedure, and
then assign the code that describes the combined services to New
Technology APCs that would pay for both services.
We welcome input from interested parties on these payment
approaches and any additional payment approaches that would enhance our
ability to provide equitable payment for SaaS procedures while
protecting the Medicare trust fund.
Finally, we are aware that bias in software algorithms has the
potential to disparately affect the health of certain
[[Page 44689]]
populations.\141\ Therefore, in addition to our comment solicitation on
payment approaches, we are seeking comments on how we could encourage
software developers and other vendors to prevent and mitigate bias in
their algorithms and predictive modeling. We would also appreciate
feedback on how we can accurately evaluate and ensure that the
necessary steps have been taken to prevent and mitigate bias in
software algorithms to the extent possible.
---------------------------------------------------------------------------
\141\ https://www.science.org/doi/10.1126/science.aax2342.
---------------------------------------------------------------------------
H. Proposed Payment Adjustments under the IPPS and OPPS for Domestic
NIOSH-Approved Surgical N95 Respirators
In the FY 2023 IPPS/LTCH PPS proposed rule, we requested public
comments on potential IPPS and OPPS payment adjustments for wholly
domestically made National Institute for Occupational Safety & Health
(NIOSH)-approved surgical N95 respirators (87 FR 28622 through 28625).
Given the importance of NIOSH-approved surgical N95 respirators in
protecting hospital personnel and beneficiaries from the SARS-CoV-2
virus and future respiratory pandemic illnesses, we indicated we were
considering whether it might be appropriate to provide payment
adjustments to hospitals to recognize the additional resource costs
they incur to acquire NIOSH-approved surgical N95 respirators that are
wholly domestically made. We stated that NIOSH-approved surgical N95
respirators, which faced severe shortage at the onset of the COVID-19
pandemic, are essential for the protection of patients and hospital
personnel that interface with patients. We indicated that procurement
of NIOSH-approved surgical N95 respirators that are wholly domestically
made, while critical to pandemic preparedness and protecting health
care workers and patients, can result in additional resource costs for
hospitals.
We said we were interested in feedback and comments on the
appropriateness of payment adjustments that would account for these
additional resource costs. We stated that we believe such payment
adjustments could help achieve a strategic policy goal, namely,
sustaining a level of supply resilience for NIOSH-approved surgical N95
respirators that is critical to protect the health and safety of
personnel and patients in a public health emergency. We stated we were
considering such payment adjustments for 2023 and potentially
subsequent years.
As described in more detail in the sections that follow, and for
the reasons discussed, we propose to make a payment adjustment under
the OPPS and IPPS for the additional resource costs of domestic NIOSH-
approved surgical N95 respirators for cost reporting periods beginning
on or after January 1, 2023.
2. General Background and Overview of Proposal
As discussed in the FY 2023 IPPS/LTCH PPS proposed rule, President
Biden issued Executive Order (E.O.) 13987, titled ``Organizing and
Mobilizing the United States Government To Provide a Unified and
Effective Response To Combat COVID-19 and To Provide United States
Leadership on Global Health and Security'' on January 20, 2021 (86 FR
7019). This order launched a whole-of-government approach to combat the
coronavirus disease 2019 (COVID-19) and prepare for future biological
and pandemic threats. This response has continued over the past year.
In March 2022, President Biden released the National COVID-19
Preparedness Plan that builds on the progress of the prior 13 months
and lays out a roadmap to fight COVID-19 in the future.\142\ Both the
ongoing threat of COVID-19 and the potential for future pandemics
necessitate significant investments in pandemic preparedness.
---------------------------------------------------------------------------
\142\ White House, National COVID-19 Preparedness Plan, March
2022; https://www.whitehouse.gov/wpcontent/uploads/2022/03/NAT-COVID-19-PREPAREDNESS-PLAN.pdf.
---------------------------------------------------------------------------
Availability of personal protective equipment (PPE) in the health
care sector is a critical component of this preparedness, and one that
displayed significant weakness in the beginning of the COVID-19
pandemic. In spring of 2020, supply chains for PPE faced severe
disruption due to lockdowns that limited production, and unprecedented
demand spikes across multiple industries. Supply of surgical N95
respirators--a specific type of filtering facepiece respirator used in
clinical settings--was one type of PPE that was strained in hospitals.
So-called ``just-in-time'' supply chains that minimize stockpiling, in
addition to reliance on overseas production, left U.S. hospitals unable
to obtain enough surgical N95 respirators to protect health care
workers. Prices for surgical N95s soared, from an estimated $0.25-$0.40
range \143\ to $5.75 \144\ or even $12.00 in some cases.\145\ Unable to
obtain surgical N95s regulated by NIOSH, hospitals had to turn to
KN95s--a Chinese standard of respirator-- and other non-NIOSH-approved
disposable respirators that were authorized under Emergency Use
Authorization (EUA). Concerns were raised during the COVID-19 pandemic
regarding counterfeit respirators. NIOSH evaluates and approves
surgical N95s to meet efficacy standards for air filtration and
protection from fluid hazards present during medical procedures. KN95
respirators, on the other hand, are not regulated by NIOSH. KN95s have
faced particular counterfeit and quality risks--with NIOSH finding that
about 60 percent of KN95 respirators that it evaluated during the
COVID-19 pandemic in 2020 and 2021 did not meet the particulate filter
efficiency requirements that they intended to meet.\146\ Failure to
meet these requirements compromises safety of health care personnel and
patients.
---------------------------------------------------------------------------
\143\ Department of Health and Human Services, Office of the
Assistant Secretary for Preparedness and Response, Supply Chain
Control Tower analysis.
\144\ Society for Healthcare Organization Procurement
Professionals, COVID-19 PPD Cost Analysis, April 2020; http://cdn.cnn.com/cnn/2020/images/04/16/shopp.covid.ppd.costs.analysis_.pdf.
\145\ Washington Post, ``U.S. sent millions of face masks to
China early this year, ignoring pandemic warning signs,'' April
2020; https://www.washingtonpost.com/health/us-sent-millions-of-face-masks-to-china-early-this-yearignoring-pandemic-warning-signs/2020/04/18/aaccf54a-7ff5-11ea-8013-1b6da0e4a2b7_story.html.
\146\ U.S. Centers for Disease Control and Prevention ``Types of
Masks and Respirators'';https://www.cdc.gov/coronavirus/2019-ncov/prevent-getting-sick/types-of-masks.html.
---------------------------------------------------------------------------
Over the course of the pandemic, U.S. industry responded to the
shortages and dramatically increased production of N95s. Today, the
majority of surgical N95s purchased by hospitals are assembled in the
U.S., and prices have returned to rates closer to $0.70 per
respirator.\147\ However, risks remain to maintain preparedness for
COVID-19 and future pandemics. It is important to maintain this level
of domestic production for surgical N95s, which provide the highest
level of protection from particles when worn consistently and properly,
protecting both health care personnel and patients from the transfer of
microorganisms, body fluids, and particulate material--including the
virus that causes COVID-19. Additionally, it is important as a long-
term goal to ensure that a sufficient share of those surgical N95s are
wholly made in the U.S.--that is, including raw materials and
components. The COVID-
[[Page 44690]]
19 pandemic has illustrated how overseas production shutdowns, foreign
export restrictions, or ocean shipping delays can jeopardize
availability of raw materials and components needed to make critical
public health supplies. In a future pandemic or COVID-19-driven surge,
hospitals need to be able to count on PPE manufacturers to deliver the
equipment they need on a timely basis in order to protect health care
workers and their patients. Sustaining a level of wholly domestic
production of surgical N95 respirators is integral to maintaining that
assurance.
---------------------------------------------------------------------------
\147\ Department of Health and Human Services, Office of the
Assistant Secretary for Preparedness and Response, Supply Chain
Control Tower analysis
---------------------------------------------------------------------------
This policy goal--ensuring that quality PPE is available to health
care personnel when needed by maintaining production levels of wholly
domestically made PPE-- is emphasized in the National Strategy for a
Resilient Public Health Supply Chain, published in July 2021 as a
deliverable of President Biden's Executive Order 14001 on ``A
Sustainable Public Health Supply Chain.'' To help achieve this goal,
the U.S. Government is committing to purchase wholly domestically made
PPE in line with new requirements in section 70953 of the
Infrastructure Investment and Jobs Act (Pub. L. 117-58). These new
contract requirements stipulate that PPE purchased by covered
departments must be wholly domestically made--that is, the products as
well as their materials and components must be grown, reprocessed,
reused, or produced in the U.S.
The Federal Government's procurement of wholly domestically made
PPE will help achieve the stated policy goal. However, the U.S.
Government alone cannot sustain the necessary level of production. As
outlined in the previously mentioned National Strategy for a Resilient
Public Health Supply Chain, the U.S. Government is only one small part
of the market for PPE. Hospitals are the primary purchasers and users
of medical PPE including surgical N95 respirators. Sustaining a strong
domestic industrial base for PPE--in order to be prepared for future
pandemics or COVID-19-driven surges and protect Americans' health
during such times--therefore, requires hospitals' support.
Surgical N95 respirators are a particularly critical type of PPE
needed to protect personnel and beneficiaries from the SARS-CoV-2 virus
and future respiratory pandemic illnesses. However, wholly domestically
made NIOSH-approved surgical N95 respirators are generally more
expensive than foreign-made ones. Therefore, we stated in the FY 2023
IPPS/LTCH PPS proposed rule that we believe a payment adjustment that
reflects, and offsets, the additional marginal costs that hospitals
face in procuring wholly domestically made NIOSH-approved surgical N95
respirators might be appropriate. These marginal costs are due to
higher prices for wholly domestically made NIOSH-approved surgical
N95s, which, in turn, primarily stem from higher costs of manufacturing
labor in the U.S. compared to costs in countries such as China, where
many N95 and other respirators are made. We stated that such a payment
adjustment might provide sustained support over the long term to
hospitals that purchase wholly domestically made NIOSH-approved
surgical N95 respirators, and could help safeguard personnel and
beneficiary safety over the long term by sustaining production and
availability of these respirators.
As previously noted, in the FY 2023 IPPS/LTCH PPS proposed rule, we
requested public comments on potential IPPS and OPPS payment
adjustments for wholly domestically made NIOSH-approved surgical N95
respirators. We received many comments that were helpful in developing
the proposed payment adjustment discussed later in this section. For
instance, many commenters were supportive of a payment adjustment,
acknowledging the importance of surgical N95 respirators in keeping
health care workers and patients safe and attesting to the difficulties
of procuring surgical N95 respirators during the height of the COVID-19
pandemic. The majority of commenters supported an approach of CMS
making biweekly interim lump-sum payments that would be reconciled at
cost report settlement, although some commenters preferred a claims-
based approach. Many commenters urged CMS to minimize the
administrative burden on hospitals in the development of any N95
payment policy. We also acknowledge the comments of MedPAC and others
stating that Medicare payment policy is not the most appropriate
mechanism to support domestic manufacturing of medical supplies. As
discussed, because hospitals are the primary purchasers and users of
medical PPE, including surgical N95 respirators, we believe a payment
adjustment that reflects the additional marginal costs that hospitals
face in procuring wholly domestically made NIOSH-approved surgical N95
respirators may help to sustain their domestic production and
availability, and thereby help to safeguard personnel and beneficiary
safety over the long term. We thank everyone who submitted comments for
their feedback.
We propose to make a payment adjustment under the OPPS and IPPS for
the additional resource costs that hospitals face in procuring domestic
NIOSH-approved surgical N95 respirators, as defined in Section X.H.3 of
this proposed rule, for cost reporting periods beginning on or after
January 1, 2023. For the IPPS, we propose to make this payment
adjustment under section 1886(d)(5)(I) of the Act, which authorizes the
Secretary to provide by regulation for such other exceptions and
adjustments to the payment amounts under section 1886(d) of the Act as
the Secretary deems appropriate. For the OPPS, we propose to make this
payment adjustment under section 1833(t)(2)(E) of the Act, which
authorizes the Secretary to establish, in a budget neutral manner,
other adjustments as determined to be necessary to ensure equitable
payments.
3. Proposed Definition of Domestic NIOSH-approved Surgical N95
Respirators
For purposes of this policy, we propose to categorize all NIOSH-
approved surgical N95 respirators purchased by hospitals into two
categories: (1) Domestic NIOSH-approved surgical N95 respirators; and
(2) Non-domestic NIOSH-approved surgical N95 respirators.
As discussed, it is critically important to ensure that a
sufficient share of surgical N95s are wholly made in the U.S.--that is,
including raw materials and components. We believe that the most
appropriate framework for determining if a NIOSH-approved surgical N95
respirator is wholly made in the U.S. and therefore, considered
domestic for purposes of the proposed adjustments, is the Berry
Amendment. The Berry Amendment is a statutory requirement familiar to
manufacturers that restricts the Department of Defense (DoD) from using
funds appropriated or otherwise available to DoD for procurement of
food, clothing, fabrics, fibers, yarns, other made-up textiles, and
hand or measuring tools that are not grown, reprocessed, reused, or
produced in the United States.\148\ Berry Amendment restrictions are
implemented by the DoD Federal Acquisition Regulation Supplement
(DFARS) 252.225-7002, and State DOD cannot acquire specified ``items,
either as end products or components, unless the items have been grown,
reprocessed, reused, or produced in the United States.'' \149\ Unless
DOD grants a waiver
[[Page 44691]]
because domestic firms do not make the product or because other
exceptions in the law are met, the entire production process of an
affected product, from the production of raw materials to the
manufacture of all components to final assembly, must be performed in
the United States.\150\
---------------------------------------------------------------------------
\148\ https://www.trade.gov/berry-amendment.
\149\ https://www.trade.gov/berry-amendment-implementation.
\150\ https://sgp.fas.org/crs/misc/R44850.pdf.
---------------------------------------------------------------------------
The Berry Amendment has been critical to the viability of the
textile and clothing production base in the United States and has been
critical to maintaining the safety and security of our armed forces, by
requiring covered items to be produced in the United States.\151\ We
believe that using the Berry Amendment as the basis for defining
domestic NIOSH-approved surgical N95 respirators will provide similar
support to U.S. surgical N95 respirator manufacturers and help ensure
that quality surgical N95 respirators are available to health care
personnel when needed.
---------------------------------------------------------------------------
\151\ https://www.trade.gov/berry-amendment.
---------------------------------------------------------------------------
Therefore, based on the Berry Amendment, we propose to define a
NIOSH-approved surgical N95 respirator as domestic if the respirator
and all of its components are grown, reprocessed, reused, or produced
in the United States. We propose that for purposes of this policy all
other NIOSH-approved surgical N95 respirators would be non-domestic.
We recognize that a hospital cannot fully independently determine
if a NIOSH-approved surgical N95 respirator it purchases is domestic
under our proposed definition. Therefore, we propose that a hospital
may rely on a written statement from the manufacturer stating that the
NIOSH-approved surgical N95 respirator the hospital purchased is
domestic under our proposed definition. The written statement must have
been certified by one of the following: (i) the manufacturer's Chief
Executive Officer (CEO); (ii) the manufacturer's Chief Operating
Officer (COO); or (iii) an individual who has delegated authority to
sign for, and who reports directly to, the manufacturer's CEO or COO.
The written statement, or a copy of such statement, could be obtained
by the hospital directly from the manufacturer, obtained through the
supplier or Group Purchasing Organization (GPO) for the hospital who
obtained it from the manufacturer, or obtained by the hospital because
it was included with or printed on the packaging by the manufacturer.
This written statement may be required to substantiate the data
included on the supplemental cost reporting form as discussed in
section X.H.5 of this proposed rule. The recordkeeping requirements at
current Sec. 413.20, require providers of services to maintain
sufficient financial records and statistical data for proper
determination of costs payable under Medicare.
4. Proposed Payment Adjustment Amount Under the IPPS and OPPS for
Domestic NIOSH-approved Surgical N95 Respirators
We expect that domestic NIOSH-approved surgical N95 respirators
will continue to be generally more costly than non-domestic
respirators. However, it is challenging to precisely predict and
quantify the future cost differences given the dynamic nature of the
current marketplace and data limitations. Therefore, we propose to
initially base the payment adjustments on the IPPS and OPPS shares of
the estimated difference in the reasonable costs \152\ of a hospital to
purchase domestic NIOSH-approved surgical N95 respirators compared to
non-domestic respirators. These payments would be provided biweekly as
interim lump-sum payments to the hospital and would be reconciled at
cost report settlement. Under this proposal the biweekly interim lump-
sum payments would be available for cost reporting periods beginning on
or after January 1, 2023. Any provider could make a request for these
biweekly interim lump sum payments for an applicable cost reporting
period, as provided under 42 CFR 413.64 (Payments to providers:
Specific rules) and 42 CFR 412.116(c) (Special interim payments for
certain costs). These payment amounts would be determined by the MAC,
consistent with existing policies and procedures. In general, interim
payments are determined by estimating the reimbursable amount for the
year using Medicare principles of cost reimbursement and dividing it
into twenty-six equal biweekly payments. The estimated amount is based
on the most current cost data available, which will be reviewed and, if
necessary, adjusted at least twice during the reporting period. (See
CMS Pub 15-1 2405.2 for additional information.) The MACs would
determine the interim lump-sum payments based on the data the hospital
may provide that reflects the information that will be included on the
N95 supplemental cost reporting form as discussed in section X.H.5 of
this proposed rule. In future years, if finalized, the MACs would
determine the interim biweekly lump-sum payments utilizing information
from the prior year's surgical N95 supplemental cost reporting form,
which may be adjusted based on the most current data available. This
would be consistent with the current policies for medical education
costs, and bad debts for uncollectible deductibles and coinsurance paid
on interim biweekly basis as noted in CMS Pub 15-1 2405.2. As described
in more detail in section X.H.5 of this proposed rule, a hospital would
separately report on its cost report the aggregate cost and total
quantity of domestic NIOSH-approved surgical N95 respirators and non-
domestic respirators for cost reporting periods beginning on or after
January 1, 2023. This information, along with existing information
already collected on the cost report as shown in section X.H.5 of this
proposed rule, would be used to calculate a Medicare payment for the
estimated cost differential, specific to each hospital, incurred due to
the purchase of domestic NIOSH-approved surgical N95 respirators
compared to non-domestic respirators.
---------------------------------------------------------------------------
\152\ In accordance with the principles of reasonable cost as
set forth in section 1861(v)(1)(A) of the Act and in 42 CFR 413.1
and 413.9.
---------------------------------------------------------------------------
As previously discussed, for the IPPS, we propose to make this
payment adjustment for the additional resource costs of domestic NIOSH-
approved surgical N95 respirators under section 1886(d)(5)(I) of the
Act. To further support the strategic policy goal of sustaining a level
of supply resilience for NIOSH-approved surgical N95 respirators that
is critical to protect the health and safety of personnel and patients
in a public health emergency, we are not proposing to make the IPPS
payment adjustment budget neutral under the IPPS.
As also previously discussed, for the OPPS, we propose to make the
payment adjustment for these additional resource costs under section
1833(t)(2)(E) of the Act. Section 1833(t)(2)(E) of the Act provides
that the Secretary shall establish, in a budget neutral manner, other
adjustments (in addition to outlier and transitional pass-through
payments) necessary to ensure equitable payments, such as adjustments
for certain classes of hospitals. Consistent with this authority, the
proposed OPPS payment adjustment would be budget neutral.
As we gain more experience with this payment policy, if finalized,
its impact on the N95 marketplace, and the data collected, we may
revisit the approach of payments based on the reasonable costs of each
hospital. See the discussion in section X.H.8 of this proposed rule
regarding potential future rulemaking to refine our proposed approach.
[[Page 44692]]
5. Proposed Calculation of the OPPS and IPPS Payment Adjustments on the
Cost Report
In order to calculate the N95 payment adjustment for each eligible
cost reporting period, we propose to create a new supplemental cost
reporting form that will collect from hospitals the additional
information described in this section. This information would be used
along with other information already collected on the hospital cost
report to calculate IPPS and OPPS payment adjustment amounts. The
information collection requirements for the proposed new supplemental
cost reporting worksheet are discussed in section XXII.F of this
proposed rule.
In this section we describe the information we propose to collect
on the new supplemental cost reporting form and the proposed steps for
determining the IPPS and OPPS payment adjustment amounts.
Step 1--Collect additional information on the new supplemental cost
reporting form.
To determine the IPPS and OPPS payment adjustments, we propose to
collect the following information on a new supplemental cost reporting
form:
(1) Total quantity of domestic NIOSH-approved surgical N95
respirators purchased by hospital.\153\
---------------------------------------------------------------------------
\153\ We note for this discussion, reference to the ``hospital''
refers to the ``hospital and hospital healthcare complex'' that
completes the cost report form CMS-2552-10.
---------------------------------------------------------------------------
(2) Total aggregate cost of domestic NIOSH-approved surgical N95
respirators purchased by hospital.
(3) Total quantity of non-domestic NIOSH-approved surgical N95
respirators purchased by hospital.
(4) Total aggregate cost of non-domestic NIOSH-approved surgical
N95 respirators purchased by hospital.
Step 2--Calculate a hospital-specific unit cost differential
between domestic and non-domestic NIOSH-approved surgical N95
respirators.
With the respirator information reported on the new supplemental
cost reporting form we propose to calculate the following statistics on
the new cost report form:
(1) The average cost of domestic NIOSH-approved surgical N95
respirators purchased. This would be calculated by dividing the
reported total aggregate cost of the domestic NIOSH-approved surgical
N95 respirators purchased by the reported total quantity of domestic
NIOSH-approved surgical N95 respirators purchased. If the hospital
purchased zero NIOSH-approved surgical N95 domestic respirators, this
value would be set to 0.
(2) The average cost of non-domestic NIOSH-approved surgical N95
respirators purchased. This would be calculated by dividing the
reported total aggregate cost of the non-domestic NIOSH-approved
surgical N95 respirators purchased by the reported total quantity of
non-domestic NIOSH-approved respirators purchased. If the hospital
purchased zero non-domestic NIOSH-approved surgical N95 respirators,
this value would be set to 0.
(3) The hospital-specific unit cost differential between domestic
and non-domestic NIOSH-approved surgical N95 respirators. This would be
calculated by subtracting the average cost of non-domestic NIOSH-
approved surgical N95 respirators purchased from the average cost of
domestic NIOSH-approved surgical N95 respirators purchased. If the
average cost of non-domestic NIOSH-approved surgical N95 respirators
purchased is greater than the average cost of domestic NIOSH-approved
surgical N95 respirators purchased, this value would be set to 0. As
discussed in section X.H.8, we may consider in future rulemaking
establishing a national minimum average cost for non-domestic NIOSH-
approved surgical N95 respirators purchased that could be used in
determining the hospital-specific unit cost differential for hospitals
that only purchased domestic NIOSH-approved surgical N95 respirators or
that have unusually low average costs for their non-domestic NIOSH-
approved surgical N95 respirators.
Step 3--Calculate a total cost differential for the purchase of
domestic NIOSH-approved surgical N95 respirators.
The next step in the proposed payment adjustment calculation is
determining the total cost differential for the purchase of domestic
NIOSH-approved surgical N95 respirators. This amount represents the
total additional costs the hospital incurred by purchasing domestic
NIOSH-approved surgical N95 respirators over purchasing non-domestic
NIOSH-approved surgical N95 respirators. We propose to calculate this
amount by multiplying the hospital-specific unit cost differential
calculated in Step 2 by the total quantity of domestic NIOSH-approved
surgical N95 respirators purchased reported in Step 1.
Step 4--Determine IPPS and OPPS share of total hospital costs.
The total cost differential calculated in Step 3 is reflective of
all domestic NIOSH-approved surgical N95 respirators used throughout
the hospital while treating all patients. This total cost differential
needs to be disaggregated to estimate the additional costs incurred by
purchasing domestic NIOSH-approved surgical N95 respirators used in
treating patients receiving services paid under IPPS and OPPS,
specifically. To apportion the total cost differential to the IPPS and
OPPS services, we propose to use cost data already reported on the
hospital cost report. We specifically propose to use the following from
the Form CMS-2552-10:
(a) Total costs for all inpatient routine services, ancillary
services, outpatient services, and other reimbursable services as
reported in Worksheet C Part I line 202 column 5.
(b) Total Medicare Part A hospital inpatient costs as reported in
Worksheet D-1 Part II, line 49, column 5.
(c) Total Medicare Part B hospital outpatient costs as reported in
Worksheet D Part V, line 202, column 5 + column 6 + column 7.
We propose to calculate the IPPS percent share of the total cost
differential (calculated in Step 3) as total Medicare Part A hospital
inpatient costs (Step 4b) divided by total costs for all inpatient
routine services, ancillary services, outpatient services, and other
reimbursable services (Step 4a). We propose to calculate the OPPS
percent share of the total cost differential as total Medicare Part B
hospital outpatient costs (Step 4c) divided by total costs for all
inpatient routine services, ancillary services, outpatient services,
and other reimbursable services (Step 4a).
Step 5--Determine IPPS and OPPS Payment Adjustment for Domestic
NIOSH-Approved Surgical N95 Respirators.
To calculate the IPPS payment adjustment for domestic NIOSH-
approved surgical N95 respirators, we propose to multiply the IPPS cost
share (determined in Step 4) by the total cost differential for the
purchase of domestic respirators (Step 3). To calculate the OPPS
payment adjustment for domestic NIOSH-approved surgical N95
respirators, we propose to multiply the OPPS cost share (determined in
Step 4) by the total cost differential for the purchase of domestic
respirators (Step 3). As described previously, these calculated payment
adjustments would be reconciled against interim lump-sum payments
received by the hospital for this policy.
To demonstrate these calculations, in table 50 we have provided an
example for a mock hospital that purchased both domestic and non-
domestic NIOSH-approved surgical N95 respirators during its cost
reporting period beginning on or after January 1, 2023. The example
shows the additional data
[[Page 44693]]
the hospital would report on its supplemental cost reporting form, the
cost data pulled from other hospital cost report worksheets, and the
calculations performed to determine the hospital's IPPS and OPPS
payment adjustment for domestic NIOSH-approved surgical N95
respirators.
BILLING CODE 4120-01-P
[[Page 44694]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.071
[[Page 44695]]
BILLING CODE 4120-01-C
6. Proposed Establishment of the OPPS Payment Adjustment for Domestic
NIOSH-Approved Surgical N95 Respirators in a Budget Neutral Manner
As noted earlier, section 1833(t)(2)(E) of the Act provides that
the Secretary shall establish adjustments necessary to ensure equitable
payments in a budget neutral manner. In order to maintain OPPS budget
neutrality, we propose to develop a spending estimate associated with
this proposed policy. Specifically, this spending estimate would
reflect the OPPS payment adjustment that would be made in CY 2023 for
the additional resource costs of domestic NIOSH-approved surgical N95
respirators used in the treatment of OPPS patients. The data currently
available to calculate this spending estimate is limited. However, we
believe the proposed methodology described next to calculate this
spending estimate for CY 2023 is reasonable based on the information
available.
We propose to calculate the estimated total spending associated
with this policy by multiplying together estimates of the following:
(1) Estimate of the total number of NIOSH-approved surgical N95
respirators used in the treatment of OPPS patients in CY 2023.
(2) Estimate of the difference in the average unit cost of domestic
and non-domestic NIOSH-approved surgical N95 respirators.
(3) Estimate of the percentage of NIOSH-approved surgical N95
respirators used in the treatment of OPPS patients in CY 2023 that are
domestic.
For purposes of this estimate, we believe it is reasonable to
assume that one NIOSH-approved surgical N95 respirator is used per OPPS
encounter. Based on the outpatient claims volume available for
ratesetting in this CY 2023 OPPS proposed rule, we have approximately
103.4 million OPPS claims. Therefore, for CY 2023, we are estimating
that the total number of NIOSH-approved surgical N95 respirators (both
domestic and non-domestic) used in the treatment of OPPS patients in CY
2023 is 103.4 million. Based on available data, our best estimate of
the difference in the average unit cost of domestic and non-domestic
NIOSH-approved surgical N95 respirators is $0.20.
It is particularly challenging to estimate the percentage of
domestically manufactured NIOSH-approved surgical N95 respirators that
will be used in the treatment of OPPS patients in CY 2023. The OMB's
Made in America Office recently conducted a data call on capacity in
which several entities attested to being able to supply 3.6 billion
NIOSH-approved and Berry-compliant surgical N95 respirators annually in
the future if there were sufficient demand. We recognize that it may
take time for this capacity to be fully reflected in hospital
purchases. Therefore, although this would be sufficient capacity to
supply the entire hospital industry if it were to be available and
focused on this segment of the marketplace in 2023, we believe it is
reasonable to assume that this will not happen instantaneously and
hospitals in aggregate may in fact be able to purchase less than half
of their NIOSH-approved surgical N95 respirators as domestic in 2023.
Therefore, for purposes of this OPPS budget neutrality estimate, we
propose to set the percentage of NIOSH-approved surgical N95
respirators used in the treatment of OPPS patients in CY 2023 that are
domestic to 40 percent, or slightly less than half.
We estimate that total CY 2023 OPPS payments associated with this
policy will be $8.3 million (or 103.4 million claims x $0.20 x 40
percent). This represents approximately 0.01 percent of the OPPS, which
we propose to budget neutralize through an adjustment to the OPPS
conversion factor. We note that the volume of claims data available for
ratesetting typically increases between the proposed and final rules,
so this spending estimate may change. However, we believe this proposed
methodology will best approximate CY 2023 OPPS spending associated with
the proposed policy.
We recognize that this proposed approach to estimating budget
neutrality under the OPPS is based on the limited data available. If
finalized, we may consider refining this approach for future years,
especially once data collected on cost reports for this policy is
available.
7. Proposed Regulation Amendments
For the IPPS, we propose to codify this payment adjustment in the
regulations by adding new paragraph (f) to Sec. 412.113 to specify
that, for cost reporting periods beginning on or after January 1, 2023,
a payment adjustment is made to a hospital for the additional resource
costs of domestic NIOSH-approved surgical N95 respirators. The payment
adjustment is based on the estimated difference in the reasonable cost
incurred by the hospital for domestic NIOSH-approved surgical N95
respirators purchased during the cost reporting period as compared to
other NIOSH-approved surgical N95 respirators purchased during the cost
reporting period. We also propose to make conforming changes to Sec.
412.1(a) and Sec. 412.2(f) to reflect the proposed payment adjustment
for the additional resource costs of domestic NIOSH-approved surgical
N95 respirators.
For the OPPS, we propose to codify this payment adjustment in the
regulations by adding a new paragraph (j) to Sec. 419.43 to specify at
new paragraph (j)(1) that, for cost reporting periods beginning on or
after January 1, 2023, CMS makes a payment adjustment for the
additional resource costs of domestic NIOSH-approved surgical N95
respirators. New paragraph (j)(2) would provide that the payment
adjustment is based on the estimated difference in the reasonable cost
incurred by the hospital for domestic NIOSH-approved surgical N95
respirators purchased during the cost reporting period as compared to
other NIOSH-approved surgical N95 respirators purchased during the cost
reporting period. Finally, new paragraph (j)(3) would state that CMS
establishes the payment adjustment under paragraph (j)(2) in a budget
neutral manner.
8. Alternatives Considered
As we gain more experience with this payment policy, if finalized,
its impact on the N95 marketplace, and the data collected, we may
revisit our proposed approach of payments based on the reasonable costs
of each hospital as discussed in section X.H.4 and section X.H.5 of
this proposed rule. As one example, we might base the payment
adjustment on the national average cost differential between a domestic
NIOSH-approved surgical N95 respirator and a non-domestic one as
collected on the hospital cost reports, rather than use hospital
specific differentials. A single national average cost differential
could continue to be implemented as biweekly interim lump-sum payments
reconciled at cost report settlement, or it could be implemented as a
claims-based add-on payment under the IPPS and OPPS. As another example
of a potential future refinement, even if we were to maintain hospital
specific differentials, it may be appropriate to establish a national
minimum average cost for non-domestic NIOSH-approved surgical N95
respirators for use in calculating the payment differential for a
hospital that only uses domestic NIOSH-approved surgical N95
respirators or that has unusually low average costs for its non-
domestic NIOSH-approved surgical respirators. We could potentially
establish such a national minimum average cost using an appropriate
percentile of the average unit cost of
[[Page 44696]]
non-domestic NIOSH-approved surgical N95 respirators across hospitals,
as calculated on the cost report.
We might also revisit in future rulemaking our proposed budget
neutrality approach for the OPPS payments discussed in section X.H.6 of
this proposed rule, as we gain more experience with this payment
policy, if finalized, and the data collected.
We received several comments on the FY 2023 IPPS/LTCH PPS proposed
rule requesting these payment adjustments be expanded to include other
forms of PPE such as gowns and gloves. Therefore, as we gain more
experience with this payment policy, if finalized, we might also
consider in future rulemaking expanding this policy to include other
forms of PPE that are critical for responding to a public health
emergency, including but not limited to elastomeric respirators,
surgical/procedural masks, gloves, and medical gowns.
I. Proposal To Exempt Rural Sole Community Hospitals From the Method To
Control Unnecessary Increases in the Volume of Clinic Visit Services
Furnished in Excepted Off-Campus Provider-Based Departments (PBDs)
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59004
through 59015), we adopted a method to control unnecessary increases in
the volume of the clinic visit service furnished in excepted off-campus
provider-based departments (PBDs) by removing the payment differential
that drives the site-of-service decision and, as a result,
unnecessarily increases service volume in this care setting as compared
to the physician's office setting. We refer readers to the CY 2019
OPPS/ASC final rule with comment period for a detailed discussion of
the background, legislative provisions, and rationale for the volume
control method we adopted beginning in CY 2019. Below we discuss the
specific policy we finalized in the CY 2019 OPPS/ASC final rule with
comment period and its full application under the OPPS beginning in CY
2020.
1. Implementation of a Method To Control Unnecessary Increases in the
Volume of Certain Clinic Visit Services
For the CY 2019 OPPS, under our authority at section 1833(t)(2)(F)
of the Act, we applied an amount equal to the site-specific Medicare
Physician Fee Schedule (PFS) payment rate for nonexcepted items and
services furnished by a nonexcepted off-campus PBD (the PFS-equivalent
rate) for the clinic visit service, as described by HCPCS code G0463,
when provided at an off-campus PBD excepted from section 1833(t)(21) of
the Act (departments that bill the modifier ``PO'' on claim lines). The
PFS-equivalent rate, however, was not immediately applied in full.
Instead, we phased in the reduction in payment for the clinic visit
service described by HCPCS code G0463 in the excepted off-campus PBD
setting over two years. For CY 2019, the payment reduction was
transitioned by applying 50 percent of the total reduction in payment
that would have applied if these departments (departments that bill the
modifier ``PO'' on claim lines) were paid the PFS-equivalent rate for
the clinic visit service. The PFS-equivalent rate was 40 percent of the
OPPS payment for CY 2019 (that is, 60 percent less than the OPPS rate).
Consequently, these departments were paid approximately 70 percent of
the OPPS rate (100 percent of the OPPS rate minus the 30-percent
payment reduction that was applied in CY 2019) for the clinic visit
service in CY 2019.
For CY 2020, the second and final year of the 2-year phase-in, we
stated that we would apply the total reduction in payment that would be
applied if these departments (departments that bill the modifier ``PO''
on claim lines) were paid the site-specific PFS-equivalent rate for the
clinic visit service described by HCPCS code G0463. The PFS-equivalent
rate for CY 2020 was 40 percent of the proposed OPPS payment (that is,
60 percent less than the proposed OPPS rate) for CY 2020. Under this
policy, departments were paid approximately 40 percent of the OPPS rate
(100 percent of the OPPS rate minus the 60-percent payment reduction
that is applied in CY 2020) for the clinic visit service in CY 2020.
The fully phased-in policy has been in effect since CY 2020.
In addition, as we stated in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 59013), for CY 2019 and subsequent years, this
policy has been implemented in a non-budget neutral manner. To
effectively establish a method for controlling the unnecessary growth
in the volume of clinic visits furnished by excepted off-campus PBDs
that does not simply increase other expenditures that are unnecessary
within the OPPS, we explained that we believed the method must be
adopted in a non-budget neutral manner in accordance with the OPPS
statute. The impact of this policy is further described in section X of
this proposed rule.
We note that this policy was previously litigated. On July 17,
2020, the United States Court of Appeals for the District of Columbia
Circuit (D.C. Circuit) ruled in favor of CMS, holding that our
regulation was a reasonable interpretation of the statutory authority
to adopt a method to control for unnecessary increases in the volume of
the relevant service. The appellees petitioned the United States
Supreme Court for a writ of certiorari. On June 29, 2021, the Supreme
Court denied the petition.
In the CY 2019 OPPS/ASC proposed rule (83 FR 37143), we sought
public comment on whether there should be exceptions from this policy
for rural providers, such as those providers that are at risk of
hospital closure or those providers that are rural sole community
hospitals (SCHs). Commenters to the CY 2019 OPPS/ASC proposed rule
expressed concern that this policy proposal would disproportionately
affect safety net hospitals and rural providers (83 FR 59013). Numerous
commenters representing a rural SCH and beneficiaries in the State of
Washington expressed concern about the impact the proposal would have
on their rural SCH. Several commenters also requested that both urban
and rural SCHs, rural referral centers (RRCs), and Medicare-dependent
hospitals be exempted from this policy.
At the time we responded that we shared the commenters' concerns
about access to care, especially in rural areas where access issues may
be more pronounced than in other areas of the country. We stated that
we believed that implementing our policy with a 2-year phase-in would
help to mitigate the immediate impact on rural hospitals (83 FR 59013).
We noted that we might revisit this policy to consider potential
exemptions in the CY 2020 OPPS rulemaking.
In CY 2020 OPPS/ASC final rule with comment period (84 FR 61367),
we again discussed commenters' continued concerns about this policy's
impact on rural providers and safety net health systems. While
acknowledging the validity of these concerns, we emphasized our belief
that a phased-in implementation would help mitigate the impact rural
hospitals might otherwise face. We reiterated that we would continue to
monitor trends for any access to care issues and would potentially
revisit this policy in future rulemaking.
2. Proposed Exemption for Rural Sole Community Hospitals From the
Method To Control Unnecessary Increases in the Volume of Clinic Visits
Furnished Beginning in CY 2023
Since the volume control method was fully phased in by the CY 2020
OPPS/
[[Page 44697]]
ASC final rule with comment period (84 FR 61142), we have continued to
assess how this policy has been implemented, as it affects both the
Medicare program itself and the beneficiaries it serves. This policy
was designed to address unnecessary increases in the volume of clinic
visit services furnished in excepted off-campus PBDs. While we believe
that the method we adopted to control this growth is appropriate, we
are continuing to examine whether all excepted off-campus PBDs should
be subject to the site-specific PFS-equivalent payment rate for the
clinic visit service, as described by HCPCS code G0463. In the CY 2019
OPPS/ASC proposed rule (83 FR 37142), we explained our position that
shifts in the sites of service are unnecessary if the beneficiary can
safely receive the same service in a lower cost setting but instead
receives care in a higher cost setting due to payment incentives. We
described this as beneficiaries moving from (lower cost) physician
offices to (higher cost) HOPDs because of the higher payment rate
available in the HOPD. In these cases, we maintain that to the extent
similar services can be safely provided in more than one setting, we do
not believe it is prudent for the Medicare program to pay more for
these services in one setting than another as doing so results in
service volume increases that we believe are unnecessary. We continue
to believe the difference in payment for these services is a
significant factor in the shift in services from the physician's office
setting to the hospital outpatient department for many hospital types,
which unnecessarily increases hospital outpatient department volume and
Medicare program and beneficiary expenditures. Nonetheless, we
recognize that the volume of clinic visits furnished in off-campus PBDs
of certain hospital types may primarily be driven by factors other than
higher payment, such as service shifts from the inpatient hospital to
outpatient hospital setting and access issues. As explained further
below, we propose to exempt excepted off-campus PBDs of rural SCHs from
our volume control method policy because we believe the volume of the
clinic visit service in PBDs of these hospitals is driven by factors
other than the payment differential for this service. We propose to pay
the full OPPS payment rate, rather than the PFS-equivalent rate under
our volume control method, when the clinic visit is furnished in these
departments.
a. Special Payment Treatment for Rural SCHs
Across the various Medicare payment systems, CMS has established a
number of special payment provisions for rural providers to ensure
access to high quality care for beneficiaries in rural areas. CMS
administers five rural hospital payment designations in which rural or
isolated hospitals that meet specified eligibility criteria receive
higher reimbursement for hospital services than they otherwise would
receive under Medicare's standard payment methodologies. A rural
hospital may qualify as a Critical Access Hospital,\154\ Sole Community
Hospital (SCH),\155\ or Medicare Dependent Hospital \156\--each of
which has different eligibility criteria and payment methodologies.
With the exception of Critical Access Hospitals, rural hospitals may
also qualify as Low Volume Hospitals \157\ and Rural Referral Centers
(RRCs),\158\ which qualify eligible hospitals for additional payments
or exemptions. Not all rural or isolated hospitals receive special
payment treatment under the OPPS. For instance, CAHs are not paid under
the OPPS and are reimbursed at 101 percent of reasonable costs for
outpatient services. PBDs of CAHs are not subject to Section 603 of the
Bipartisan Budget Act of 2015.
---------------------------------------------------------------------------
\154\ 42 CFR 485.601-647.
\155\ 42 CFR 412.92.
\156\ 42 CFR 412.108.
\157\ 42 CFR 412.101.
\158\ 42 CFR 412.96.
---------------------------------------------------------------------------
Rural SCHs are a hospital type that has received special payment
treatment under the OPPS to account for their higher costs and the
disproportionately harmful impact that payment reductions could have on
them. In the CY 2006 OPPS final rule with comment period (70 FR 68556
through 68561), we finalized a payment increase 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. This policy was adopted under section
1833(t)(13)(B) of the Act, which required the Secretary by January 1,
2006 to provide for an appropriate adjustment under paragraph (t)(2)(E)
to reflect the higher costs of hospitals in rural areas if the
Secretary determined, pursuant to a study required by section
1833(t)(13)(A), that the costs to rural hospitals by APC exceeded those
costs for hospitals in urban areas. Our analysis revealed that rural
SCHs had significantly higher costs per unit than urban hospitals. We
have continued to adjust payments for rural SCHs by 7.1 percent each
year since 2006. As discussed in Section II.E of this proposed rule,
for CY 2023 we propose to continue the current policy of utilizing a
7.1 percent payment adjustment for rural SCHs.
Rural SCHs have also been excluded from our policy to adjust
payment for drugs and biologicals acquired under the 340B program. When
we proposed to adjust payments for 340B drugs in the CY 2018 OPPS/ASC
proposed rule (82 FR 33635), we sought public comment on whether, due
to access to care issues, exceptions should be granted to certain
groups of hospitals, such as those with special adjustments under the
OPPS (for example, rural SCHs or PPS-exempt cancer hospitals).
Commenters noted that rural 340B covered entity hospitals depend on the
drug discounts they receive through the 340B Program to provide access
to expensive, necessary care such as labor and delivery and oncology
infusions (82 FR 59365).
Commenters expressed that even with 340B discounts, rural hospitals
like rural SCHs are financially threatened. They noted that rural
hospitals are typically located in lower income economic areas and
would not be able to absorb the proposed reduction in payment for 340B-
purchased drugs. Moreover, commenters suggested that the proposal would
disproportionately affect rural hospitals compared to urban hospitals
and requested that CMS exempt hospitals with an RRC or SCH designation
from the 340B drug payment policy. The commenters asserted that RRCs
and SCHs are rural safety-net hospitals that provide localized care for
Medicare beneficiaries and also serve as ``economic engines'' for many
rural communities. Taking into consideration these comments, for CY
2018 we finalized a policy to exclude rural SCHs from our 340B drug
payment policy and have continued to do so in CYs 2019 through 2022.
b. Utilization of the Clinic Visit Service in Off-Campus Provider-Based
Departments of Rural SCHs
In the CY 2019 OPPS/ASC final rule with comment period in which we
adopted the volume control method policy for certain clinic visits, we
said that to the extent there are lower-cost sites of service
available, beneficiaries and the physicians treating them should be
able to choose the appropriate care setting and not be encouraged to
receive or provide care in settings for which payment rates are higher
solely for financial reasons (83 FR 37139).
[[Page 44698]]
However, many rural providers, and rural SCHs in particular, are often
the only source of care in their communities,\159\ which means
beneficiaries and providers are not merely choosing between a higher
paying off-campus PBD of a hospital and a lower paying physicians'
office setting. The closure of inpatient departments of hospitals and
the shortage of primary care providers in rural areas further drives
utilization to off-campus PBDs in areas where rural SCHs are located.
---------------------------------------------------------------------------
\159\ https://www.shepscenter.unc.edu/wp-content/uploads/dlm_uploads/2017/11/SCHs_Differences_in_Community_Characteristics.pdf.
---------------------------------------------------------------------------
Rural areas often experience lower availability of health care
professionals and hospitals than urban areas.\160\ Access to outpatient
services, particularly in rural areas, is vital to keeping
beneficiaries healthy and out of the hospital because beneficiaries in
rural settings face unique challenges that impact their health.
Compared to their urban counterparts, rural residents generally are
older and poorer.\161\ Rural areas are also disproportionally affected
by declining population rates and decreasing employment rates.\162\ We
have targeted rural SCHs with their add-on payment and exemption from
the 340B payment reductions in an effort to ensure that these providers
with demonstrated additional resource costs remain open to serve the
beneficiaries who rely on them for their care.
---------------------------------------------------------------------------
\160\ https://www.gao.gov/assets/gao-21-93.pdf.
\161\ https://www.gao.gov/assets/gao-21-93.pdf.
\162\ https://www.gao.gov/assets/gao-21-93.pdf.
---------------------------------------------------------------------------
We believe that exempting rural Sole Community Hospitals (rural
SCHs) from payment of the site-specific Medicare Physician Fee Schedule
(PFS)-equivalent payment for the clinic visit service, as described by
HCPCS code G0463, when furnished at an off-campus PBD excepted from
section 1833(t)(21) of the Act (departments that bill the modifier
``PO'' on claim lines) would help to maintain access to care in rural
areas by ensuring rural providers are paid for clinic visit services
provided at off-campus PBDs at rates comparable to those paid at on-
campus departments. Exempting rural SCHs would also target payment of
the full OPPS rate for the clinic visit service to off-campus PBDs of
these hospitals, the majority of which are located in Medically
Underserved Areas (MUAs) as defined by the Health Resources and
Services Administration. Our proposal also aligns with the special
payment treatment rural SCHs receive under the OPPS.
Accordingly, for CY 2023, we propose that excepted off-campus PBDs
(departments that bill the modifier ``PO'' on claim lines) of rural
SCHs, as described under 42 CFR 412.92 and designated as rural for
Medicare payment purposes, would be exempt from our volume control
method of paying the PFS-equivalent rate for the clinic visit service,
as described by HCPCS code G0463. Additionally, we are soliciting
comments on whether it would be appropriate to exempt other rural
hospitals, such as those with under 100 beds, from our volume control
method of paying the PFS-equivalent rate for the clinic visit service.
In CY 2023, for a Medicare beneficiary who receives a clinic visit
service in a non-excepted off-campus PBD of a rural SCH, the standard
unadjusted Medicare OPPS proposed payment would be approximately $131,
with an approximate average copayment of $26. The proposed PFS-
equivalent rate for a clinic visit would be approximately $52, with an
approximate average copayment of $10. Under this proposal, an excepted
off-campus PBD of a rural SCH would continue to bill HCPCS code G0463
with the ``PO'' modifier in CY 2023, but the payment rate for services
described by HCPCS code G0463 when billed with modifier ``PO'' would
now be the full OPPS payment rate. This would cost beneficiaries an
average of an additional $16 per visit.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR
59013), we implemented the volume control method in a non-budget
neutral manner consistent with the OPPS statute. In order to
effectively establish a method for controlling the unnecessary growth
in the volume of clinic visits furnished by excepted off-campus PBDs
that does not simply increase other expenditures that are unnecessary
within the OPPS, we stated that the volume control method in general
would be implemented in a non-budget neutral manner. Here, we propose
to simply remove the effects of this volume control method for one type
of provider (rural SCHs), which is only a subset of the providers
currently affected by our policy, and thus propose this exception would
not increase OPPS spending overall as compared to OPPS spending with no
volume control method whatsoever. We estimate that this exemption would
increase OPPS spending by approximately $75 million in CY 2023 compared
to spending if we did not implement this exemption to the volume
control method. The impact associated with this policy is further
described in section XXVI of this proposed rule.
XI. Proposed CY 2023 OPPS Payment Status and Comment Indicators
A. Proposed CY 2023 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 whether
particular OPPS policies apply to the code.
For CY 2023, we propose to revise the definition of status
indicator ``A'' to include unclassified drugs and biologicals that are
reportable under HCPCS code C9399. When HCPCS code C9399 appears on a
claim, the Outpatient Code Editor (OCE) suspends the claim for manual
pricing by the Medicare Administrative Contractor (MAC). The MAC prices
the claim at 95 percent of the drug or biological's average wholesale
price (AWP) using the Red Book or an equivalent recognized compendium,
and processes the claim for payment. The payment at 95 percent of AWP
is made under the OPPS.
In addition, we propose to revise the definition of status
indicator ``F'' by removing hepatitis B vaccines. Hepatitis B vaccines
should not be subject to deductible and coinsurance similar to other
preventive vaccines, but services that are currently listed under the
definition of status indicator ``F'' are subject to deductible and
coinsurance. We also propose to revise the definition of status
indicator ``L'' in order to add hepatitis B vaccines to the list of
other preventive vaccines that are not subject to deductible and
coinsurance.
The complete list of proposed CY 2023 payment status indicators and
their definitions is displayed in Addendum D1 to this proposed rule,
which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
We are requesting public comments on the proposed definitions of
the OPPS payment status indicators for 2023.
The proposed CY 2023 payment status indicator assignments for APCs
and HCPCS codes are shown in Addendum A and Addendum B, respectively,
to this proposed rule, which are available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
[[Page 44699]]
B. Proposed CY 2023 Comment Indicator Definitions
In this proposed rule, we propose to use four comment indicators
for the CY 2023 OPPS. These comment indicators, ``CH'', ``NC'', ``NI'',
and ``NP'', are in effect for CY 2022 and we propose to continue their
use in CY 2023. The proposed CY 2023 OPPS comment indicators are as
follows:
``CH''--Active HCPCS code in current and next calendar
year, status indicator and/or APC assignment has changed; or active
HCPCS code that will be discontinued at the end of the current calendar
year.
``NC''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year for which we
requested comments in the proposed rule, final APC assignment; comments
will not be accepted on the final APC assignment for the new code.
``NI''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year, interim APC
assignment; comments will be accepted on the interim APC assignment for
the new code.
``NP''--New code for the next calendar year or existing
code with substantial revision to its code descriptor in the next
calendar year, as compared to current calendar year, proposed APC
assignment; comments will be accepted on the proposed APC assignment
for the new code.
The definitions of the proposed OPPS comment indicators for CY 2023
are listed in Addendum D2 to this proposed rule, which is available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
We believe that the existing CY 2022 definitions of the OPPS
comment indicators continue to be appropriate for CY 2023. Therefore,
we propose to use those definitions without modification for CY 2023.
We are requesting public comments on our proposed definitions of
the OPPS comment indicators for 2023.
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 2022 report.
A. Proposed OPPS Payment Rates Update
The March 2022 MedPAC ``Report to the Congress: Medicare Payment
Policy,'' recommended that Congress update Medicare OPPS payment rates
by the amount specified in current law. We refer readers to the March
2022 report for a complete discussion of this recommendation.\163\ We
appreciate MedPAC's recommendation and, as discussed further in Section
II.A.4 of this proposed rule, we propose to increase the OPPS payment
rates by the amount specified in current law. Comments received from
MedPAC for other OPPS policies are discussed in the applicable sections
of this proposed rule.
---------------------------------------------------------------------------
\163\ Medicare Payment Advisory Committee. March 2022 Report to
the Congress. Chapter 3: Hospital inpatient and outpatient services,
pp.65-66. Available at: http://www.medpac.gov.
---------------------------------------------------------------------------
B. Proposed ASC Conversion Factor Update
In the March 2022 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 prior to the effects of COVID-19 PHE in CY 2020,
and ASC access to capital has been adequate.\164\ As a result, MedPAC
stated that payments to ASCs are adequate and recommended that, in the
absence of cost report data, no payment update should be applied for CY
2023 (that is, the update factor would be zero percent).
---------------------------------------------------------------------------
\164\ Medicare Payment Advisory Committee. March 2020 Report to
the Congress. Chapter 5: Ambulatory surgical center services, p.161-
162. Available at: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/mar20_entirereport_sec.pdf.
---------------------------------------------------------------------------
In the CY 2019 OPPS/ASC final rule with comment period (83 FR
59079), we adopted a policy, which we codified at 42 CFR 416.171(a)(2),
to apply the productivity-adjusted hospital market basket update to ASC
payment system rates for an interim period of 5 years. We refer readers
to the CY 2019 OPPS/ASC final rule with comment period for complete
details regarding our policy to use the productivity-adjusted hospital
market basket update for the ASC payment system for CY 2019 through CY
2023. Therefore, consistent with our policy for the ASC payment system,
as discussed in section XIII.G of this proposed rule, we propose to
apply a 2.7 percent productivity-adjusted hospital market basket update
factor to the CY 2022 ASC conversion factor for ASCs meeting the
quality reporting requirements to determine the proposed CY 2023 ASC
payment amounts. The proposed CY 2023 ASC conversion factor for ASCs
meeting quality reporting requirements and the proposed hospital market
basket update factor are discussed in section XIII of this proposed
rule.
C. Proposed ASC Cost Data
In the March 2022 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.\165\
---------------------------------------------------------------------------
\165\ Medicare Payment Advisory Committee. March 2022 Report to
the Congress. Chapter 5: Ambulatory surgical center services, p.162.
Available at: https://www.medpac.gov/wp-content/uploads/2022/03/Mar22_MedPAC_ReportToCongress_SEC.pdf.
---------------------------------------------------------------------------
While we recognize that the submission of cost data could place
additional administrative burden on most ASCs, and we are not proposing
any cost reporting requirements for ASCs in this CY 2023 OPPS/ASC
proposed rule, we continue to seek 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.
[[Page 44700]]
XIII. Proposed Updates to the Ambulatory Surgical Center (ASC) Payment
System
A. Background
1. Legislative History, Statutory Authority, and Prior Rulemaking for
the ASC Payment System
For a detailed discussion of the legislative history and statutory
authority related to payments to ASCs under Medicare, we refer readers
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through
32292). For a discussion of prior rulemaking on the ASC payment system,
we refer readers to the CYs 2012 to 2022 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, 85 FR 86121 through
86179, and 86 FR 63761 through 63815 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.
Since the implementation of the ASC prospective payment system, we
have historically defined a ``surgical'' procedure under the payment
system as any procedure described within the range of Category I CPT
codes that the CPT Editorial Panel of the American Medical Association
(AMA) defines as ``surgery'' (CPT codes 10000 through 69999) (72 FR
42478). We also have included as ``surgical'' procedures that are
described by Level II HCPCS codes or by Category III CPT codes that
directly crosswalk or are clinically similar to procedures in the CPT
surgical range.
As we noted in the August 7, 2007 ASC final rule that implemented
the revised ASC payment system, using this definition of surgery would
exclude from ASC payment certain invasive, ``surgery-like'' procedures,
such as cardiac catheterization or certain radiation treatment services
that are assigned codes outside the CPT surgical range (72 FR 42477).
We stated in that final rule that we believed continuing to rely on the
CPT definition of surgery is administratively straightforward, is
logically related to the categorization of services by physician
experts who both establish the codes and perform the procedures, and is
consistent with a policy to allow ASC payment for all outpatient
surgical procedures.
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 only 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).
However, in the CY 2022 OPPS/ASC final rule with comment period, we
finalized our proposal to reinstate the general standards and exclusion
criteria in place prior to CY 2021 (86 FR 63779) and revised the
language in the regulation text at Sec. 416.166 accordingly.
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 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 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
[[Page 44701]]
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.
B. Proposed ASC Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised HCPCS
Codes
Payment for ASC procedures, services, and items are generally based
on medical billing codes, specifically, HCPCS codes, that are reported
on ASC claims. The HCPCS is divided into two principal subsystems,
referred to as Level I and Level II of the HCPCS. Level I is comprised
of CPT (Current Procedural Terminology) codes, a numeric and
alphanumeric coding system maintained by the AMA, and includes Category
I, II, III, MAAA, and PLA CPT codes. Level II of the HCPCS, which is
maintained by CMS, is a standardized coding system that is used
primarily to identify products, supplies, and services not included in
the CPT codes. Together, Level I and II HCPCS codes are used to report
procedures, services, items, and supplies under the ASC payment system.
Specifically, we recognize the following codes on ASC claims:
Category I CPT codes, which describe surgical procedures,
diagnostic and therapeutic services, and vaccine codes;
Category III CPT codes, which describe new and emerging
technologies, services, and procedures; and
Level II HCPCS codes (also known as 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 referred to this process as
recognizing new codes. However, this process has always involved the
recognition of new and revised codes. We consider revised codes to be
new when they have substantial revision to their code descriptors that
necessitate a change in the current ASC payment indicator. To clarify,
we refer to these codes as new and revised in this proposed rule.
We have separated our discussion below based on when the codes are
released and whether we propose to solicit public comments in this
proposed rule or whether we will be soliciting public comments in the
CY 2023 OPPS/ASC final rule with comment period.
2. April 2022 HCPCS Codes for Which We Are Soliciting Public Comments
in This Proposed Rule
For the April 2022 update, there were no new CPT codes; however,
there were several new Level II HCPCS codes. In the April 2022 ASC
quarterly update (Transmittal 11303, dated March 24, 2022, CR 12679),
we added several new Level II HCPCS codes to the list of covered
ancillary services. Table 51 (New Level II HCPCS Codes for Ancillary
Services Effective April 1, 2022) lists the new Level II HCPCS codes
that were implemented April 1, 2022. The proposed comment indicators
(CI), payment indicators (PI), and payment rates for these April codes
can be found in Addendum BB to this proposed rule. The list of proposed
ASC PIs and corresponding definitions can be found in Addendum DD1 to
this proposed rule. The new codes that are effective April 1, 2022, are
assigned to comment indicator ``NP'' in Addendum BB to this proposed
rule to indicate that the codes are assigned to an interim payment
indicator assignment and that comments will be accepted on the interim
assignments. The list of comment indicators and definitions used under
the ASC payment system can be found in Addendum DD2 to this proposed
rule. We note that the following ASC addenda are available via the
internet on the CMS website:
ASC Addendum AA: Proposed ASC Covered Surgical Procedures
for CY 2023 (Including Surgical Procedures for Which Payment is
Packaged)
ASC Addendum BB: Proposed ASC Covered Ancillary Services
Integral to Covered Surgical Procedures for CY 2023 (Including
Ancillary Services for Which Payment is Packaged)
ASC Addendum DD1: Proposed ASC Payment Indicators (PI) for
CY 2023, and
ASC Addendum DD2: Proposed ASC Comment Indicators (CI) for
CY 2023
We are inviting public comments on these proposed payment
indicators for the new HCPCS codes that were recognized as ASC covered
ancillary services in April 2022 through the quarterly update CRs, as
listed in Table 51 (New Level II HCPCS Codes for Ancillary Services
Effective April 1, 2022). We propose to finalize the payment indicators
in the CY 2023 OPPS/ASC final rule with comment period.
BILLING CODE 4120-01-P
[[Page 44702]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.072
3. July 2022 HCPCS Codes for Which We Are Soliciting Public Comments in
This Proposed Rule
In the July 2022 ASC quarterly update (Transmittal 11472, Change
Request 12773, dated June 23, 2022), we added several separately
payable CPT and Level II HCPCS codes to the list of covered surgical
procedures and ancillary services. Table 52 (New Level II HCPCS Codes
for Ancillary Services Effective July 1, 2022) lists the new HCPCS
codes that are effective July 1, 2022. The proposed comment indicators,
payment indicators, and payment rates for the codes can be found in
Addendum AA and Addendum BB to this proposed rule. The list of proposed
ASC PIs and corresponding definitions can be found in Addendum DD1 to
this proposed rule. In addition, these new codes that are effective
July 1, 2022 are assigned to comment indicator ``NP'' in Addendum BB to
this proposed rule to indicate that the codes are assigned to an
interim payment indicator and that comments will be accepted on the
interim assignments. The list of comment indicators and definitions
used under the ASC payment system can be found in Addendum DD2 to this
proposed rule. We note that ASC Addenda AA, BB, DD1, and DD2 are
available via the internet on the CMS website.
[[Page 44703]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.073
BILLING CODE 4120-01-C
Furthermore, through the July 2022 quarterly update CR, we added
three new Category III CPT codes to the list of ASC covered ancillary
services, effective July 1, 2022. These codes are listed in Table 53
(New Category III CPT Codes for Covered Ancillary Services Effective
July 1, 2022). The CY 2023 proposed payment indicators, proposed
comment indicators, and proposed payment rates for these new Category
III CPT codes can be found in Addendum BB to this proposed rule. As
noted above, the list of payment indicators and comment indicators used
under the ASC can be found in Addendum DD1 and DD2, respectively, of
this proposed rule. We note that ASC Addenda AA, BB, DD1, and DD2 are
available via the internet on the CMS website.
[[Page 44704]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.074
We are inviting public comments on the proposed payment indicators
for the new CPT and Level II HCPCS codes newly recognized as ASC
covered surgical procedures for covered ancillary services effective
April 1, 2022, and July 1, 2022, through the quarterly update CRs, as
listed in Tables 51, 52, and 53. We propose to finalize the payment
indicators in the CY 2023 OPPS/ASC final rule with comment period.
4. October 2022 HCPCS Codes for Which We Will Be Soliciting Public
Comments in the CY 2023 OPPS/ASC Final Rule With Comment Period
For CY 2023, consistent with our established policy, we propose
that the Level II HCPCS codes that will be effective October 1, 2022,
would be flagged with comment indicator ``NI'' in Addendum BB in the CY
2023 OPPS/ASC final rule with comment period to indicate that we have
assigned the codes interim ASC payment indicators for CY 2023. We will
invite public comments in the CY 2023 OPPS/ASC final rule with comment
period on the interim payment indicators, which would then be finalized
in the CY 2024 OPPS/ASC final rule with comment period.
5. January 2023 HCPCS Codes
a. Level II HCPCS Codes for Which We Will Be Soliciting Public Comments
in the CY 2023 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 C and G-codes listed in Addendum O to this proposed rule, most
Level II HCPCS codes are not released until sometime around November to
be effective January 1. Because these codes are not available until
November, we are unable to include them in the OPPS/ASC proposed rules.
Therefore, these Level II HCPCS codes will be released to the public
through the CY 2023 OPPS/ASC final rule with comment period, January
2023 ASC Update CR, and the CMS HCPCS website.
In addition, for CY 2023, we will propose to continue our
established policy of assigning comment indicator ``NI'' in Addendum AA
and Addendum BB to the OPPS/ASC final rule with comment period to the
new Level II HCPCS codes that will be effective January 1, 2023, to
indicate that we are assigning them an interim payment indicator, which
is subject to public comment. We will be inviting public comments in
the CY 2023 OPPS/ASC final rule with comment period on the payment
indicator assignments, which would then be finalized in the CY 2024
OPPS/ASC final rule with comment period.
b. CPT Codes for Which We Are Soliciting Public Comments in This
Proposed Rule
For the CY 2023 ASC update, we received the CPT codes that will be
effective January 1, 2023, from the AMA in time to be included in this
proposed rule. The new, revised, and deleted CPT codes can be found in
Addendum BB to this proposed rule (which is available via the internet
on the CMS website). We note that the new and revised CPT codes are
assigned to comment indicator ``NP'' in ASC Addendum AA and Addendum BB
of this proposed rule to indicate that the code is new for the next
calendar year or the code is an existing code with substantial revision
to its code descriptor in the next calendar year as compared to the
current calendar year with a proposed payment indicator assignment. We
will accept comments and finalize the payment indicators in the CY 2023
OPPS/ASC final rule with comment period. Further, we remind readers
that the CPT code descriptors that appear in Addendum AA and Addendum
BB are short descriptors and do not describe the complete procedure,
service, or item described by the CPT code. Therefore, we include the
5-digit placeholder codes and their long descriptors for the new CY
2023 CPT codes in Addendum O to this proposed rule so that the public
can comment on our proposed payment indicator assignments. The 5-digit
placeholder codes can be found in Addendum O to this proposed rule,
specifically under the column labeled ``CY 2023 OPPS/ASC Proposed Rule
5-Digit Placeholder Code.'' We intend to include the final CPT code
numbers the CY 2023 OPPS/ASC final rule with comment period.
In summary, we are soliciting public comments on the proposed CY
2023 payment indicators for the new Category I and III CPT codes that
will be effective January 1, 2023. Because these codes are listed in
Addendum AA and Addendum BB with short descriptors only, we are listing
them again in Addendum O with the long descriptors. We also propose to
finalize the payment indicator for these codes (with their final CPT
code numbers) in the CY 2023 OPPS/ASC final rule with comment period.
The codes, along with their proposed payment indicators, and proposed
comment indicators, are listed in ASC Addendum AA and BB. The
definitions for the proposed payment indicators and comment indicators
can be found in ASC Addendum DD1 and DD2, respectively. All the ASC
proposed rule payment files, including ASC Addenda
[[Page 44705]]
AA, BB, DD1, and DD2, are available via the internet on the CMS
website.
Finally, in Table 54, 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.
[GRAPHIC] [TIFF OMITTED] TP26JY22.075
C. Proposed Update to the List of ASC Covered Surgical Procedures and
Covered Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
(1) Background
In the August 2, 2007 ASC final rule, we finalized our policy to
designate as ``office-based'' those procedures that are added to the
ASC Covered Procedures List (CPL) in CY 2008 or later years that we
determine are furnished predominantly (more than 50 percent of the
time) in physicians' offices based on consideration of the most recent
available volume and utilization data for each individual procedure
code and/or, if appropriate, the clinical characteristics, utilization,
and volume of related codes. In that rule, we also finalized our policy
to exempt all procedures on the CY 2007 ASC list from application of
the office-based classification (72 FR 42512). The procedures that were
added to the ASC CPL beginning in CY 2008 that we determined were
office-based were identified in Addendum AA to that rule 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.
(2) Proposed Changes for CY 2023 to Covered Surgical Procedures
Designated as Office-Based
In developing this CY 2023 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
[[Page 44706]]
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 2021 claims) and the
clinical characteristics for all covered surgical procedures that are
currently assigned a payment indicator in CY 2022 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 2022 OPPS/ASC final
rule with comment period (86 FR 63769 through 63773).
In our CY 2022 OPPS/ASC final rule with comment period (86 FR
63770), we discussed that we, historically, review the most recent
claims volume and utilization data and clinical characteristics for all
covered surgical procedures that were assigned a payment indicator of
``G2'' for CY 2021. For the CY 2022 OPPS/ASC final rule with comment
period, the most recent claims volume and utilization data was CY 2020
claims. However, given our concerns with the use of CY 2020 claims data
as a result of the COVID-19 PHE as further discussed in the CY 2022
OPPS/ASC final rule with comment period (86 FR 63751 through 63754), we
adopted a policy to not review CY 2020 claims data and did not assign
permanent office-based designations to covered surgical procedures that
were assigned a payment indicator of ``G2'' in CY 2021 (86 FR 63770
through 63771).
As discussed further in section X.B of this proposed rule, in our
review of the CY 2021 outpatient claims available for ratesetting for
this CY 2023 OPPS proposed rule, we observed that many outpatient
service volumes have partially returned to their pre-PHE levels and it
is reasonable to assume that there will continue to be some effects of
the COVID-19 PHE on the outpatient claims that we use for OPPS
ratesetting. As a result, we propose to use the CY 2021 claims for CY
2023 OPPS ratesetting. Similarly, for this proposed rule, we propose to
resume our historical practice and review the most recent claims and
utilization data, in this case data from CY 2021 claims, for
determining office-based assignments under the ASC payment system.
Our review of the CY 2021 volume and utilization data of covered
surgical procedures 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) resulted in the identification
of 6 surgical procedures that we believe meet the criteria for
designation as permanently office-based. The data indicate that these
procedures are performed more than 50 percent of the time in
physicians' offices, and we believe that the services are of a level of
complexity consistent with other procedures performed routinely in
physicians' offices. The CPT codes that we propose to permanently
designate as office-based for CY 2023 are listed in Table 55.
[GRAPHIC] [TIFF OMITTED] TP26JY22.076
[[Page 44707]]
We also reviewed CY 2021 volume and utilization data for 8 surgical
procedures designated as temporarily office-based in the CY 2022 OPPS/
ASC final rule with comment period and temporarily assigned one of the
office-based payment indicators, specifically ``P2,'' ``P3'' or ``R2''
as shown in Table 56. For all 8 surgical procedures, there were fewer
than 50 claims or no claims in our data. Therefore, we propose to
continue to designate these procedures, shown in Table 56, as
temporarily office-based for CY 2023. The procedures for which the
proposed office-based designation for CY 2023 is temporary are
indicated by an asterisk in Addendum AA to this proposed rule (which is
available via the internet on the CMS website).
[GRAPHIC] [TIFF OMITTED] TP26JY22.077
BILLING CODE 4120-01-C
As discussed in the August 2, 2007 ASC 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
[[Page 44708]]
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 2023,
there are no new CY 2023 CPT codes for ASC covered surgical procedures
that have been temporarily assigned office-based.
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) Proposed Changes to List of ASC Covered Surgical Procedures
Designated as Device-Intensive for CY 2023
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59040
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. The device offset percentage is the percentage
of device costs within a procedure's total costs. 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).
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63773
through 63775), we modified our approach to assigning device-intensive
status to surgical procedures under the ASC payment system. First, we
adopted a policy of assigning 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. Second, we adopted a policy 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. The policies were adopted to
provide consistency between the OPPS and ASC payment system and provide
a more appropriate payment rate for surgical procedures with
significant device costs under the ASC payment system.
As discussed in more detail in section XIII.D.1.c of this proposed
rule, we propose to create a special payment policy under the ASC
payment system whereby we would add 52 new C codes to the ASC CPL to
provide a special payment for code combinations eligible for complexity
adjustments under the OPPS. These code combinations reflect separately
payable primary procedures on the ASC CPL as well as add-on procedures
that are packaged with an ASC payment indicator of ``N1'' (Packaged
service/item; no separate payment made.). Under our proposal, the C
code would retain the device-intensive status of the primary procedure
as well as the device portion (or device offset amount) of the primary
procedure and not the device offset percentage. The device offset
percentage for a C code would be established by dividing the device
portion of the primary procedure by the OPPS complexity-adjusted APC
payment rate based on the ASC standard ratesetting methodology.
Although this may yield results where the device offset percentage is
not greater than 30 percent of the OPPS complexity-adjusted APC payment
rate, we believe this is an appropriate methodology to apply where
primary procedures assigned device-intensive status are a component of
a C code.
Based on our existing criteria as well as our proposal to add to
the ASC CPL new C codes that reflect code combinations eligible for
complexity adjustments under the OPPS, for CY 2023, we propose to
update the ASC CPL to indicate procedures that are eligible for payment
according to our device-intensive procedure payment methodology. For CY
2023, where CY 2021 claims data are available, the device-intensive
payment methodology relies on the proposed device-offset percentages of
each device-intensive procedure using the CY 2021 OPPS claims and cost
report data available for this proposed rule.
The ASC covered surgical procedures that we propose to designate as
device-intensive, and therefore subject to the device-intensive
procedure payment methodology for CY 2023, are assigned
[[Page 44709]]
payment indicator ``J8'' and are included in ASC Addendum AA to this
proposed rule (which is available via the internet on the CMS website).
The CPT code, the CPT code short descriptor, the proposed CY 2023 ASC
payment rate are also included in Addendum AA to this proposed rule
(which is available via the internet on the CMS website). We are
soliciting public comments on our proposal to assign device-intensive
status to 11 of the new C codes that we propose to add to the ASC CPL
as well as our methodology for determining the device portion for such
procedures.
c. Proposed 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 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.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59043
through 59044) 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 are not proposing any changes to our policies related to no/cost
full credit or partial credit devices for CY 2023.
[[Page 44710]]
d. Proposed 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 covered surgical
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.
Under our regulations at Sec. Sec. 416.2 and 416.166, covered
surgical procedures furnished on or after January 1, 2022, are surgical
procedures that meet the general standards specified in Sec.
416.166(b) and are not excluded under the general exclusion criteria
specified in Sec. 416.166(c). Specifically, under Sec. 416.166(b),
the general standards provide that 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.
Section 416.166(c) sets 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 provide 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 detailed discussion of the history of our policies for adding
surgical procedures to the ASC CPL, we refer readers to the CY 2021 and
CY 2022 OPPS/ASC final rules with comment period (85 FR 86143 through
86145; 86 FR 63777 through 63805).
1. Proposed Changes to the List of ASC Covered Surgical Procedures for
CY 2023
Our current policy, which includes 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, is
intended to ensure that surgical procedures added to the ASC CPL can be
performed safely in the ASC setting on the typical Medicare
beneficiary. For CY 2023, we conducted a review of procedures that
currently are paid under the OPPS and not included on the ASC CPL. We
also assessed procedures against our regulatory safety criteria at
Sec. 416.166. Based upon this review, we propose to update the ASC CPL
by adding one lymphatic procedure to the list for CY 2023, as shown in
Table 57 below.
After reviewing the clinical characteristics of this procedure, as
well as consulting with stakeholders and multiple clinical advisors, we
determined that this procedure is separately paid under the OPPS, would
not be expected to pose a significant risk to beneficiary safety when
performed in an ASC, and would not be expected to require active
medical monitoring and care of the beneficiary at midnight following
the procedure. This procedure does not result in extensive blood loss,
require major or prolonged invasion of body cavities, or directly
involve major blood vessels. We believe this procedure may be
appropriately performed in an ASC on a typical Medicare beneficiary.
Therefore, we propose to include this procedure on the ASC CPL for CY
2023.
[GRAPHIC] [TIFF OMITTED] TP26JY22.125
We continue to focus on maximizing patient access to care by adding
procedures to the ASC CPL when appropriate. While expanding the ASC CPL
offers benefits, such as preserving the capacity of hospitals to treat
more acute patients and promoting site neutrality, we also believe that
any additions to the CPL should be added in a carefully calibrated
fashion to ensure that the procedure is safe to be performed in the ASC
setting for a typical Medicare beneficiary. We expect to continue to
gradually expand the ASC CPL, as medical practice and technology
continue to evolve and advance in future years. We encourage
stakeholders to submit procedure recommendations to be added to the ASC
CPL, particularly if there is evidence that these procedures meet our
criteria and can be safely performed on the typical Medicare
beneficiary in the ASC setting.
Proposed Name Change and Start Date of Nominations Process
In the CY 2022 OPPS/ASC final rule with comment period, we
finalized our proposal to add a nominations process for adding surgical
procedures to the ASC CPL at Sec. 416.166(d), (86 FR 63782) which we
titled ``Nominations.'' As we have discussed in previous rulemaking,
this process is simply an opportunity outside of the existing public
comment period process for interested parties to submit recommendations
before the proposed rule period so CMS can consider the suggestions as
we develop the proposed rule. We believe this process enhances
transparency and allows interested parties an additional opportunity to
provide input for the ASC CPL.
However, the nominations process is not the only way for interested
parties to make recommendations to CMS for adding surgical procedures
to the ASC CPL. We emphasize that interested parties have been able,
and may
[[Page 44711]]
continue, to suggest surgical procedures they believe should be added
to the ASC CPL during the public comment period following the proposed
rule. That process remains unchanged. When interested parties submit
procedure recommendations for the ASC CPL through the public comment
process, CMS will consider them for the final rule with comment period.
We understand, however, that the terminology we used in the CY 2022
OPPS/ASC final rule with comment period and codified at Sec.
416.166(d)--``Nominations''--may have led to some confusion that this
process is the primary or only pathway for interested parties to
suggest procedures to be added to the ASC CPL. Therefore, we propose to
change the name of the process finalized last year in the CY 2022 OPPS/
ASC final rule with comment period from ``Nominations'' to the ``Pre-
Proposed Rule CPL Recommendation Process.'' Where the current name of
the process may suggest a formality or limitation that we did not
intend--one that implies the nominations process is the preferred,
primary, or only means by which interested parties may submit
recommendations--we believe this proposed new name would not.
In addition, we are currently working on developing the
technological infrastructure and Paperwork Reduction Act (PRA) package
for the recommendations process. Because we were unable to complete the
infrastructure development and PRA processes (which have taken longer
than we originally anticipated when we finalized the policy) in time
for commenters to recommend procedures to be added to the ASC CPL prior
to the CY 2023 proposed rule, we propose to revise the start date of
the recommendation process in the regulatory text. We propose to change
January 1, 2023, to January 1, 2024, so that the text at Sec.
416.166(d) would specify that on or after January 1, 2024, an external
party may recommend a surgical procedure by March 1 of a calendar year
for the list of ASC covered surgical procedures for the following
calendar year. We continue to welcome all procedure submissions through
the public comment process, as we have in previous years.
2. Covered Ancillary Services
In the CY 2019 OPPS/ASC final rule with comment period (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 OPPS and to continue this reconciliation of packaged
status for subsequent calendar years. As discussed in prior rulemaking,
maintaining consistency with the OPPS may result in changes to ASC
payment indicators for some covered ancillary services. For example, if
a covered ancillary service was separately paid under the ASC payment
system in CY 2022, but will be packaged under the CY 2023 OPPS, we
would also package the ancillary service under the ASC payment system
for CY 2023 to maintain consistency with the OPPS. Comment indicator
``CH'', which is discussed in section XIII.G of this proposed rule, is
used in Addendum BB (which is available via the internet on the CMS
website) to indicate covered ancillary services for which we propose a
change in the ASC payment indicator to reflect a proposed change in the
OPPS treatment of the service for CY 2023.
In the CY 2022 OPPS/ASC final rule with comment period, we
finalized 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 (86 FR 63490).
New CPT and HCPCS codes for covered ancillary services for CY 2023
can be found in section XIII.B of this proposed rule. All ASC covered
ancillary services and their proposed payment indicators for CY 2023
are also included in Addendum BB to this proposed rule (which is
available via the internet on the CMS website).
D. Proposed Update and Payment for ASC Covered Surgical Procedures and
Covered Ancillary Services
1. Proposed ASC Payment for Covered Surgical Procedures
a. Background
Our ASC payment policies for covered surgical procedures under the
revised ASC payment system are 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 have retained
payment indicator ``A2'' because it is used to identify procedures that
are exempted from the application of the office-based designation.
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. As detailed in section
XIII.C.1.a of this proposed rule, we update the payment amounts for
office-based procedures (payment indicators ``P2'', ``P3'', and ``R2'')
using the most recent available MPFS and OPPS data. We compare the
estimated current year 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 current year payment rate for the
procedure under our final policy for the revised ASC payment system
(Sec. 416.171(d)).
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. We update the payment
rates for device-intensive procedures to incorporate the most recent
device offset percentages calculated under the ASC standard ratesetting
methodology, as discussed in section XIII.C.1.b of this proposed rule.
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
[[Page 44712]]
removal procedures are conditionally packaged and, therefore, would be
packaged under the ASC payment system. There is 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 have
continued to provide separate payment since CY 2014 and assign the
current ASC payment indicators associated with these procedures.
b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2023
We propose to update ASC payment rates for CY 2023 and subsequent
years using the established rate calculation methodologies under Sec.
416.171 and using our definition of device-intensive procedures, as
discussed in section XII.C.1.b of this proposed rule. As the proposed
OPPS relative payment weights are generally based on geometric mean
costs, we propose that the ASC payment system will generally use the
geometric mean cost to determine proposed relative payment weights
under the ASC standard methodology. We propose to continue to use the
amount calculated under the ASC standard ratesetting methodology for
procedures assigned payment indicators ``A2'' and ``G2''.
We propose to calculate payment rates for office-based procedures
(payment indicators ``P2'', ``P3'', and ``R2'') and device-intensive
procedures (payment indicator ``J8'') according to our established
policies and to identify device-intensive procedures, using the
methodology discussed in section XII.C.1.b of this proposed rule.
Therefore, we propose to update the payment amount for the service
portion (the non-device 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 2023 device offset
percentages that have been calculated using the standard OPPS APC
ratesetting methodology. We propose that payment for office-based
procedures would be at the lesser of the proposed CY 2023 MPFS
nonfacility PE RVU-based amount or the proposed CY 2023 ASC payment
amount calculated according to the ASC standard ratesetting
methodology.
As we did for CYs 2014 through 2022, for CY 2023, we propose to
continue our policy for device removal procedures, such that device
removal procedures that are conditionally packaged in the OPPS (status
indicators ``Q1'' and ``Q2'') will be assigned the current ASC payment
indicators associated with those procedures and will continue to be
paid separately under the ASC payment system.
c. Proposed ASC Payment for Combinations of Primary and Add-On
Procedures Eligible for Complexity Adjustments Under the OPPS
In this section we propose a policy to provide increased payment
under the ASC payment system for combinations of certain ``J1'' service
codes and add-on procedure codes that are eligible for a complexity
adjustment under the OPPS.
OPPS C-APC Complexity Adjustment Policy
Under the OPPS, complexity adjustments are utilized to provide
increased payment for certain comprehensive services. As discussed in
section II.b.1 of this proposed rule, we apply a complexity adjustment
by promoting qualifying paired ``J1'' service code combinations or
paired code combinations of ``J1'' services and add-on codes from the
originating Comprehensive APC (C-APC) (the C-APC to which the
designated primary service is first assigned) to the next higher paying
C-APC in the same clinical family of C-APCs. A ``J1'' status indicator
refers to a hospital outpatient service paid through a C-APC. We
package payment for all add-on codes, which are codes that describe a
procedure or service always performed in addition to a primary service
or procedure, into the payment for the C-APC. However, certain
combinations of primary service codes and add-on codes may qualify for
a complexity adjustment.
We apply complexity adjustments when the paired code combination
represents a complex, costly form or version of the primary service
when the frequency and cost thresholds are met. The frequency threshold
is met when there are 25 or more claims reporting the code combination,
and the cost threshold is met when there is a violation of the 2 times
rule, as specified in section 1833(t)(2) of the Act and described in
section III.A.2.b of this proposed rule, in the originating C-APC.
These paired code combinations that meet the frequency and cost
threshold criteria represent those that exhibit materially greater
resource requirements than the primary service. 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 that are either assigned to status indicator ``J1'' or add-on
codes to determine if there are paired code combinations that meet the
complexity adjustment criteria. Once we have determined that a
particular combination of ``J1'' services, or combinations of a ``J1''
service and add-on code, 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 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
C-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).
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 the primary service code
reported with the add-on code 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).
Proposed ASC Special Payment Policy for OPPS Complexity-Adjusted C-APCs
Comprehensive APCs cannot be adopted in the ASC payment system due
to limitations of the ASC claims processing systems. Thus, we do not
use the OPPS comprehensive services ratesetting methodology in the ASC
payment system. Under the standard ratesetting methodology used for the
ASC payment system, comprehensive ``J1'' claims that exist under the
OPPS
[[Page 44713]]
are treated the same as other claims that contain separately payable
procedure codes. As comprehensive APCs do not exist under the ASC
payment system, there is not a process similar to the OPPS complexity
adjustment policy in the ASC payment system to provide higher payment
for more complex code combinations. In the ASC payment system, when
multiple procedures are performed together in a single operative
session, most covered surgical procedures are subject to a 50-percent
reduction for the lower-paying procedure (72 FR 66830). This multiple
procedure reduction gives providers additional payment when they
perform multiple procedures during the same session, while still
encouraging providers to provide necessary services as efficiently as
possible. Add-on procedure codes are not separately payable under the
ASC payment system and are always packaged into the ASC payment rate
for the procedure. Unlike the multiple procedure discounting process
used for other surgical procedures in the ASC payment system, providers
do not receive any additional payment when they perform a primary
service with an add-on code in the ASC payment system.
In previous rulemaking, we have received suggestions from
commenters requesting that we explore ways to increase payment to ASCs
when services corresponding to add-on codes are performed with
procedures, as certain code combinations may represent increased
procedure complexity or resource intensity when performed together. For
example, in the CY 2022 OPPS/ASC final rule with comment period, one
commenter suggested that we modify the device-intensive criteria to
allow packaged procedures that trigger a complexity adjustment under
the OPPS to be eligible for device-intensive status under the ASC
payment system (86 FR 63775). Based on our internal data review and
assessment at that time, our response to that comment noted that we did
not believe any changes were warranted to our packaging policies under
the ASC payment system but that we would consider it in future
rulemaking.
For this CY 2023 rulemaking, we evaluated the differences in
payment in the OPPS and ASC settings for code pairs that included a
primary procedure and add-on codes that were eligible for complexity
adjustments under the OPPS and also performed in the ASC setting. Under
the ASC payment system, we identified 26 packaged procedures (payment
indicator = ``N1'') that combine with 42 primary procedures, which
would be C-APCs (status indicator = ``J1'') under the OPPS, to produce
52 different complexity adjustment code combinations. We generally
estimate that ASC services were paid approximately 55 percent of the
OPPS rate for similar services in CY 2021. When we compared the OPPS
complexity-adjusted payment rate of these primary procedure and add-on
code combinations to the ASC payment rate for the same code
combinations, we found that the average rate of ASC payment as a
percent of OPPS payment for these code combinations was 25 to 35
percent, which is significantly lower than 55 percent.
We recognize that this payment differential between the C-APC-
assigned code combinations eligible for complexity adjustments under
the OPPS and the same code combinations under the ASC payment system
could potentially create financial disincentives for providers to offer
these services in the ASC setting, which could potentially result in
Medicare beneficiaries encountering difficulties accessing these
combinations of services in ASC settings. As noted above, our current
policy does not include additional payment for services corresponding
to add-on codes, unlike our payment policy for multiple surgical
procedures performed together, for which we provide additional payment
under the multiple procedure reduction. However, these primary
procedure and add-on code combinations that would be eligible for a
complexity adjustment under the OPPS still represent more complex and
costly versions of the service, and we believe that providers not
receiving additional payment under the ASC payment system to compensate
for that increased complexity could lead to providers not being able to
provide these services in the ASC setting which could result in
barriers to beneficiary access.
In order to address this issue, we propose a new ASC payment policy
that would apply to certain code combinations in the ASC payment system
where CMS would pay for those code combinations at a higher payment
rate to reflect that the code combination is a more complex and
costlier version of the procedure performed, similar to the way in
which the OPPS APC complexity adjustment is applied to certain paired
code combinations that exhibit materially greater resource requirements
than the primary service. We propose to add new Sec. 416.172(h) to
codify this policy.
We propose that combinations of a primary procedure code and add-on
codes that are eligible for a complexity adjustment under the OPPS (as
listed in OPPS Addendum J) would be eligible for this proposed payment
policy in the ASC setting. Specifically, we propose that the ASC
payment system code combinations eligible for additional payment under
this proposed policy would consist of a separately payable surgical
procedure code and one or more packaged add-on codes from the ASC
Covered Procedures List (CPL) and ancillary services list. Add-on codes
are assigned payment indicator ``N1'' (Packaged service/item; no
separate payment made), as listed in the ASC addenda.
Regarding eligibility for this special payment policy, we propose
that we would assign each eligible code combination a new C code that
describes the primary and the add-on procedure(s) performed. C codes
are unique temporary codes and are only valid for claims for HOPD and
ASC services and procedures. Under our proposal, we would add these C
codes to the ASC CPL and the ancillary services list, and when ASCs
bill this C code, they would receive a higher payment rate that
reflects that the code combination is a more complex and costlier
version of the procedure performed. We anticipate that the C codes
eligible for this proposed payment policy would change slightly each
year, as the complexity adjustment assignments change under the OPPS
and we expect we would add new C codes each year accordingly. We
propose 52 such new C codes to add to the ASC CPL. These proposed C
codes for CY 2023 can be found in the ASC addenda. We propose to add
new Sec. 416.172(h)(1), titled Eligibility, to codify this policy.
We propose the following payment methodology for this proposed
policy, which we would reflect in new Sec. 416.172(h)(2), titled
Calculation of Payment. We propose that the C codes would be subject to
all ASC payment policies, including the standard ASC payment system
ratesetting methodology, meaning, they would be treated the same way as
other procedure codes in the ASC setting. For example, the multiple
procedure discounting rules would apply to the primary procedure in
cases where the services corresponding to the C code are performed with
another separately payable covered surgical procedure in the ASC
setting. We propose to use the OPPS complexity-adjusted C-APC rate to
determine the ASC payment rate for qualifying code combinations,
similar to how we use OPPS APC relative weights in the standard ASC
payment system ratesetting methodology. Under the ASC
[[Page 44714]]
payment system, we use the OPPS APC relative payment weights to update
the ASC relative payment weights for covered surgical procedures since
ASCs do not submit cost reports. We then scale those ASC relative
weights for the ASC payment system to ensure budget neutrality. To
calculate the ASC payment rates for most ASC covered surgical
procedures, we multiply the ASC conversion factor by the ASC relative
payment weight. A more detailed discussion of this methodology is
provided in the in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66828 through 66831).
For this proposal, we propose to use the OPPS complexity-adjusted
C-APC rate for each corresponding code combination to calculate the
OPPS relative weight for each corresponding ASC payment system C code,
which we believe would appropriately reflect the complexity and
resource intensity of these ASC procedures being performed together.
For C codes that are not assigned device-intensive status (discussed
below), we would multiply the OPPS relative weight by the ASC budget
neutrality adjustment (or ASC weight scalar) to determine the ASC
relative weight. We would then multiply the ASC relative weight by the
ASC conversion factor to determine the ASC payment rate for each C
code. In short, we would apply the standard ASC ratesetting process to
the C codes. We propose to add new Sec. 416.172(h)(2)(i) to codify
this policy.
As discussed in section XIII.C.1.b of this proposed rule, certain C
codes under our proposed policy may include a primary procedure that
also qualifies for device-intensive status under the ASC payment
system. For primary procedures assigned device-intensive status and
that are a component of a C code created under this proposal, we
believe it would be appropriate for the C code to retain the device-
intensive status of the primary procedure as well as the device portion
(or device offset amount) of the primary procedure and not the device
offset percentage. For example, if the primary procedure had a device
offset percentage of 31 percent (a proposed device offset percentage of
greater than 30 percent would be needed to qualify for device-intensive
status) and a device portion (or device offset amount) of $3,000, C
codes that included this primary procedure would be assigned device-
intensive status and a device portion of $3,000 to be held constant
with the OPPS. We would apply our standard ASC payment system
ratesetting methodology to the non-device portion of the OPPS
complexity-adjusted APC rate of the C codes; that is, we would apply
the ASC budget neutrality adjustment and ASC conversion factor. We
believe assigning device-intensive status and transferring the device
portion from the primary procedure's ASC payment rate to the C code's
ASC payment rate calculation is consistent with our treatment of device
costs and determining device-intensive status under the ASC payment
system and is an appropriate methodology for determining the ASC
payment rate. The non-device portion would be the difference between
the device portion of the primary procedure and the OPPS complexity-
adjusted APC payment rate for the C code based on the ASC standard
ratesetting methodology. Although this may yield results where the
device offset percentage is not greater than 30 percent of the OPPS
complexity-adjusted APC payment rate, we believe this is an appropriate
methodology to apply where primary procedures assigned device-intensive
status are a component of a C code. As is the case for all device-
intensive procedures, we would apply the ASC standard ratesetting
methodology to the OPPS relative weights of the non-device portion for
any C code eligible for payment under this proposal. That is, we would
multiply the OPPS relative weight by the ASC budget neutrality
adjustment and the ASC conversion factor and sum that amount with the
device portion to calculate the ASC payment rate. We propose to add new
Sec. 416.172(h)(2)(ii) to codify this policy.
In order to include these C codes in the budget neutrality
calculations for the ASC payment system, we propose to estimate the
potential utilization for these C codes. We do not have claims data for
packaged codes in the ASC setting because ASCs do not report packaged
codes under the ASC payment system. Therefore, we propose to estimate
CY 2023 ASC utilization based upon how often these combinations are
performed in the HOPD setting. Specifically, we would use the ratio of
the primary procedure volume to add-on procedure volume from CY 2021
OPPS claims and apply that ratio against ASC primary procedure
utilization to estimate the increased spending as a result of our
proposal for budget neutrality purposes. We believe this method would
provide a reasonable estimate of the utilization of these code
combinations in the ASC setting, as it is based on the specific code
combination utilization in the OPPS. We anticipate that we would
continue this estimation process until we have sufficient claims data
for the C codes that can be used to more accurately calculate code
combination utilization in ASCs, likely for the CY 2025 rulemaking.
We welcome comments on this proposal, including comments or
suggestions regarding additional approaches that we should consider for
this policy.
d. Proposed Low Volume APCs and Limit on ASC Payment Rates for
Procedures Assigned to Low Volume APCs
As stated in section XIII.D.1.b of this proposed rule, the ASC
payment system generally uses OPPS geometric mean costs under the
standard methodology to determine proposed relative payment weights
under the standard ASC ratesetting methodology.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63743
through 63747), we adopted a universal Low Volume APC policy for CY
2022 and subsequent calendar years. Under our policy, we expanded the
low volume adjustment policy that is applied to procedures assigned to
New Technology APCs to also apply 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 or
services assigned to a Low Volume APC, we use up to 4 years of claims
data to establish a payment rate for the APC 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.
Based on claims data available for this proposed rule, we propose
to designate 4 brachytherapy APCs and 4 clinical APCs as Low Volume
APCs under the ASC payment system. The 4 clinical APCs and 4
brachytherapy APCs shown in Table 58 meet our criteria of having fewer
than 100 single claims in the claims year (CY 2021 for this proposed
rule) and therefore, we propose that they would be subject to our
universal Low Volume APC policy and the APC cost metric would be based
on the greater of the median cost, arithmetic mean cost, or geometric
mean cost using up to 4 years of claims data. These 8 APCs were
designated as Low Volume APCs in CY 2022; however, as we noted under
the comprehensive ratesetting methodology section, APC 2647
(Brachytherapy, non-stranded, Gold-198), which was previously
designated as a Low Volume APC for CY 2022, did
[[Page 44715]]
not meet our claims threshold for this proposed rule.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP26JY22.078
BILLING CODE 4120-01-C
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 the
payment is packaged when it is provided with a significant procedure
but is separately paid when the service appears on the claim without a
significant procedure. Because ASC services always include a surgical
procedure, HCPCS codes that are conditionally packaged under the OPPS
are generally packaged (payment indictor ``N1'') under the ASC payment
system (except for device removal procedures, as discussed in the CY
2022 OPPS/ASC proposed rule (86 FR 42083)). 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 the CY
2022 OPPS/ASC final rule with comment period, for CY 2022, we finalized
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 Sec. 416.174 (86 FR 63483).
[[Page 44716]]
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.
b. Proposed Payment for Covered Ancillary Services for CY 2023
We propose to update the ASC payment rates and to make changes to
ASC payment indicators, as necessary, to maintain consistency between
the OPPS and ASC payment system regarding the packaged or separately
payable status of services and the proposed CY 2023 OPPS and ASC
payment rates and subsequent years' payment rates. We also propose to
continue to set the CY 2023 ASC payment rates and subsequent years'
payment rates for brachytherapy sources and separately payable drugs
and biologicals equal to the OPPS payment rates for CY 2023 and
subsequent years' payment rates.
Covered ancillary services and their proposed payment indicators
for CY 2023 are listed in Addendum BB of this proposed rule (which is
available via the internet on the CMS website). For those covered
ancillary services where the payment rate is the lower of the rate
under the ASC standard rate setting methodology and the PFS proposed
rates (similar to our office-based payment policy), the proposed
payment indicators and rates set forth in this proposed rule are based
on a comparison using the proposed PFS rates effective January 1, 2023.
For a discussion of the PFS rates, we refer readers to the CY 2023 PFS
proposed rule, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. Proposal in Physician Fee Schedule Proposed Rule To Require HOPDs
and ASCs To Report Discarded Amounts of Certain Single-Dose or Single-
Use Package Drugs
Section 90004 of the Infrastructure Investment and Jobs Act (Pub.
L. 117-9, November 15, 2021) (``the Infrastructure Act'') amended
section 1847A of the Act to re-designate subsection (h) as subsection
(i) and insert a new subsection (h), which requires manufacturers to
provide a refund to CMS for certain discarded amounts from a refundable
single-dose container or single-use package drug. Section III.A. of the
CY 2023 Physician Fee Schedule (PFS) proposed rule includes proposals
to implement section 90004 of the Infrastructure Act, including a
proposal that HOPDs and ASCs would be required to report the JW
modifier or any successor modifier to identify discarded amounts of
refundable single-dose container or single-use package drugs that are
separately payable under the OPPS or ASC payment system. Specifically,
we propose in the CY 2023 PFS proposed rule that the JW modifier would
be used to determine the total number of billing units of the HCPCS
code (that is, the identifiable quantity associated with a HCPCS code,
as established by CMS) of a refundable single-dose container or
[[Page 44717]]
single-use package drug, if any, that were discarded for dates of
service during a relevant quarter for the purpose of calculating the
refund amount described in section 1847A(h)(3) of the Act. The CY 2023
PFS proposed rule also proposes to require HOPDs and ASCs to use a
separate modifier, JZ, in cases where no billing units of such drugs
were discarded and for which the JW modifier would be required if there
were discarded amounts.
Because the CY 2023 PFS proposed rule proposes to codify certain
billing requirements for HOPDs and ASCs, we want to ensure interested
parties are aware of them and know to refer to that rule for a full
description of the proposed policy. Interested parties should submit
comments on this and any other proposals to implement Section 90004 of
the Infrastructure Act in response to the CY 2023 PFS proposed rule.
Public comments on these proposals will be addressed in the CY 2023 PFS
final rule. We note that this same notice appears in section V.A.C. of
this proposed rule.
E. 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
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 a detailed discussion of rulemaking on non-opioid alternatives
prior to CY 2020, we refer readers to the CYs 2018 and 2019 OPPS/ASC
final rules with comment period (82 FR 59345; 83 FR 58855 through
58860).
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. For the CY 2020 OPPS/ASC proposed rule (84
FR 39423 through 39427), we proposed to continue our policy to pay
separately at ASP plus 6 percent for non-opioid pain management drugs
that function as surgical supplies in the performance of surgical
procedures when they are furnished in the ASC setting and to continue
to package payment for non-opioid pain management drugs that function
as surgical supplies in the performance of surgical procedures in the
hospital outpatient department setting.
In the CY 2020 OPPS/ASC final rule with comment period (84 FR 61173
through 61180), after reviewing data from stakeholders and Medicare
claims data, we did not find compelling evidence to suggest that
revisions to our OPPS payment policies for non-opioid pain management
alternatives were necessary for CY 2020. We finalized our proposal to
continue to unpackage and pay separately at ASP plus 6 percent for non-
opioid pain management drugs that function as surgical supplies when
furnished in the ASC setting for CY 2020. Under this policy, for CY
2020, the only drug that qualified for separate payment in the ASC
setting as a non-opioid pain management drug that functions as a
surgical supply was Exparel.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 85896
to 85899), we continued the policy to pay separately at ASP plus 6
percent for non-opioid pain management drugs that function as surgical
supplies in the performance of surgical procedures when they were
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 Exparel and Omidria
met the criteria as non-opioid pain management drugs that function as
surgical supplies in the ASC setting, and received separate payment
under the ASC payment system.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63483), we finalized a policy to unpackage and pay separately at ASP
plus 6 percent for non-opioid pain management drugs that function as
surgical supplies when they are furnished in the ASC setting, 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, and we finalized our proposed regulation text changes at 42
CFR 416.164(a)(4) and (b)(6), Sec. 416.171(b)(1), and Sec. 416.174 as
proposed. We determined that four products were eligible for separate
payment in the ASC setting under our final policy for CY 2022. We noted
that future products, or products not discussed in that rulemaking that
may be eligible for separate payment under this policy would be
evaluated in future rulemaking (86 FR 63496). Table 59 lists the four
drugs that met our finalized criteria established in CY 2022 and
received separate payment under the ASC payment system when furnished
in the ASC setting for CY 2022 as described in the CY 2022 final rule
with comment period (86 FR 63496).
[[Page 44718]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.079
2. Eligibility Criteria Technical Clarification and Proposed Regulation
Text Changes Regarding Pass-Through Status and Separately Payable
Status
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63489), we finalized a policy that non-opioid pain management drugs and
biologicals that function as supplies in surgical procedures that are
already paid separately, including through transitional drug pass-
through status under the OPPS, are not eligible for payment under Sec.
416.174. As we previously noted in the CY 2022 OPPS/ASC final rule with
comment period, once transitional pass-through payment status expires,
a drug or biological may qualify for separate payment under the ASC
payment system if it meets the eligibility criteria at Sec. 416.174
(86 FR 63489). OPPS pass-through status expires on a quarterly basis.
Therefore, for products for which pass-through status has expired that
qualify for separate payment under the ASC payment system as non-opioid
pain management drugs and biologicals that function as surgical
supplies, separate payment may begin the first day of the next calendar
year quarter following pass-through expiration. For example, a drug
with expiring pass-through status on June 30, 2024, may begin to
receive separate payment in the ASC setting on July 1, 2024, under this
proposed policy, if it meets the other relevant criteria and such
separate payment is finalized in the applicable year's OPPS/ASC
rulemaking.
Although we established this policy in the CY 2022 OPPS/ASC final
rule with comment period (86 FR 63489), we did not reflect it in
regulation text. We propose now to clarify our policy by codifying the
two additional criteria for separate payment for non-opioid pain
management drugs and biologicals that function as surgical supplies in
the regulatory text at Sec. 416.174 as a technical change. First, we
propose to provide at new Sec. 416.174(a)(3) that non-opioid pain
management drugs or biologicals that function as a supply in a surgical
procedure are eligible for separate payment if the drug or biological
does not have transitional pass-through payment status under Sec.
419.64. In the case where a drug or biological otherwise meets the
requirements under Sec. 416.174 and has transitional pass-through
payment status that will expire during the calendar year, the drug or
biological would qualify for separate payment under Sec. 416.174
during such calendar year on the first day of the next calendar year
quarter after its pass-through status expires. Second, we propose that
new Sec. 416.174(a)(4) would reflect that the drug or biological must
not already be separately payable in the OPPS or ASC payment system
under a policy other than the one specified in Sec. 416.174.
3. Proposed CY 2023 Qualification Evaluation for Separate Payment of
Non-Opioid Pain Management Drugs and Biologicals That Function as a
Surgical Supply
As noted above, in the CY 2022 OPPS/ASC final rule with comment
period, we finalized a policy to unpackage and pay separately at ASP
plus 6 percent for non-opioid pain management drugs that function as
surgical supplies when they are furnished in the ASC setting, are FDA-
approved, have an FDA-approved indication for pain management or as an
analgesic, and have a per-day cost above the OPPS drug packaging
threshold beginning on or after January 1, 2022. For CY 2023, the OPPS
drug packaging threshold is proposed to be $135. For more information
on the drug packaging threshold, see section V.B.1.a of this proposed
rule.
The following sections include the non-opioid alternatives of which
we are aware and our evaluations of whether these non-opioid
alternatives meet the criteria established at Sec. 416.174. We welcome
stakeholder comment on these evaluations.
a. Proposed Annual Eligibility Re-Evaluations of Non-Opioid
Alternatives That Were Separately Paid in the ASC Setting During CY
2022
In the CY 2022 final rule with comment period, we finalized that
four drugs would receive separate payment in the ASC setting for CY
2022 under
[[Page 44719]]
the policy for non-opioid pain management drugs and biologicals that
function as surgical supplies (86 FR 63496). These drugs are described
by HCPCS code C9290 (Injection, bupivacaine liposome, 1 mg), HCPCS code
J1097 (Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml ophthalmic
irrigation solution, 1 ml), HCPCS code C9088 (Instillation, bupivacaine
and meloxicam, 1 mg/0.03 mg), and HCPCS code C9089 (Bupivacaine,
collagen-matrix implant, 1 mg).
We re-evaluated these products outlined in the previous paragraph
against the criteria specified in Sec. 416.174, including the
technical clarifications we propose to that section, to determine
whether they continue to qualify for separate payment in CY 2023. Based
on our evaluation, we propose that the drugs described by HCPCS codes
C9290, J1097, and C9089 continue to meet the required criteria and
should receive separate payment in the ASC setting. We propose that the
drug described by HCPCS code C9088 would not receive separate payment
in the ASC setting under this policy as this drug will be separately
payable during CY 2023 under OPPS transitional pass-through status.
Please see section V.A, ``OPPS Transitional Pass-Through Payment for
Additional Costs of Drugs, Biologicals, and Radiopharmaceuticals'' of
this proposed rule for additional details on the pass-through status of
HCPCS code C9088.
We welcome comment on our evaluations below.
(a) Proposed Eligibility Evaluation for the Separate Payment of Exparel
Based on our internal review, we believe that Exparel, described by
HCPCS code C9290 (Injection, bupivacaine liposome, 1 mg), meets the
criteria described at Sec. 416.174, including the technical
clarifications we propose to that section, and we propose to continue
making separate payment for it under the ASC payment system for CY
2023. Exparel was approved by FDA with a New Drug Application (NDA
#022496) under section 505(c) of the Federal Food, Drug, and Cosmetic
Act on October 28, 2011.\166\ Exparel's FDA-approved indication is ``in
patients 6 years of age and older for single-dose infiltration to
produce postsurgical local analgesia'' and ``in adults as an
interscalene brachial plexus nerve block to produce postsurgical
regional analgesia''.\167\ No component of Exparel is opioid-based.
Accordingly, we propose that Exparel meets the criterion described at
Sec. 416.174(a)(1). Under the methodology described at V.B.1.a. of
this proposed rule, the per-day cost of Exparel exceeds the proposed
$135 per-day cost threshold. Therefore, we propose that Exparel meets
the criterion described at Sec. 416.174(a)(2). Additionally, Exparel
will not have transitional pass-through payment status under Sec.
419.64 in CY 2023, nor will it be otherwise separately payable in the
OPPS or ASC payment system in CY 2023 under a policy other than the one
specified in Sec. 416.174. Therefore, we propose that Exparel meets
the criteria we propose to add to the regulation text at Sec. Sec.
416.174(a)(3) and (4).
---------------------------------------------------------------------------
\166\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
\167\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
---------------------------------------------------------------------------
Based on the above discussion, we believe that Exparel meets the
criteria described at Sec. 416.174 and we propose to continue making
separate payment for it as a non-opioid pain management drug that
functions as a supply in a surgical procedure under the ASC payment
system for CY 2023.
(b) Proposed Eligibility Evaluation for the Separate Payment of Omidria
Based on our internal review, we believe that Omidria, described by
HCPCS code J1097 (Phenylephrine 10.16 mg/ml and ketorolac 2.88 mg/ml
ophthalmic irrigation solution, 1 ml), meets the criteria described at
Sec. 416.174(a), and we propose to continue making separate payment
for it under the ASC payment system for CY 2023. Omidria was approved
by FDA with a New Drug Application (NDA #205388) under section 505(c)
of the Federal Food, Drug, and Cosmetic Act on May 30, 2014.\168\
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''.\169\ No component of Omidria is opioid-
based. Accordingly, we propose that Omidria meets the criterion
described at Sec. 416.174(a)(1). Under the methodology described at
V.B.1.a of this proposed rule, the per-day cost of Omidria exceeds the
proposed $135 per-day cost threshold. Therefore, we propose that
Omidria meets the criterion described at Sec. 416.174(a)(2).
Additionally, we believe that Omidria will not have transitional pass-
through payment status under Sec. 419.64 in CY 2023, nor will it be
otherwise separately payable in the OPPS or ASC payment system in CY
2023 under a policy other than the one specified in Sec. 416.174.
Therefore, we propose that if Omidria meets the criteria we propose to
add to the regulation text at Sec. Sec. 416.174(a)(3) and (4).
---------------------------------------------------------------------------
\168\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
\169\ Omidria. FDA Package Insert. December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
---------------------------------------------------------------------------
Based on the above discussion, we propose that Omidria meets the
criteria described at Sec. 416.174 and should receive separate payment
as a non-opioid pain management drug that functions as a supply in a
surgical procedure under the ASC payment system for CY 2023.
(c) Proposed Eligibility Evaluation for the Separate Payment of
Xaracoll
Based on our internal review, we believe Xaracoll, described by
C9089 (Bupivacaine, collagen-matrix implant, 1 mg), meets the criteria
described at Sec. 416.174(a), and we propose to continue making
separate payment for it under the ASC payment system for CY 2023.
Xaracoll was approved by FDA with a New Drug Application (NDA # 209511)
under section 505(c) of the Federal Food, Drug, and Cosmetic Act on
August 28, 2020.\170\ 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''.\171\ No component of
Xaracoll is opioid-based. Accordingly, we propose that Xaracoll meets
the criterion described at Sec. 416.174(a)(1). Under the methodology
described at V.B.1.a. of this proposed rule, the per-day cost of
Xaracoll exceeds the proposed $135 per-day cost threshold. Therefore,
we propose that Xaracoll meets the criterion described at Sec.
416.174(a)(2). Additionally, at this time we do not believe that
Xaracoll will have transitional pass-through payment status under Sec.
419.64 in CY 2023, nor do we believe it will otherwise be separately
payable in the OPPS or ASC payment system under a policy other than the
one specified in Sec. 416.174. Therefore, we propose that if Xaracoll
meets the criteria we propose to add to the regulation text at
Sec. Sec. 416.174(a)(3) and (4).
---------------------------------------------------------------------------
\170\ Xaracoll. FDA Letter. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/209511Orig1s000ltr.pdf.
\171\ Xaracoll. FDA Labeling. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
---------------------------------------------------------------------------
Based on the above discussion, we propose that Xaracoll meets the
criteria
[[Page 44720]]
described at Sec. 416.174 and should receive separate payment as a
non-opioid pain management drug that functions as a supply in a
surgical procedure under the ASC payment system for CY 2023.
(d) Proposed Eligibility Evaluation for the Separate Payment of
Zynrelef
Zynrelef, the drug described by HCPCS code C9088 (Instillation,
bupivacaine and meloxicam, 1 mg/0.03 mg), received drug pass-through
payment status as of April 1, 2022. As discussed above, our policy, as
finalized in the CY 2022 OPPS/ASC final rule with comment period (86 FR
63489), states 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 systems. Also discussed
above, we propose to include this requirement as a technical change in
new regulation text at Sec. 416.174(a)(3). Zynrelef receives separate
payment consistent with its drug pass-through approval and we have
proposed in section V.A of this proposed rule that its pass-through
status will not expire until after CY 2023. Accordingly, we propose
that Zynrelef would not be eligible for separate payment under the ASC
payment system policy for non-opioid pain management drugs and
biologicals that function as surgical supplies in CY 2023. Please see
section V.A, ``OPPS Transitional Pass-Through Payment for Additional
Costs of Drugs, Biologicals, and Radiopharmaceuticals'' of this
proposed rule for additional details on transitional drug pass-through
payments.
b. Proposed Evaluations of Newly Eligible Non-Opioid Alternatives
In this section, we evaluate drugs or biologicals, of which we are
aware, that we believe may be newly eligible for separate payment in
the ASC setting as a non-opioid pain management drug that functions as
a surgical supply against the criteria described at Sec. 416.174(a).
We evaluated whether Dextenza, described by HCPCS code J1096
(Dexamethasone, lacrimal ophthalmic insert, 0.1 mg), a drug with pass-
through status expiring December 31, 2022, meets the criteria specified
in Sec. 416.174, including the technical clarifications we propose to
that section. We propose that Dextenza receive separate payment in the
ASC setting as a non-opioid pain management drug that functions as a
surgical supply for CY 2023. We welcome stakeholder comment on this
evaluation.
(a) Proposed Eligibility Evaluation for the Separate Payment of
Dextenza
Based on our internal review, we believe Dextenza, described by
HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic insert, 0.1 mg),
meets the criteria described at Sec. 416.174 and we propose to provide
separate payment for it under the ASC payment system for CY 2023.
Dextenza was approved by FDA with a New Drug Application (NDA # 208742)
under section 505(c) of the Federal Food, Drug, and Cosmetic Act on
November 30, 2018.\172\ Dextenza's FDA-approved indication is as ``a
corticosteroid indicated for the treatment of ocular pain following
ophthalmic surgery'' and ``the treatment of ocular itching associated
with allergic conjunctivitis''.\173\ No component of Dextenza is
opioid-based. Accordingly, we believe Dextenza meets the criterion
described at Sec. 416.174(a)(1). Under the methodology described at
V.B.1.a. of this proposed rule, the per-day cost of Dextenza exceeds
the proposed $135 per-day OPPS drug packaging cost threshold, so
Dextenza also meets the criterion described at Sec. 416.174(a)(2).
Additionally, Dextenza's pass-through status expires on December 31,
2022, and we do not believe that it will otherwise be separately
payable in the OPPS or ASC payment system under a policy other than the
one specified in Sec. 416.174. Therefore, we propose that if Dextenza
meets the criteria we propose to add to the regulation text at
Sec. Sec. 416.174(a)(3) and (4).
---------------------------------------------------------------------------
\172\ * Dextenza. FDA Letter. November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Approv.pdf.
\173\ Dextenza. FDA Labeling. October 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf.
---------------------------------------------------------------------------
Based on the above discussion, we propose that Dextenza meets the
criteria described at Sec. 416.174 and should receive separate payment
as a non-opioid pain management drug that functions as a supply in a
surgical procedure under the ASC payment system for CY 2023.
Table 60 below lists the four drugs that we propose to meet the
criteria described at Sec. 416.174 to receive separate payment as a
non-opioid pain management drug that functions as a supply in a
surgical procedure under the ASC payment system for CY 2023.
[[Page 44721]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.080
4. Comment Solicitation Payment Policies for Separate Payment for
Additional Drugs and Biologicals and Other Products That Function as
Supplies in Surgical Procedures for CY 2023
We are soliciting comment on additional non-opioid pain management
drugs and biologicals that function as surgical supplies that may meet
the criteria specified in Sec. 416.174 and therefore qualify for
separate payment under the ASC payment system. We encourage commenters
to include an explanation of how the drug or biological meets the
eligibility criteria in Sec. 416.174, including the technical
clarifications we propose to that section. In the CY 2023 OPPS/ASC
final rule with comment period, we will include a summary of comments
we receive and our analysis of whether these products meet the
eligibility criteria in Sec. 416.174. If we find these additional
drugs or biologicals do satisfy the criteria established at Sec.
416.174, we will finalize their separate payment status for CY 2023 in
the ASC setting in the CY 2023 OPPS/ASC final rule with comment period.
We are also seeking comment on potential policy modifications and
additional criteria that may help further align the ASC payment system
policy for non-opioid pain management drugs and biologicals that
function as surgical supplies with the intent of sections 1833(t)(22)
and 1833(i)(8) of the Act. We also seek comment on non-drug or non-
biological products that should qualify for separate, or modified,
payment under this authority and any data regarding any such products.
In addition, we solicit comments on barriers to access to non-opioid
pain management products that may exist, and how our payment policies
could be modified to address these barriers. We are also interested in
comments and data regarding the need to expand the current ASC payment
system policy for non-opioid pain management drugs and biologicals that
function as surgical supplies to the OPPS, which is discussed in
section XIII.E.3 of this proposed rule.
We will take comments into consideration for potential future
changes to this policy.
F. Proposed New Technology Intraocular Lenses (NTIOLs)
New Technology Intraocular Lenses (NTIOLs) are intraocular lenses
that replace a patient's natural lens that has been removed in cataract
surgery and that also meet the requirements listed in Sec. 416.195.
1. NTIOL Application Cycle
Our process for reviewing applications to establish new classes of
NTIOLs is as follows:
Applicants submit their NTIOL requests for review to CMS
by the annual deadline. For a request to be considered complete, we
require submission of the information requested in the guidance
document 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
[[Page 44722]]
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 2023
We did not receive any requests for review to establish a new NTIOL
class for CY 2023 by March 1, 2022, the due date published in the CY
2022 OPPS/ASC final rule with comment period (86 FR 63809).
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 do not propose to revise the payment adjustment amount for CY 2023.
G. Proposed 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 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 with comment period 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. Proposed ASC Payment and Comment Indicators for CY 2023
For CY 2023, we propose new and revised Category I and III CPT
codes as well as new and revised Level II HCPCS codes. Proposed
Category I and III CPT codes that are new and revised for CY 2023 and
any new and existing Level II HCPCS codes with substantial revisions to
the code descriptors for CY 2023, compared to the CY 2022 descriptors,
are included in ASC Addenda AA and BB to this proposed rule and labeled
with proposed comment indicator ``NP'' to indicate that these CPT and
Level II HCPCS codes are open for comment as part of the CY 2023 OPPS/
ASC proposed rule.
We refer readers to Addenda DD1 and DD2 of this 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 2023 update.
H. Proposed 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
[[Page 44723]]
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 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 XIII.D.2 of this proposed rule), and certain diagnostic tests
within the medicine range that are covered ancillary services, the
established policy is to set the payment rate at the lower of the MPFS
unadjusted nonfacility PE RVU-based amount or the amount calculated
using the ASC standard ratesetting methodology. Further, as discussed
in the CY 2008 OPPS/ASC final rule with comment period (72 FR 66841
through 66843), we also adopted alternative ratesetting methodologies
for specific types of services (for example, device-intensive
procedures).
As discussed in the August 2, 2007 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. 18-03 may be
obtained at https://www.whitehouse.gov/wp-content/uploads/2018/04/OMB-BULLETIN-NO.-18-03-Final.pdf. A copy of OMB Bulletin No. 18-04 may be
obtained at https://www.whitehouse.gov/wpcontent/uploads/2018/90/Bulletin-18-04.pdf.
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. (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).
The proposed CY 2023 ASC wage indexes fully reflect the OMB labor
market area delineations (including the revisions to the OMB labor
market delineations discussed above, as set forth in OMB Bulletin Nos.
13-01, 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. 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 2023, we are applying
[[Page 44724]]
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 apply
our current policy of calculating an urban or rural area's wage index
by calculating the average of the wage indexes for CBSAs (or
metropolitan divisions where applicable) that are contiguous to the
area with no wage index.
2. Calculation of the ASC Payment Rates
a. Updating the ASC Relative Payment Weights for CY 2023 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 this proposed rule, we are
using the CY 2021 claims data to be consistent with the OPPS claims
data for this proposed rule. Consistent with our established policy, we
propose to scale the CY 2023 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 2021, we
propose to compare the total payment using the CY 2022 ASC relative
payment weights with the total payment using the CY 2023 ASC relative
payment weights to take into account the changes in the OPPS relative
payment weights between CY 2022 and CY 2023. Additionally, in light of
our proposal to provide a higher ASC payment rate through the use of
new C codes for 52 primary procedures when performed with add-on
packaged services, CY 2023 total payments will include spending and
utilization related to these new C codes. For this proposed rule, we
estimate the additional CY 2023 spending to be $5 million.
We propose to use the ratio of CY 2022 to CY 2023 total payments
(the weight scalar) to scale the ASC relative payment weights for CY
2023. The proposed CY 2023 ASC weight scalar is 0.8474. 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. We propose to use the CY 2021 claims data to model our
budget neutrality adjustment.
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 2023, we calculated the proposed adjustment for the ASC payment
system by using the most recent CY 2021 claims data available and
estimating the difference in total payment that would be created by
introducing the proposed CY 2023 ASC wage indexes. Specifically,
holding CY 2021 ASC utilization, service-mix, and the proposed CY 2023
national payment rates after application of the weight scalar constant,
we calculated the total adjusted payment using the CY 2022 ASC wage
indexes and the total adjusted payment using the proposed CY 2023 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 2022 ASC wage indexes to the total
adjusted payment calculated with the proposed CY 2023 ASC wage indexes
and applied the resulting ratio of 1.0010 (the proposed CY 2023 ASC
wage index budget neutrality adjustment) to the CY 2022 ASC conversion
factor to calculate the proposed CY 2023 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
[[Page 44725]]
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
would 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 intended 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 2023 is projected
to be 2.7 percent, as published in the FY 2023 IPPS/LTCH PPS proposed
rule (86 FR 25435), based on IHS Global Inc.'s (IGI's) 2021 fourth
quarter forecast with historical data through the third quarter of
2021.
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 2023 was projected to be 0.4
percentage point, as published in the FY 2023 IPPS/LTCH PPS proposed
rule (86 FR 25435) based on IGI's 2021 fourth quarter forecast.
For CY 2023, we propose to utilize the hospital market basket
update of 3.1 percent reduced by the productivity adjustment of 0.4
percentage point, resulting in a productivity-adjusted hospital market
basket update factor of 2.7 percent for ASCs meeting the quality
reporting requirements. Therefore, we propose to apply a 2.7 percent
productivity-adjusted hospital market basket update factor to the CY
2022 ASC conversion factor for ASCs meeting the quality reporting
requirements to determine the CY 2023 ASC payment amounts. The ASCQR
Program affected payment rates beginning in CY 2014 and, under this
program, there is a 2.0 percentage point reduction to the update factor
for ASCs that fail to meet the ASCQR Program requirements. We refer
readers to section XIV.E. of the CY 2019 OPPS/ASC final rule with
comment period (83 FR 59138 through 59139) and section XIV.E of this
proposed rule for a detailed discussion of our policies regarding
payment reduction for ASCs that fail to meet ASCQR Program
requirements. We propose to utilize the hospital market basket update
of 3.1 percent reduced by 2.0 percentage points for ASCs that do not
meet the quality reporting requirements and then reduced by the 0.4
percentage point productivity adjustment. Therefore, we proposed to
apply a 0.7 percent productivity-adjusted hospital market basket update
factor to the CY 2022 ASC conversion factor for ASCs not meeting the
quality reporting requirements. We also propose that if more recent
data are subsequently available (for example, a more recent estimate of
the hospital market basket update or productivity adjustment), we would
use such data, if appropriate, to determine the CY 2023 ASC update for
the final rule.
For CY 2023, we propose to adjust the CY 2022 ASC conversion factor
($49.916) by the proposed wage index budget neutrality factor of 1.0010
in addition to the productivity-adjusted hospital market basket update
of 2.7 percent discussed above, which results in a proposed CY 2023 ASC
conversion factor of $51.315 for ASCs meeting the quality reporting
requirements. For ASCs not meeting the quality reporting requirements,
we propose to adjust the CY 2022 ASC conversion factor ($49.916) by the
proposed wage index budget neutrality factor of 1.0010 in addition to
the quality reporting/productivity-adjusted hospital market basket
update of 0.7 percent discussed above, which results in a proposed CY
2023 ASC conversion factor of $50.315.
We request comments on our proposals for updating the CY 2023 ASC
conversion factor.
3. Display of the Proposed CY 2023 ASC Payment Rates
Addenda AA and BB to this proposed rule (which are available on the
CMS website) display the proposed ASC payment rates for CY 2023 for
covered surgical procedures and covered ancillary services,
respectively. The proposed payment rates included in Addenda AA and BB
to this proposed rule reflect the full ASC proposed payment update and
not the reduced payment update used to calculate payment rates for ASCs
not meeting the quality reporting requirements under the ASCQR Program.
These Addenda contain several types of information related to the
proposed CY 2023 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.
For CY 2021, we finalized adding a new column to ASC Addendum BB
titled ``Drug Pass-Through Expiration during Calendar Year'' where we
flag through the use of an asterisk each drug for which pass-through
payment is expiring during the calendar year (that is, on a date other
than December 31st).
The values displayed in the column titled ``Proposed CY 2023
Payment Weight'' are the proposed relative payment weights for each of
the listed services for CY 2023. The proposed relative payment weights
for all covered surgical procedures and covered ancillary services
where the ASC payment rates are based on OPPS relative payment weights
were scaled for budget neutrality. Therefore, scaling was not applied
to the device portion of the device-intensive procedures; services that
are paid at the MPFS nonfacility PE RVU-based amount; separately
payable covered ancillary services that have a predetermined national
payment amount, such as drugs and biologicals and brachytherapy
[[Page 44726]]
sources that are separately paid under the OPPS; or services that are
contractor-priced or paid at reasonable cost in ASCs. This includes
separate payment for non-opioid pain management drugs.
To derive the proposed CY 2023 payment rate displayed in the
``Proposed CY 2023 Payment Rate'' column, each ASC payment weight in
the ``Proposed CY 2023 Payment Weight'' column was multiplied by the
proposed CY 2023 conversion factor. The conversion factor includes a
budget neutrality adjustment for changes in the wage index values and
the annual update factor as reduced by the productivity adjustment. The
proposed CY 2023 ASC conversion factor uses the CY 2023 productivity-
adjusted hospital market basket update factor of 2.7 percent (which is
equal to the projected hospital market basket update of 3.1 percent
reduced by a projected productivity adjustment of 0.4 percentage
point).
In Addendum BB, there are no relative payment weights displayed in
the ``Proposed CY 2023 Payment Weight'' column for items and services
with predetermined national payment amounts, such as separately payable
drugs and biologicals. The ``Proposed CY 2023 Payment'' column displays
the proposed CY 2023 national unadjusted ASC payment rates for all
items and services. The proposed CY 2023 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 2021.
Addendum EE provides the HCPCS codes and short descriptors for
surgical procedures that are proposed to be excluded from payment in
ASCs for CY 2023. Addendum FF displays the device offset percentages
calculated under the standard ASC ratesetting methodology for covered
surgical procedures in CY 2023.
Addendum FF to this proposed rule 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 2023
for covered surgical procedures.
XIV. Requirements for the Hospital Outpatient Quality Reporting (OQR)
Program
A. Background
1. Overview
We seek to promote higher quality, more efficient, and equitable
healthcare for Medicare beneficiaries. Consistent with these goals, we
have 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 (75 FR 72064
through 72065) for a detailed discussion of the statutory history of
the Hospital OQR Program. 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.
3. Regulatory History of the Hospital OQR Program
We refer readers to the CYs 2008 through 2022 OPPS/ASC final rules
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);
The CY 2021 OPPS/ASC final rule (85 FR 86179 through
86187); and
The CY 2022 OPPS/ASC final rule (86 FR 63822 through
63875).
We have codified certain requirements under the Hospital OQR
Program at 42 CFR[thinsp]419.46. We refer readers to section XX.X of
this proposed rule for a detailed discussion of the payment reduction
for hospitals that fail to meet Hospital OQR Program requirements for
the CY 2025 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 (76 FR 74458
through 74460) for a detailed discussion of the priorities we consider
for the Hospital OQR Program quality measure selection. We are not
proposing any changes to these policies in this proposed rule.
2. Retention of Hospital OQR Program Measures Adopted in Previous
Payment Determinations
We previously finalized and codified at 42 CFR 419.46(h)(1) a
policy to retain measures from the previous year's measure set for
subsequent years, unless removed (77 FR 68471 and 83 FR 59082). We are
not proposing any changes to these policies in this proposed rule.
3. Removal of Quality Measures From the Hospital OQR Program Measure
Set
a. Immediate Removal or Suspension
We previously finalized and codified at 42 CFR 419.46(i)(2) and (3)
a process for removal or suspension of a Hospital OQR Program measure,
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).\174\ We are not proposing any changes to these
policies in this proposed rule.
---------------------------------------------------------------------------
\174\ We refer readers to the CY 2013 OPPS/ASC final rule (77 FR
68472 and 68473) for a discussion of our reasons for changing the
term ``retirement'' to ``removal'' in the Hospital OQR Program.
---------------------------------------------------------------------------
b. Consideration Factors for Removing Measures
We previously finalized and codified at 42 CFR 419.46(i)(3)
policies to use the regular rulemaking process to remove a measure for
circumstances other than when CMS believes that continued use of a
measure raises specific patient safety concerns (74 FR 60635 and 83 FR
59082).\175\ We are not proposing any changes to these policies in this
proposed rule.
---------------------------------------------------------------------------
\175\ 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.
---------------------------------------------------------------------------
[[Page 44727]]
4. Modifications to Previously Adopted Measures
a. Proposal To Change the Cataracts: Improvement in Patient's Visual
Function Within 90 Days Following Cataract Surgery (OP-31) Measure From
Mandatory to Voluntary Beginning With the CY 2027 Payment Determination
(1) Background
The OP-31 measure was adopted in the CY 2014 OPPS/ASC final rule
(78 FR 75102 and 75103). During CY 2014 OPPS/ASC rulemaking, 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 our implementation strategy in
a manner that we believed would significantly minimize collection and
reporting burden by applying a sampling scheme and a low case threshold
exemption to address commenters' concerns regarding burden (78 FR 75113
through 75115). 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 on accuracy, feasibility, or reporting
burden. Therefore, we issued guidance \176\ stating that we would delay
the implementation of OP-31, and we subsequently finalized in the CY
2015 OPPS/ASC final rule (79 FR 66947) the exclusion of OP-31 from the
measure set while allowing hospitals to voluntarily report measure data
beginning with the CY 2015 reporting period.
---------------------------------------------------------------------------
\176\ See Letter from Craig Bryant to Hospital OQR initiative
discussions re: Outpatient Quality Reporting (OQR) Program--Delay of
New Measures (Dec. 31, 2013), available at https://qualitynet.cms.gov/files/5d3792e74b6d1a256059d87d?filename=2013-40-OP.pdf; see also Letter from Craig Bryant to Hospital OQR initiative
discussions re: Delayed Implementation of OP-31: Cataracts--
Improvement in Patient's Visual Function within 90 Days Following
Cataract Surgery Measure (NQF #1536) to January 1, 2015; Data
Collection Period for Two Endoscopy Measures OP-29 and OP-30 Begins
(April 2, 2014), available at https://qualitynet.cms.gov/files/5d3793174b6d1a256059d8e3?filename=2014-14-OP,0.pdf.
---------------------------------------------------------------------------
(2) Considerations Concerning Previously Finalized OP-31 Measure
Requirements Beginning With the CY 2025 Reporting Period/CY 2027
Payment Determination
In the CY 2022 OPPS/ASC proposed rule (86 FR 42247), we stated that
it would be appropriate to require that hospitals report on OP-31 for
the CY 2023 reporting period/CY 2025 payment determination as 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. Many
commenters expressed concern about making this measure mandatory due to
the burden of reporting the measure and the impact this additional
burden would have during the COVID-19 pandemic, stating that OP-31 has
not been mandatory and many facilities have not been practicing
reporting it (86 FR 63845). In response to these comments, in the CY
2022 OPPS/ASC final rule with comment period, we finalized a delay in
the implementation of this measure with mandatory reporting beginning
with the CY 2025 reporting period/CY 2027 payment determination (86 FR
63845 through 63846).
Since the publication of the CY 2022 OPPS/ASC final rule with
comment period, interested parties have expressed concern about the
reporting burden of this measure given the ongoing COVID-19 public
health emergency (PHE). Interested parties have indicated that they are
still recovering from the COVID-19 PHE and that the requirement to
report OP-31 would be burdensome due to national staffing and medical
supply shortages coupled with unprecedented changes in patient case
volumes. Due to the continued impact of the COVID-19 PHE, such as
national staffing and medical supply shortages, the 2-year delay of
mandatory reporting for this measure is no longer sufficient. Based on
these factors and the feedback we received from interested parties, we
believe it is appropriate to change OP-31 from mandatory to voluntary
beginning with the CY 2025 reporting period/CY 2027 payment
determination. A hospital would not be subject to a payment reduction
for failing to report this measure during the voluntary reporting
period; however, we strongly encourage hospitals to gain experience
with the measure. We plan to continue to evaluate this policy moving
forward. To be clear, there are no changes to reporting for the CY 2023
and CY 2024, during which the measure would remain voluntary.
As the OP-31 measure uniquely requires cross-setting coordination
among clinicians of different specialties (that is, surgeons and
opthalmologists), we believe it appropriate to defer mandatory
reporting at this time. We will consider mandatory reporting of OP-31
after the national PHE declaration officially ends and we find it
appropriate to do so given COVID-19 PHE impacts on national staffing
and supply shortages. We intend to consider implementation of mandatory
reporting of the OP-31 measure through future rulemaking because as we
noted in the CY 2015 OPPS/ASC final rule, this measure addresses an
area of care that is not adequately addressed in our current measure
set and the measure serves to drive the coordination of care (79 FR
66947). We subsequently stated in the CY 2022 OPPS/ASC final rule with
comment period 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 these data have done so consistently (86 FR 63845).
We invite public comment on this proposal.
5. Previously Finalized and Proposed Hospital OQR Program Measure Sets
a. Previously Finalized Hospital OQR Program Measure Set for the CY
2024 Payment Determination
We refer readers to the CY 2022 OPPS/ASC final rule (85 FR 63846
through 63850) for a summary of the previously adopted Hospital OQR
Program measure set for the CY 2024 payment determination and
subsequent years. Table 61 summarizes the previously finalized Hospital
OQR Program measure set for the CY 2024 payment determination:
BILLING CODE 4120-01-P
[[Page 44728]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.081
b. Summary of Proposed Hospital OQR Program Measure Set for the CY 2025
Payment Determination
Table 62 summarizes the Hospital OQR Program measure set including
our proposal in this proposed rule for the CY 2025 payment
determination:
[[Page 44729]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.082
c. Summary of Proposed Hospital OQR Program Measure Set for the CY 2026
Payment Determination and Subsequent Years
Table 63 summarizes the proposed Hospital OQR Program measure set
for the CY 2026 payment determination and subsequent years:
[[Page 44730]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.083
BILLING CODE 4120-01-C
6. Hospital OQR Program Measures and Topics for Future Considerations
a. Request for Comment on Reimplementation of Hospital Outpatient
Volume on Selected Outpatient Surgical Procedures (OP-26) Measure or
Adoption of Another Volume Indicator
(1) Background
Hospital care has been gradually shifting from inpatient to
outpatient settings, and since 1983, inpatient stays per capita have
fallen by 31 percent.\177\ In line with this trend, outpatient services
increased by 0.7 percent in 2019 while inpatient services decreased by
0.9 percent. \178\ Research indicates that volume in hospital
outpatient departments will continue to grow, with some estimates
projecting a 19 percent increase in patients between 2019 and
2029.\179\
---------------------------------------------------------------------------
\177\ Medicare Payment Advisory Commission. March 2021 Report to
the Congress: Medicare Payment Policy. Chapter 3. Available at:
https://www.medpac.gov/wp-content/uploads/2021/10/mar21_medpac_report_ch3_sec.pdf.
\178\ Medicare Payment Advisory Commission. March 2021 Report to
the Congress: Medicare Payment Policy. Available at: https://www.medpac.gov/document/march-2021-report-to-the-congress-medicare-payment-policy/.
\179\ Sg2. Sg2 Impact of Change Forecast Predicts Enormous
Disruption in Health Care Provider Landscape by 2029. June 4, 2021.
Available at: https://www.sg2.com/media-center/press-releases/sg2-impact-forecast-predicts-disruption-health-care-provider-landscape-2029/.
---------------------------------------------------------------------------
Volume has a long history as a quality metric, however, quality
measurement efforts moved away from procedure volume as it was
considered simply a proxy for quality rather than directly measuring
outcomes.\180\ While studies suggest that larger facility surgical
procedure volume does not alone lead to better outcomes, it may be
associated with better outcomes due to having characteristics that
improve care (for example, high-volume facilities may have teams that
work more effectively together, or have superior systems or programs
for identifying and responding to complications), making volume an
important component of quality.\181\ The
[[Page 44731]]
Hospital OQR Program does not currently include a quality measure for
facility-level volume data, including surgical procedure volume data,
but did so previously. We refer readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74466 through 74468) where we adopted
the Hospital Outpatient Volume on Selected Outpatient Surgical
Procedures measure (OP-26) beginning with the CY 2012 reporting period/
CY 2014 payment determination. This structural measure of facility
capacity collected surgical procedure volume data on eight categories
of procedures frequently performed in the hospital outpatient setting:
Cardiovascular, Eye, Gastrointestinal, Genitourinary, Musculoskeletal,
Nervous System, Respiratory, and Skin (76 FR 74466). We adopted OP-26
based on evidence that the volume of surgical procedures, and
particularly of high-risk surgical procedures, is related to better
patient outcomes, including decreased medical errors and mortality (76
FR 74466).182 183 184 This may be attributable to greater
experience or surgical skill, greater comfort with and, hence,
likelihood of application of standardized best practices, and increased
experience in monitoring and management of surgical patients for the
particular procedure. We further stated our belief that publicly
reporting volume data would provide patients with beneficial
information to use when selecting a care provider (76 FR 74467).
---------------------------------------------------------------------------
\180\ Jha AK. Back to the Future: Volume as a Quality Metric.
JAMA Forum Archive. Published online June 10, 2015.
\181\ Auerbach AD et al. The Relationship between Case-Volume,
Care Quality, and Outcomes of Complex Cancer Surgery. Journal of the
American College of Surgery. 2010;211(5):601-608. doi:10.1016/
j.jamcollsurg.2010.07.006.
\182\ Livingston, E.H.; Cao, J ``Procedure Volume as a Predictor
of Surgical Outcomes''. Edward H. Livingston, Jing Cao JAMA.
2010;304(1):95-97.
\183\ David R. Flum, D.R.; Salem, L.; Elrod, J.B.; Dellinger,
E.P.; Cheadle, A. Chan, L. ``Early Mortality Among Medicare
Beneficiaries Undergoing Bariatric Surgical Procedures''. JAMA.
2005;294(15):1903-1908.
\184\ Schrag, D; Cramer, L.D.; Bach, P.B.; Cohen, A.M.; Warren,
J.L.; Begg, C.B '' Influence of Hospital Procedure Volume on
Outcomes Following Surgery for Colon Cancer'' JAMA. 2000; 284 (23):
3028- 3035.
---------------------------------------------------------------------------
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59429), we removed OP-26, stating that there is a lack of evidence to
support this specific measure's link to improved clinical quality.
Although there is evidence of a link between patient volume and better
patient outcomes, we stated that we believed that there was a lack of
evidence that this link was reflected in the OP-26 measure
specifically. Based on this belief, we removed the OP-26 measure under
the following measure removal criterion: performance or improvement on
a measure does not result in better patient outcomes. At the time, many
commenters supported the proposal to remove the OP-26 measure (82 FR
59429).
We are considering reimplementing the OP-26 measure or another
volume measure because the shift from the inpatient to outpatient
setting has placed greater importance on tracking the volume of
outpatient procedures.
Over the past few decades, innovations in the health care system
have driven the migration of procedures from the inpatient setting to
the outpatient setting. Forty-five percent of percutaneous coronary
intervention (PCI) procedures shifted from the inpatient to outpatient
setting from 2004 to 2014, and more than 70 percent of patients who
undergo thoracoscopic surgery can be discharged on the day of the
surgery itself due to the use of innovative techniques and technologies
available in the outpatient setting. 185 186 Given these
developments, we believe that patients may benefit from the public
reporting of facility-level volume measure data that reflect the
procedures performed across hospitals and provide the ability to track
volume changes by facility and procedure category. Volume is an
indicator for patients of which facilities are experienced with certain
outpatient procedures.
---------------------------------------------------------------------------
\185\ Abrams KD, Balan-Cohen A, Durbha P. Growth in Outpatient
Care: The role of quality and value incentives. Deloitte Insights.
2018. Available at: https://www2.deloitte.com/us/en/insights/industry/health-care/outpatient-hospital-services-medicare-incentives-value-quality.html.
\186\ Chang AC, Yee J, Orringer MB, Iannettoni MD. Diagnostic
thoracoscopic lung biopsy: an outpatient experience. The Annals of
Thoracic Surgery. 2002;74:1942-7.
---------------------------------------------------------------------------
OP-26 was the only measure in the Hospital OQR Program measure set
that captured facility-level volume within hospitals and volume for
Medicare and non-Medicare patients. As a result of its removal, the
Hospital OQR Program currently does not capture outpatient surgical
procedure volume in hospitals.
Furthermore, we are considering the reintroduction of a facility-
level volume measure to support potential future development of a pain
management measure, as described in a request for comment in the CY
2022 OPPS/ASC final rule with comment period (86 FR 63902 through
63904). When considering the need for a pain management measure, we
analyzed volume data to determine the proportion of ASC procedures
performed for pain management using the methodology established by ASC-
7: ASC Facility Volume Data on Selected ASC Surgical Procedures, the
volume measure that was included in the ASCQR Program measure set (76
FR 74507 through 74509). We found that pain management procedures were
the third most common procedure in CY 2019 and 2020 and concluded that
a pain management measure would provide consumers with important
quality of care information. Thus, a volume measure in the Hospital OQR
Program's measure set would provide information to Medicare
beneficiaries and other interested parties on numbers and proportions
of procedures by category performed by individual facilities, including
for hospital outpatient procedures related to pain management.
We note that the OP-26 measure was adopted in the CY 2012 OPPS/ASC
final rule with comment period (76 FR 4466 through 74468) and was not
reviewed or endorsed by the Measure Applications Partnership (MAP),
which first began its pre-rulemaking review of quality measures across
Federal programs in February 2012, after the publication of the CY 2012
OPPS/ASC final rule with comment period in November 2011.\187\
Therefore, for OP-26 to be adopted in the Hospital OQR Program measure
set, the measure would need to first undergo the pre-rulemaking process
specified in section 1890A(a) of the Act.
---------------------------------------------------------------------------
\187\ Measures Application Partnership. Pre-Rulemaking Report:
Input on Measures Under Consideration by HHS for 2012 Rulemaking
Final Report. February 2012. Available at: https://www.qualityforum.org/Publications/2012/02/MAP_Pre-Rulemaking_Report__Input_on_Measures_Under_Consideration_by_HHS_for_2012_Rulemaking.aspx.
---------------------------------------------------------------------------
Solicitation of Comments on the Readoption of the Hospital Outpatient
Volume on Selected Outpatient Surgical Procedures (OP-26) Measure or
Other Volume Indicator in the Hospital OQR Program
We seek comment on the potential inclusion of a volume measure in
the Hospital OQR Program, either by re-adopting the Hospital Outpatient
Volume on Selected Outpatient Surgical Procedures (OP-26) measure or
adopting another volume indicator. We also seek comment on what volume
data hospitals currently collect and if it is feasible to submit this
data to the Hospital OQR Program, to minimize the collection and
reporting burden of an alternative, new volume measure. Additionally,
we seek comment on an appropriate timeline for implementing and
publicly reporting the measure data.
Specifically, we invite comment on the following:
The usefulness of including a volume indicator in the
Hospital OQR Program measure set and publicly reporting volume data.
[[Page 44732]]
Input on the mechanism of volume data collection and
submission, including anticipated barriers and solutions to data
collection and submission.
Considerations for designing a volume indicator to reduce
collection burden and improve data accuracy.
Potential reporting of volume by procedure type, instead
of total surgical procedure volume data for select categories, and
which procedures would benefit from volume reporting.
The usefulness of Medicare versus non-Medicare reporting
versus other or additional categories for reporting.
b. Overarching Principles for Measuring Healthcare Quality Disparities
Across CMS Quality Programs
Significant and persistent inequities in healthcare outcomes exist
in the United States. Belonging to a racial or ethnic minoritized
group; being a member of a religious minority; living with a
disability; being a member of lesbian, gay, bisexual, transgender, and
queer (LGBTQ+) community; living in a rural area; or being near or
below the poverty level is often associated with worse health outcomes.
188 189 190 191 192 193 194 195 196
---------------------------------------------------------------------------
\188\ Joynt KE, Orav E, Jha AK. (2011). Thirty-day readmission
rates for Medicare beneficiaries by race and site of care. JAMA,
305(7):675-681.
\189\ Milkie Vu et al. (2016). Predictors of Delayed Healthcare
Seeking Among American Muslim Women. J Womens Health (Larchmt). 2016
Jun;25(6):586-93. doi: 10.1089/jwh.2015.5517. Epub 2016 Feb 18.
PMID: 26890129; PMCID: PMC5912720.
\190\ Lindenauer PK, Lagu T, Rothberg MB, et al. (2013). Income
inequality and 30-day outcomes after acute myocardial infarction,
heart failure, and pneumonia: Retrospective cohort study. British
Medical Journal, 346.
\191\ Trivedi AN, Nsa W, Hausmann LRM, et al. (2014). Quality
and equity of care in U.S. hospitals. New England Journal of
Medicine, 371(24):2298- 2308.
\192\ Polyakova, M., et al. (2021). Racial disparities in excess
all-cause mortality during the early COVID-19 pandemic varied
substantially across states. Health Affairs, 40(2): 307-316.
\193\ Rural Health Research Gateway. (2018). Rural communities:
age, income, and health status. Rural Health Research Recap. https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
\194\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
\195\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
\196\ Poteat TC, Reisner SL, Miller M, Wirtz AL. (2020). 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. doi:10.1101/2020.07.21.20159327.
---------------------------------------------------------------------------
One approach being employed to reduce inequity across our programs
is the expansion of efforts to report quality measure results
stratified by patient social risk factors and demographic variables.
The Request for Information (RFI) included in the FY 2023 IPPS/LTCH PPS
proposed rule (87 FR 28479), titled ``Overarching Principles for
Measuring Healthcare Quality Disparities Across CMS Quality Programs''
describes key considerations that we might take into account across all
CMS quality programs, including the Hospital OQR Program, when
advancing the use of measure stratification to address healthcare
disparities and advance health equity across our programs.
We ask that readers review the full RFI in the FY 2023 IPPS/LTCH
PPS proposed rule for full details on these considerations. For
comments and feedback on the application of these principles to the
Hospital OQR Program, please respond to this proposed rule.
7. 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 and 59105), where we changed the
frequency of the Hospital OQR Program Specifications Manual release
beginning with CY 2019, such that we will release a manual once every
12 months and release addenda as necessary.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63861), we finalized the adoption of eCQMs into the Hospital OQR
Program measure set beginning with the CY 2023 reporting period and
finalized the manner to update the technical specifications for eCQMs.
Technical specifications for eCQMs used in the Hospital OQR Program
will 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 will
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
electronic health record (EHR) vendors to use in order to collect and
submit data on eCQMs from hospital EHRs. We are not proposing any
changes to these policies in this proposed rule.
8. Public Display of Quality Measures
We refer readers to the CY 2009, CY 2014, and CY 2017 OPPS/ASC
final rules (73 FR 68777 through 68779, 78 FR 75092, and 81 FR 79791,
respectively) for our previously finalized policies regarding public
display of quality measures. We are not proposing any changes to these
policies in this proposed rule.
C. Administrative Requirements
1. QualityNet Account and Security Official
We refer readers to the CYs 2011, 2012, 2014 and 2022 OPPS/ASC
final rules (75 FR 72099; 76 FR 74479; 78 FR 75108 through 75109; and
86 FR 639040, respectively) for the previously finalized QualityNet
security official requirements, including those for setting up a
QualityNet account and the associated timelines. These procedural
requirements are codified at 42 CFR 419.46(b). Hospitals will 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 are not proposing any changes to these policies in
this proposed rule.
2. Requirements Regarding Participation Status
We refer readers to the CYs 2014, 2016, and 2019 OPPS/ASC final
rules (78 FR 75108 through 75109; 80 FR 70519; and 83 FR 59103 through
59104, respectively) for requirements for participation and withdrawal
from the Hospital OQR Program. We codified these requirements at 42 CFR
419.46(b) and (c). We are not proposing any changes to these policies
in this proposed rule.
D. Form, Manner, and Timing of Data Submitted for the Hospital OQR
Program
1. Hospital OQR Program Annual Submission Deadlines
We refer readers to the CYs 2014, 2016, and 2018 OPPS/ASC final
rules (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
[[Page 44733]]
submission requirements at 42 CFR 419.46(d).
a. Proposal To Align Hospital OQR Program Patient Encounter Quarters
for Chart-Abstracted Measures to the Calendar Year for Annual Payment
Update (APU) Determinations
(1) Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR 75110
and 75111), we specified our data submission deadlines and codified our
submission requirements at 42 CFR 419.46(d)(2).\197\ We refer readers
to the CY 2016 OPPS/ASC final rule with comment period (80 FR 70519 and
70520), where we shifted the quarters on which the Hospital OQR Program
payment determinations are based, beginning with the CY 2018 payment
determination. Prior to the adoption of this policy, the previous
timeframe had extended from patient encounter quarter three of 2 years
prior to the payment determination to patient encounter quarter two of
the year prior to the payment determination. This timeframe provided
less than two months between the time that the data was submitted for
validation and the beginning of the payments that are affected by these
data, creating compressed processing times for CMS and compressed
timelines for hospitals to review their APU determination decisions. To
address this issue, we changed the timeframe to begin with patient
encounter quarter two of 2 years prior to the payment determination and
end with patient encounter quarter one of the year prior to the payment
determination.
---------------------------------------------------------------------------
\197\ The CY 2014 OPPS/ASC final rule codified this standard in
Sec. 419.46(c)(2). This provision was moved to its current location
in the CY 2021 OPPS/ASC final rule with comment period.
---------------------------------------------------------------------------
As finalized in the CY 2016 OPPS/ASC final rule with comment period
(80 FR 70519 and 70520), the patient encounter quarters for chart-
abstracted measures data submitted to the Hospital OQR Program are not
aligned with the January through December calendar year. Because these
quarters are not aligned with the calendar year, as other CMS quality
programs' quarters are such as the Hospital Inpatient Quality Reporting
(IQR) Program,\198\ this misalignment has resulted in confusion among
some hospitals regarding submission deadlines and data reporting
quarters.
---------------------------------------------------------------------------
\198\ FY 2011 IPPS/LTCH PPS final rule (75 FR 50220 and 50221).
---------------------------------------------------------------------------
(2) Proposal To Align Hospital OQR Program Patient Encounter Quarters
for Chart-Abstracted Measures to the Calendar Year Beginning With the
CY 2024 Reporting Period/CY 2026 Payment Determination
Beginning with the CY 2024 reporting period/CY 2026 payment
determination, we propose to align the patient encounter quarters for
chart-abstracted measures with the calendar year. If this proposal is
finalized as proposed, all four quarters of patient encounter data for
chart-abstracted measures would be based on the calendar year two years
prior to the payment determination year. We propose this change to
align the patient encounter quarters for chart-abstracted measures with
the calendar year schedule of the Hospital OQR Program and to further
align these quarters with those of the Hospital IQR Program since some
hospitals may be submitting data for both programs. The Hospital IQR
Program's patient encounter quarters all occur on the calendar year 2
years prior to the payment determination year as finalized in the FY
2011 IPPS/LTCH PPS final rule (75 FR 50220 through 50221). We believe
that the proposed alignment would also provide more time for APU
determinations by increasing the length of time between the last
clinical data submission deadline and APU determinations.
As an example, the current and proposed patient encounter quarters
and clinical data submission deadlines for the CY 2028 payment
determination are illustrated in Tables 64 and 65, respectively.
[[Page 44734]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.084
[GRAPHIC] [TIFF OMITTED] TP26JY22.085
To facilitate this process, we propose to transition to the newly
proposed timeframe for the CY 2026 payment determination and subsequent
years and use only three quarters of data for chart-abstracted measures
in determining the CY 2025 payment determination as illustrated in the
tables 66, 67, and 68 below. However, we note that data submission
deadlines would not change.
[GRAPHIC] [TIFF OMITTED] TP26JY22.086
[[Page 44735]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.087
[GRAPHIC] [TIFF OMITTED] TP26JY22.088
We seek public comment on our proposal.
2. Requirements for Chart-Abstracted Measures Where Patient-Level Data
Are Submitted Directly to CMS
We refer readers to the CY 2013 OPPS/ASC final rule with comment period
(77 FR 68481 through 68484) and the QualityNet website available at:
https://qualitynet.cms.gov for a discussion of the requirements for
chart-abstracted measure data submitted via the HQR System (formerly
referred to as the QualityNet Secure Portal) for the CY 2014 payment
determination and subsequent years. We are not proposing any changes to
these policies in this proposed rule.
3. Claims-Based Measure Data Requirements
We refer readers to the CY 2019 OPPS/ASC final rule (83 FR 59106
through 59107), where we established a three-year reporting period for
OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after
Outpatient Colonoscopy beginning with the CY 2020 payment
determination. We refer readers to the CY 2022 OPPS/ASC final rule with
comment period (86 FR 63863) where we finalized a three-year reporting
period for the Breast Cancer Screening Recall Rates measure (OP-39). We
are not proposing any changes to these policies in this proposed rule.
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
We refer readers to the CYs 2017, 2018, and 2022 OPPS/ASC final
rules (81 FR 79792 through 79794; 82 FR 59432 and 59433; and 86 FR
63863 through 63866, respectively) for a discussion of the previously
finalized requirements related to survey administration and vendors for
the OAS CAHPS Survey-based measures.
We refer readers to the CY 2022 OPPS/ASC final rule with comment
period (86 FR 63863 through 63866), where we reaffirmed our approach to
the form, manner, and timing which OAS CAHPS information will be
submitted with two additional data collection modes (web with mail
follow-up of non-respondents and web with telephone follow-up of non-
respondents), 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 are not proposing any changes to
these policies in this proposed rule.
5. Data Submission Requirements for Measures Submitted via a Web Based
Tool
a. Data Submission Requirements for Measures Submitted via a CMS Web-
Based Tool
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75112
through 75115), the CY 2016 OPPS/ASC final rule (80 FR 70521), and the
QualityNet website available at: https://qualitynet.cms.gov for a
discussion of the requirements for measure data submitted via the HQR
System (formerly referred to as the QualityNet Secure Portal) for the
CY 2017 payment determination and subsequent years. We are not
proposing any changes to these policies in this proposed rule.
b. Data Submission Requirements for Measures Submitted via the CDC NHSN
Website
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75097
through 75100) for a discussion of the previously finalized
requirements for measure data submitted via the CDC NHSN website. In
addition, we refer readers to the CY 2022 OPPS/ASC final rule (86 FR
63866), where we finalized the adoption of the COVID-19
[[Page 44736]]
Vaccination Coverage Among Health Care Personnel measure (OP-38)
beginning with the CY 2022 reporting period/CY 2024 payment
determination. We are not proposing any changes to these policies in
this proposed rule.
6. eCQM Reporting and Submission Requirements
a. Background
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75106
and 75107), the CY 2015 OPPS/ASC final rule (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), the CY 2018 OPPS/ASC final rule
with comment period (82 FR 59435 through 59438), and the CY 2022 OPPS/
ASC final rule with comment period (82 FR 63867 through 63870) for more
details on previous discussion regarding future measure concepts
related to eCQMs and electronic reporting of data for the Hospital OQR
Program, including 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.
b. eCQM Reporting and Data Submission Requirements
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63867), we finalized the adoption of the STEMI eCQM (OP-40). In the CY
2022 OPPS/ASC final rule with comment period and a progressive increase
in the number of quarters for which hospitals must report eCQM data (86
FR 63867 and 63868). For the CY 2023 reporting period, we finalized
that hospitals submit STEMI eCQM (OP-40) data during this reporting
period voluntarily for any quarter (86 FR 63868). Hospitals that choose
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 the CY 2022 OPPS/ASC final rule with comment period. We refer
readers to the CY 2022 OPPS/ASC final rule with comment period (86 FR
63867 and 63868) for additional detail on the eCQM reporting and data
submission requirements.
We also refer readers to Table 69 for a summary of the previously
finalized quarterly data increase in eCQM reporting beginning with the
CY 2023 reporting period.
[GRAPHIC] [TIFF OMITTED] TP26JY22.089
c. Electronic Quality Measure Certification Requirements for eCQM
Reporting
(1) Use of Cures Update
In May 2020, the 21st Century Cures Act: Interoperability,
Information Blocking, and the ONC Health IT Certification Program (ONC
21st Century Cures) Act final rule (85 FR 25642 through 25961)
finalized updates to the health IT certification criteria (herein after
referred to as the ``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) Implementation Guides and removal of 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 with up to 24 months from May 1, 2020 to
make available to their customers technology certified to the updated
and/or new criteria (85 FR 25670). In November 2020, ONC issued an
interim final rule (85 FR 70064) which extended the compliance deadline
for the clinical quality measures-report criterion at 45 CFR
170.315(c)(3) until December 31, 2022 (85 FR 70075). These updates were
finalized to reduce burden on health IT developers (85 FR 70075) and
have no impact on providers' existing reporting practices for the
Hospital OQR Program.
We refer readers to the CY 2022 OPPS/ASC final rule with comment
period (86 FR 63868 and 63869), where we finalized the requirement for
hospitals participating in the Hospital OQR Program to utilize
certified technology updated consistent with the Cures Update for the
CY 2023 reporting period/CY 2025 payment determination and for
subsequent years. This period includes both the voluntary reporting
period and mandatory reporting periods. We noted that this requirement
is in alignment with the Hospital IQR Program, which requires use of
technology updated consistent with the Cures Update beginning with the
CY 2023 reporting period/FY 2025 payment determination (See 86 FR
45418). We are not proposing any changes to these policies in this
proposed rule.
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.
We refer reader to the CY 2022 OPPS/ASC final rule with comment
period (86 FR 42262), where we finalized, beginning with the CY 2023
reporting period/CY 2025 payment determination, that hospitals: (1)
Must submit eCQM data via the QRDA Category I (QRDA I) file format;
\199\ (2) may use third parties
[[Page 44737]]
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
files. We also refer readers to the CY 2022 OPPS/ASC final rule with
comment period (86 FR 63869) for discussion on the maintenance of
technical specifications including those for eCQMs. We are not
proposing any changes to these policies in this proposed rule.
---------------------------------------------------------------------------
\199\ 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.
---------------------------------------------------------------------------
(2) Zero Denominator Declarations
We understand there may be situations in which a hospital does not
have data to report on a particular eCQM. We refer readers to the CY
2022 OPPS/ASC final rule with comment period (86 FR 63869), where we
finalized that 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 (86 FR
63869). We refer readers to the CY 2022 OPPS/ASC final rule with
comment period (86 FR 63869) for additional detail on the zero
denominator declarations policy. We are not proposing any changes to
these policies in this proposed rule.
(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
final rule with comment period (86 FR 63869), we finalized a policy
aligning the Hospital OQR Program case threshold exemption with the
case threshold exemption from the Medicare Promoting Interoperability
Program (77 FR 54080) and the Hospital IQR Program (79 FR 50324).
Specifically, for the Hospital OQR Program we finalized 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 five or fewer outpatient discharges per quarter or 20 or
fewer outpatient discharges per year (Medicare and non-Medicare
combined), as defined by an eCQM's denominator population, that
hospital could be exempt from reporting on that eCQM (86 FR 63869). We
also stated that the exemption would not have to be used; a hospital
could report those individual cases if it would like to. We refer
readers to the CY 2022 OPPS/ASC final rule with comment period (86 FR
63869) for additional detail on the case threshold exemption policy. We
are not proposing any changes to these policies in this proposed rule.
e. Submission Deadlines for eCQM Data
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63870), we finalized the policy to require eCQM data submission by May
15 of the following year for the applicable CY reporting period,
beginning with the CY 2023 reporting period/CY 2025 payment
determination. For example, CY 2023 eCQM data would need to be reported
to us by May 15, 2024. We note the submission deadline may be moved to
the next business day if it falls on a weekend or Federal holiday. We
refer reads to the CY 2022 OPPS/ASC final rule with comment period (86
FR 63870) for additional detail on submission deadlines for eCQM data.
We are not proposing any changes to these policies in this proposed
rule.
7. Population and Sampling Data Requirements for the CY 2023 Payment
Determination and Subsequent Years
We refer readers to the CY 2011 OPPS/ASC final rule (75 FR 72100
through 72103) and the CY 2012 OPPS/ASC final rule (76 FR 74482 through
74483) for discussions of our population and sampling requirements. We
are not proposing any changes to these policies in this proposed rule.
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 (79 FR 66964
and 67014) where we formalized a review and corrections period for
chart-abstracted measures in the Hospital OQR Program. We are not
proposing any changes to these policies in this proposed rule.
b. Web-Based Measures
In the CY 2021 OPPS/ASC final rule with comment period (85 FR
86184), we finalized an expansion of our review and corrections policy
to apply to measure data submitted via the CMS web-based tool beginning
with data submitted for the CY 2021 reporting period/CY 2023 payment
determination. We are not proposing any changes to these policies in
this proposed rule.
c. Electronic Clinical Quality Measures (eCQMs)
We refer readers to the CY 2022 OPPS/ASC final rule with comment
period (86 FR 63870) where we finalized that hospitals have a review
and corrections period for eCQM data submitted to the Hospital OQR
Program. We finalized a review and corrections period for eCQM data
which would run concurrently with the data submission period. We refer
readers to the QualityNet website (available at: https://qualitynet.cms.gov/outpatient/measures/eCQM) and the eCQI Resource
Center (available at: https://ecqi.healthit.gov/) for more resources on
eCQM reporting. We are not proposing any changes to these policies in
this proposed rule.
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 the CY 2022 OPPS/ASC final rule with
comment period (86 FR 63870). 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). We are not proposing any changes to these
policies in this proposed rule.
9. Hospital OQR Program Validation Requirements
a. Background
We refer readers to the CY 2011 OPPS/ASC final rule (75 FR 72105
through 72106), the CY 2013 OPPS/ASC final rule (77 FR 68484 through
68487), the CY 2015 OPPS/ASC final rule (79 FR 66964 through 66965),
the CY 2016 OPPS/ASC final rule (80 FR 70524), the CY 2018 OPPS/ASC
final rule (82 FR 59441 through 59443), the CY 2022 OPPS/ASC final rule
(86 FR 63870 through 63873), 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
In the CY 2022 OPPS/ASC final rule (86 FR 63870), we finalized
discontinuing the option for hospitals to send paper copies of, or CDs,
DVDs, or flash drives containing medical records for validation
affecting the CY 2022
[[Page 44738]]
reporting period/CY 2024 payment determination. Hospitals must instead
submit only electronic files when submitting copies of medical records
for validation of chart-abstracted measures. Under this policy,
hospitals are required to submit PDF copies of medical records using
direct electronic file submission via a CMS-approved secure file
transmission process as directed by the CMS Data Abstraction Center
(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 aligns with that for
the Hospital IQR Program (See FY 2021 IPPS/LTCH PPS final rule, 85 FR
58949). We refer readers to the CY 2022 OPPS/ASC final rule (86 FR
63870) for additional information on the use of electronic file
submissions for chart-abstracted measure medical records requests. We
are not proposing any changes to these policies in this proposed rule.
c. Time Period for Chart-Abstracted Measure Data Validation
We refer readers to the chart-abstracted validation requirements
and methods we adopted in the CY 2014 OPPS/ASC final rule (78 FR 75117
through 75118) and codified at 42 CFR 419.46(f)(1) for the CY 2025
payment determination and subsequent years.
We refer readers to the CY 2022 OPPS/ASC final rule (86 FR 63871)
where we finalized the revision of 42 CFR 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 affecting
the CY 2024 payment determination and for subsequent years. We are not
proposing any changes to these policies in this proposed rule.
d. Targeting Criteria
(1) Background
In the CY 2012 OPPS/ASC final rule (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 (77 FR 68485 and 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
(77 FR 68486 and 68487) for a discussion of finalized policies
regarding our medical record validation procedure requirements. In the
CY 2018 OPPS/ASC final rule (82 FR 59441), for the targeting criterion
``the hospital has an outlier value for a measure based on the data it
submits,'' we clarified that an ``outlier value'' for purposes of this
criterion is defined as a measure value that appears to deviate
markedly from the measure values for other hospitals. In the CY 2022
OPPS/ASC final rule (86 FR 63872), we finalized the addition of two
targeting criteria: any hospital that has not been randomly selected
for validation in any of the previous three years or any hospital that
passed validation in the previous year and had a two-tailed confidence
interval that included 75 percent. We refer readers to the CY 2022
OPPS/ASC final rule (86 FR 63872) for additional information on the
Hospital OQR Program's previously finalized targeting criteria.
We have codified at 42 CFR 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
targeting 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 five standard deviations from the mean of the measure
values for other hospitals and indicates a poor score; or
The hospital has not been randomly selected for validation
in any of the previous three years; or
The hospital passed validation in the previous year but
had a two-tailed confidence interval that included 75 percent.
(2) Proposed Addition of Targeting Criterion
Beginning with validations affecting the CY 2023 reporting period/
CY 2025 payment determination, we propose to add a new criterion to the
four established targeting criteria at Sec. 419.46(f)(3) used to
select the 50 additional hospitals. We propose that a hospital with
less than four quarters of data subject to validation due to receiving
an ECE for one or more quarters and with a two-tailed confidence
interval that is less than 75 percent would be targeted for validation
in the subsequent validation year. We propose this additional criterion
because such a hospital would have less than four quarters of data
available for validation and its validation results could be considered
inconclusive for a payment determination. Hospitals that meet this
criterion would be required to submit medical records to the CDAC
contractor within 30 days of the date identified on the written request
as finalized in the CY 2022 OPPS/ASC final rule (86 FR 63871) and
codified at Sec. 419.46(f)(1).
It is important to clarify that, consistent with our previously
finalized policy, a hospital is subject to both payment reduction and
targeting for validation in the subsequent year if it either: (a) has
less than four quarters of data, but does not have an ECE for one more
or more quarters and does not meet the 75 percent threshold; or (b) has
four quarters of data subject to validation and does not meet the 75
percent threshold.
Specifically, we propose to revise 42 CFR 419.46(f)(3) to add the
following criterion for targeting the additional 50 hospitals for
validation:
Any hospital with a two-tailed confidence interval that is
less than 75 percent, and that had less than four quarters of data due
to receiving an ECE for one or more quarters.
Our proposal would allow us to appropriately address instances in
which hospitals that submit fewer than four quarters of data due to
receiving an ECE for one or more quarters might face payment reduction
under the current validation policies. We invite public comment on our
proposal.
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 (82 FR 59441
through 59443) and the CY 2021 OPPS/ASC final rule (85 FR 86185) where
we finalized and codified a policy to formalize the Educational Review
Process for Chart-Abstracted Measures, including Validation Score
Review and Correction. We are not proposing any changes to these
policies in this proposed rule.
9. Extraordinary Circumstances Exception (ECE) Process
We refer readers to the CY 2013 OPPS/ASC final rule (77 FR 68489),
the CY 2014 OPPS/ASC final rule (78 FR 75119 through 75120), the CY
2015 OPPS/ASC final rule (79 FR 66966), the CY 2016 OPPS/ASC final rule
(80 FR 70524), the CY 2017 OPPS/ASC final rule (81 FR 79795), the CY
2018 OPPS/ASC final rule (82 FR 59444), the CY 2022 OPPS/ASC final rule
(86 FR 63873), and 42 CFR 419.46(e) for a complete discussion of our
[[Page 44739]]
extraordinary circumstances exception (ECE) process under the Hospital
OQR Program. We are not proposing any changes to these policies in this
proposed rule.
10. Hospital OQR Program Reconsideration and Appeals Procedures
We refer readers to the CY 2013 OPPS/ASC final rule (77 FR 68487
through 68489), the CY 2014 OPPS/ASC final rule (78 FR 75118 through
75119), the CY 2016 OPPS/ASC final rule (80 FR 70524), the CY 2017
OPPS/ASC final rule (81 FR 79795), the CY 2021 OPPS/ASC final rule (85
FR 68185), and 42 CFR 419.46(g) for our reconsideration and appeals
procedures. We are not proposing any changes to these policies in this
proposed rule.
E. Payment Reduction for Hospitals That Fail To Meet the Hospital OQR
Program Requirements for the CY 2023 Payment Determination
1. Background
Section 1833(t)(17) of the Act, which applies to subsection (d)
hospitals (as defined under section 1886(d)(1)(B) of the Act), states
that hospitals that fail to report data required to be submitted on
measures selected by the Secretary, in the form and manner, and at a
time, specified by the Secretary will incur a 2.0 percentage point
reduction to their Outpatient Department (OPD) fee schedule increase
factor; that is, the annual payment update factor. Section
1833(t)(17)(A)(ii) of the Act specifies that any reduction applies only
to the payment year involved and will not be taken into account in
computing the applicable OPD fee schedule increase factor for a
subsequent year.
The application of a reduced OPD fee schedule increase factor
results in reduced national unadjusted payment rates that apply to
certain outpatient items and services provided by hospitals that are
required to report outpatient quality data in order to receive the full
payment update factor and that fail to meet the Hospital OQR Program
requirements. Hospitals that meet the reporting requirements receive
the full OPPS payment update without the reduction. For a more detailed
discussion of how this payment reduction was initially implemented, we
refer readers to the CY 2009 OPPS/ASC final rule with comment period
(73 FR 68769 through 68772).
The national unadjusted payment rates for many services paid under
the OPPS equal the product of the OPPS conversion factor and the scaled
relative payment weight for the APC to which the service is assigned.
The OPPS conversion factor, which is updated annually by the OPD fee
schedule increase factor, is used to calculate the OPPS payment rate
for services with the following status indicators (listed in Addendum B
to the proposed rule, which is available via the internet on the CMS
website): ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'', ``R'', ``S'',
``T'', ``V'', or ``U''. In the CY 2017 OPPS/ASC final rule with comment
period (81 FR 79796), we clarified that the reporting ratio does not
apply to codes with status indicator ``Q4'' because services and
procedures coded with status indicator ``Q4'' are either packaged or
paid through the Clinical Laboratory Fee Schedule and are never paid
separately through the OPPS. Payment for all services assigned to these
status indicators will be subject to the reduction of the national
unadjusted payment rates for hospitals that fail to meet Hospital OQR
Program requirements, with the exception of services assigned to New
Technology APCs with assigned status indicator ``S'' or ``T''. We refer
readers to the CY 2009 OPPS/ASC final rule with comment period (73 FR
68770 through 68771) for a discussion of this policy.
The OPD fee schedule increase factor is an input into the OPPS
conversion factor, which is used to calculate OPPS payment rates. To
reduce the OPD fee schedule increase factor for hospitals that fail to
meet reporting requirements, we calculate two conversion factors--a
full market basket conversion factor (that is, the full conversion
factor), and a reduced market basket conversion factor (that is, the
reduced conversion factor). We then calculate a reduction ratio by
dividing the reduced conversion factor by the full conversion factor.
We refer to this reduction ratio as the ``reporting ratio'' to indicate
that it applies to payment for hospitals that fail to meet their
reporting requirements. Applying this reporting ratio to the OPPS
payment amounts results in reduced national unadjusted payment rates
that are mathematically equivalent to the reduced national unadjusted
payment rates that would result if we multiplied the scaled OPPS
relative payment weights by the reduced conversion factor. For example,
to determine the reduced national unadjusted payment rates that applied
to hospitals that failed to meet their quality reporting requirements
for the CY 2010 OPPS, we multiplied the final full national unadjusted
payment rate found in Addendum B of the CY 2010 OPPS/ASC final rule
with comment period by the CY 2010 OPPS final rule with comment period
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
[[Page 44740]]
that fail to meet the requirements of the Hospital OQR Program. For
example, the following standard adjustments apply to the reduced
national unadjusted payment rates: the wage index adjustment, the
multiple procedure adjustment, the interrupted procedure adjustment,
the rural sole community hospital adjustment, and the adjustment for
devices furnished with full or partial credit or without cost.
Similarly, OPPS outlier payments made for high cost and complex
procedures will continue to be made when outlier criteria are met. For
hospitals that fail to meet the quality data reporting requirements,
the hospitals' costs are compared to the reduced payments for purposes
of outlier eligibility and payment calculation. We established this
policy in the OPPS beginning in the CY 2010 OPPS/ASC final rule with
comment period (74 FR 60642). For a complete discussion of the OPPS
outlier calculation and eligibility criteria, we refer readers to
section II.G of this proposed rule.
2. Reporting Ratio Application and Associated Adjustment Policy for CY
2023
We propose to continue our established policy of applying the
reduction of the OPD fee schedule increase factor through the use of a
reporting ratio for those hospitals that fail to meet the Hospital OQR
Program requirements for the full CY 2023 annual payment update factor.
For this CY 2023 OPPS/ASC proposed rule, the proposed reporting ratio
is 0.9805, which, when multiplied by the proposed full conversion
factor of $86.785, 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 $85.093. We propose to continue
to apply the reporting ratio to all services calculated using the OPPS
conversion factor. We propose to continue to apply the reporting ratio,
when applicable, to all HCPCS codes to which we have proposed status
indicator assignments of ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'', ``Q3'',
``R'', ``S'', ``T'', ``V'', and ``U'' (other than New Technology APCs
to which we have proposed status indicator assignments of ``S'' and
``T''). We propose to continue to exclude services paid under New
Technology APCs. We propose to continue to apply the reporting ratio to
the national unadjusted payment rates and the minimum unadjusted and
national unadjusted copayment rates of all applicable services for
those hospitals that fail to meet the Hospital OQR Program reporting
requirements. We also propose to continue to apply all other applicable
standard adjustments to the OPPS national unadjusted payment rates for
hospitals that fail to meet the requirements of the Hospital OQR
Program. Similarly, we propose to continue to calculate OPPS outlier
eligibility and outlier payment based on the reduced payment rates for
those hospitals that fail to meet the reporting requirements. In
addition to our proposal to implement the policy through the use of a
reporting ratio, we also propose to calculate the reporting ratio to
four decimals (rather than the previously used three decimals) to more
precisely calculate the reduced adjusted payment and copayment rates.
For CY 2023, the proposed reporting ratio is 0.9805, which, when
multiplied by the final full conversion factor of $86.785, 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 $85.093.
XV. Requirements for the Ambulatory Surgical Center Quality Reporting
(ASCQR) Program
A. Background
1. Overview
We refer readers to section XIV.A.1 of the CY 2020 OPPS/ASC final
rule (84 FR 61410) for a general overview of our outpatient quality
reporting programs.
2. Statutory History of the ASCQR Program
We refer readers to the CY 2012 OPPS/ASC final rule (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 CYs 2014 through 2022 OPPS/ASC final rules
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);
CY 2021 OPPS/ASC final rule (85 FR 86187 through 86193);
and
CY 2022 OPPS/ASC final rule (86 FR 63875 through 63911).
We have codified requirements under the ASCQR Program in 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 (77 FR 68493
and 68494) for a detailed discussion of the priorities we consider for
the ASCQR Program quality measure selection. We are not proposing any
changes to these policies in this proposed rule.
2. Retention and Removal of Quality Measures From the ASCQR Program
a. Retention of Previously Adopted ASCQR Program Measures
We previously finalized a policy to retain measures from the
previous year measure set for subsequent years, except when such
measures are removed (76 FR 74494 and 74504; 77 FR 68494 and 68495; 78
FR 75122; and 79 FR 66967 through 66969). We are not proposing any
changes to this policy in this proposed rule.
b. Removal Factors for ASCQR Program Measures
In the CY 2019 OPPS/ASC final rule (83 FR 59111 through 59115), we
finalized and codified at 42 CFR 416.320 an updated set of factors and
the process for removing measures from the ASCQR Program. We are not
proposing any changes to these policies in this proposed rule.
3. Proposal To Change the Cataracts: Improvement in Patient's Visual
Function Within 90 Days Following Cataract Surgery (ASC-11) Measure
From Mandatory to Voluntary Beginning With the CY 2027 Payment
Determination
a. Background
The ASC-11 measure was adopted in the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75129). During CY 2014 OPPS/ASC rulemaking,
some commenters expressed concern about the burden of collecting pre-
operative and post-operative visual function surveys (78 FR 75129). In
response to those comments, we modified our implementation strategy in
a manner that we believed would significantly minimize collection and
reporting burden by applying a sampling scheme and a low case threshold
exemption to address commenters' concerns regarding burden (78 FR
75129). Shortly thereafter, we became concerned about the use of what
we believed at the time were inconsistent surveys to assess
[[Page 44741]]
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 on accuracy, feasibility, or reporting
burden. Therefore, we issued guidance stating that we would delay the
implementation of ASC-11, and we subsequently finalized in the CY 2015
OPPS/ASC final rule (79 FR 66983 through 66985) the exclusion of ASC-11
from the required measure set while allowing ASCs to voluntarily report
measure data beginning with the CY 2015 reporting period.
b. Considerations Concerning Previously Finalized ASC-11 Measure
Requirements Beginning With the CY 2025 Reporting Period/CY 2027
Payment Determination
In the CY 2022 OPPS/ASC proposed rule (86 FR 42272), we stated that
it would be appropriate to require that ASCs report on ASC-11 for the
CY 2023 reporting period/CY 2025 payment determination as ASCs have had
the opportunity for several years to familiarize themselves with ASC-
11, prepare to operationalize it, and to practice reporting the measure
since the CY 2015 reporting period/CY 2017 payment determination. Many
commenters expressed concern about making this measure mandatory due to
the burden of reporting the measure and the impact this additional
burden would have during the COVID-19 pandemic, stating that ASC-11 has
not been mandatory and many facilities have not been practicing
reporting it (86 FR 63886). In response to these comments, in the CY
2022 OPPS/ASC final rule with comment period, we finalized a delay in
the implementation of this measure with mandatory reporting beginning
with the CY 2025 reporting period/CY 2027 payment determination (86 FR
63885 through 63887).
We now believe it is appropriate to suspend implementation of
mandatory reporting and retain continue voluntary reporting for the
ASC-11 measure and not require reporting starting with the CY 2027
payment determination. Since the publication of the CY 2022 OPPS/ASC
final rule, interested parties have expressed concern about the
reporting burden of this measure given the ongoing COVID-19 public
health emergency (PHE). Interested parties have indicated that
facilities remain impacted by the COVID-19 PHE and that the requirement
to report ASC-11 would be burdensome due to national staffing and
medical supply shortages coupled with unprecedented changes in patient
case volumes. Due to the continued impact of the COVID-19 PHE, such as
national staffing and medical supply shortages, we believe the two-year
delay of mandatory reporting for this measure is no longer sufficient.
Based on these factors and the feedback we received from interested
parties, we believe it is appropriate to continue with voluntary
reporting and delay mandatory reporting requirements for the ASC-11
measure until future rulemaking. Therefore, we propose to delay
mandatory reporting of the ASC-11 measure beginning with CY 2025
reporting period/CY 2027 payment determination and maintain reporting
for this measure as voluntary. ASCs would not be subject to a payment
reduction for failing to report this measure during the voluntary
reporting period; however, we strongly encourage ASCs to gain
experience with the measure. We plan to continue to evaluate this
policy moving forward. To be clear, there are no changes to reporting
for the CY 2023 and CY 2024, during which the measure would remain
voluntary.
As the ASC-11 measure uniquely requires cross-setting coordination
among clinicians of different specialties (that is, surgeons and
opthalmologists), we believe it appropriate to defer mandatory
reporting at this time. We will consider mandatory reporting of ASC-11
after the national PHE declaration officially ends and we find it
appropriate to do so given COVID-19 PHE impacts on national staffing
and supply shortages. As we noted in the CY 2015 OPPS/ASC final rule,
this measure addresses an area of care that is not adequately addressed
in our current measure set and the measure serves to drive the
coordination of care (79 FR 66984). We subsequently stated in the CY
2022 OPPS/ASC final rule with comment period that while the measure has
been voluntary and available for reporting since the CY 2015 reporting
period, a number of facilities have reported data consistently for this
measure and those that have reported these data have done so
consistently (86 FR 63886).
We invite public comment on this proposal.
4. ASCQR Program Quality Measure Set
a. Summary of Previously Finalized ASCQR Program Quality Measure Set
for the CY 2023 Reporting Period/CY 2025 Payment Determination and the
CY 2024 Reporting Period/CY 2026 Payment Determination
We refer readers to the CY 2022 OPPS/ASC final rule with comment
period (86 FR 63875 through 63893) for the previously finalized ASCQR
Program measure set for the CY 2023 program year and subsequent years.
Table 70 summarizes the previously finalized ASCQR Program measure
set for the CY 2023 reporting period/CY 2025 payment determination and
the CY 2024 reporting period/CY 2026 payment determination.
[[Page 44742]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.090
b. Summary of the Proposed ASCQR Program Quality Measure Set for the CY
2025 Reporting Period/CY 2027 Payment Determination and Subsequent
Years
Table 71 summarizes the previously finalized ASCQR Program measure
set for the CY 2025 reporting period/CY 2027 payment determination and
subsequent years as would be modified by the proposal described
previously in this section of this proposed rule.
[[Page 44743]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.091
5. ASCQR Program Measures and Topics for Future Consideration
a. Request for Comment: A Potential Future Specialty Centered Approach
for the ASCQR Program
An overarching ASCQR Program goal is to have an up to date,
comprehensive set of quality measures for widespread use to promote
informed decision-making regarding clinical care and quality
improvement efforts in the ASC setting. We recognize the clinician and
clinician-group centered, specialized nature of care delivered in ASCs.
We, therefore, seek comment on a potential future direction of quality
reporting under the ASCQR Program that would allow quality-related data
for ASCs to be reported on a customizable measure set that more
accurately reflects the care delivered in this setting and accounts for
the services provided by individual facilities. ASC services for
Medicare beneficiaries are concentrated in a limited number of
procedures. Because of this, there could be a set of measures related
to different specialties, for example, ophthalmology, from which ASCs
could choose a specified number, but individualized combination of
measures. Another option could include the creation of specific
specialized tracks which would standardize quality measures within a
specialty area. Such a reporting structure could benefit ASCs by
allowing them to focus on practice-specific measures on a specialty or
multispecialty basis; patients and other interested parties could
benefit through the provision of more relevant information on quality
and safety within ASCs.
Specialty Centered Quality Reporting Under the Merit-Based Incentive
Payment System (MIPS) \200\
---------------------------------------------------------------------------
\200\ Centers for Medicare & Medicaid Services. Quality Payment
Program Overview. Available at: https://qpp.cms.gov/about/qpp-overview.
---------------------------------------------------------------------------
The Merit-Based Incentive Payment System adjusts Medicare Part B
payment to a clinician based on the clinician's prior performance on
four performance categories.\201\ The four performance categories on
which clinicians are scored are quality, cost, improvement activities
(IA), and Promoting Interoperability.\202\ Under MIPS, CMS has
established measure and activity inventories from which clinicians may
select measures and activities to report and complete,
respectively.\203\ While the Traditional MIPS program is being phased
out over time,204 205 we nonetheless believe that the
quality performance category of the program provides an example of a
specialty centered approach to quality reporting that is relevant to
ASCs as clinically specialized facilities. We believe that quality
reporting for ASCs would benefit from measures that:
---------------------------------------------------------------------------
\201\ See Social Security Act section 1848(q).
\202\ See id. Section 1848(q)(2)(A)(i) and (iii).
\203\ See id. Section 1848(q)(2)(D); see also 42 CFR
414.1355(a).
\204\ CY 2022 Physician Fee Schedule final rule (86 FR 65376).
\205\ Centers for Medicare & Medicaid Services. MIPS Value
Pathways. Available at: https://qpp.cms.gov/mips/mips-value-pathways.
---------------------------------------------------------------------------
Consist of limited, connected, and complementary sets of
measures and related activities that are meaningful to clinicians;
Include measures and activities resulting in comparative
performance data that are valuable to patients and caregivers in
evaluating clinician performance and making choices about their care;
[[Page 44744]]
Promote subgroup reporting that comprehensively reflects
the services provided by multispecialty groups;
Include measures selected using the Meaningful Measures
\206\ approach and, wherever possible, include the patient voice;
---------------------------------------------------------------------------
\206\ Centers for Medicare & Medicaid Services. Meaningful
Measures Hub. Available at: https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.
---------------------------------------------------------------------------
b. Solicitation of Comments on a Potential Future Specialty
Centered Approach for the ASCQR Program
We request comment on the following questions for the ASCQR
Program:
Is the general concept of quality reporting by specialty
feasible and desirable for ASCs participating in the ASCQR Program?
Were we to adopt a specialty centered approach to quality
measure reporting for the ASCQR Program, should CMS require that ASCs
report a subset of quality measures that apply broadly to all ASCs? An
example of potential broadly applicable measures for ASCs based on CY
2022 performance year MIPS quality measures \207\ can be found in Table
73.
---------------------------------------------------------------------------
\207\ Centers for Medicare & Medicaid Services. Traditional
MIPS: Explore Measures & Activities. Performance Year 2022.
Available at: https://qpp.cms.gov/mips/explore-measures?tab=qualityMeasures&py=2022.
---------------------------------------------------------------------------
Were we to adopt a specialty centered approach for quality
measure reporting for the ASCQR Program, what would be the appropriate
number and type of measures that ASCs should be required to report? Are
there minimum and maximum numbers of measures required for ASCs that
provide meaningful information while not being overly burdensome? What
is the preferred balance of required quality measures that apply
broadly to all ASCs and quality measures that apply to a particular
area of specialization?
BILLING CODE 4120-01-P
[[Page 44745]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.092
[[Page 44746]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.093
Were we to adopt a specialty centered approach for quality
measure reporting for the ASCQR Program, which area(s) of
specialization would benefit from such an approach and which would not?
Were we to adopt a specialty centered approach for quality
measure reporting for the ASCQR Program, should CMS define a set of
measures for particular areas of specialization (for example,
ophthalmology) or should measures be self-selected for individual
facilities from selected categories, especially given that an ASC may
be multi-specialty?
We have considered several potential measure sets for the ASC
setting based on CY 2022 performance year MIPS quality measures.\208\
An example of an ophthalmology measure set using quality measures based
on CY 2022 performance year MIPS quality measures \209\ can be found in
Table 73. An example of a gastroenterology measure set can be found in
Table 75. We welcome comment on these specific examples as well as
comment on potential future measure sets for other specialization
areas.
---------------------------------------------------------------------------
\208\ Centers for Medicare & Medicaid Services. Traditional
MIPS: Explore Measures & Activities. Performance Year 2022.
Available at: https://qpp.cms.gov/mips/explore-measures?tab=qualityMeasures&py=2022.
\209\ Centers for Medicare & Medicaid Services. Traditional
MIPS: Explore Measures & Activities. Performance Year 2022.
Available at: https://qpp.cms.gov/mips/explore-measures?tab=qualityMeasures&py=2022.
---------------------------------------------------------------------------
Were we to adopt a specialty centered approach for quality
measure reporting under the ASCQR Program, should ASCs be required to
report all measures in such a measure set, or should they be permitted
to select a minimum number of measures from their selected measure set?
Were we to adopt a specialty centered approach for quality
measure reporting system under the ASCQR Program, what measures, if
any, from the current ASCQR Program measure set should be retained and
incorporated in such an approach?
[[Page 44747]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.094
[[Page 44748]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.095
BILLING CODE 4120-01-C
c. Request for Comment: Potential Future Reimplementation of ASC
Facility Volume Data on Selected ASC Surgical Procedures (ASC-7)
Measure or Other Volume Indicator
(1) Background
ASC services for Medicare beneficiaries are concentrated in a
limited number of procedures. Medicare covers surgical procedures
represented in about 3,500 Healthcare Common Procedure Coding System
(HCPCS) codes under the ASC payment system; however, ASC volume for
services covered under Medicare is concentrated in a relatively small
number of HCPCS codes. In 2019, for example, 29 HCPCS codes accounted
for 75 percent of the ASC volume for surgical services provided to
Medicare beneficiaries.\210\
---------------------------------------------------------------------------
\210\ Medicare Payment Advisory Commission. March 2021 Report to
the Congress: Medicare Payment Policy. Available at: https://www.medpac.gov/document/march-2021-report-to-the-congress-medicare-payment-policy/.
---------------------------------------------------------------------------
Although ASCs perform procedures under a smaller and more
specialized subset of HCPCS codes, the volume within these services
continues to increase. Hospital care has been gradually shifting from
inpatient to outpatient settings, and since 1983, inpatient stays per
capita have fallen by 31 percent.\211\ From 2014 to 2018, the volume of
ASC services delivered per Medicare Part B Fee-for-Service (FFS)
beneficiary increased by 2.1 percent.\212\ During the same time period,
the number of Part B FFS beneficiaries who received ASC services
increased on average by 1.4 percent annually.\213\ Research indicates
that volume in ASCs will continue to grow, with some estimates
projecting a 25 percent increase in patients between 2019 and
2029.\214\
---------------------------------------------------------------------------
\211\ Medicare Payment Advisory Commission. March 2021 Report to
the Congress: Medicare Payment Policy. Chapter 3. Available at:
https://www.medpac.gov/wp-content/uploads/2021/10/mar21_medpac_report_ch3_sec.pdf.
\212\ Medicare Payment Advisory Commission. March 2021 Report to
the Congress: Medicare Payment Policy. Available at: https://www.medpac.gov/document/march-2021-report-to-the-congress-medicare-payment-policy/.
\213\ Medicare Payment Advisory Commission. March 2021 Report to
the Congress: Medicare Payment Policy. Available at: https://www.medpac.gov/document/march-2021-report-to-the-congress-medicare-payment-policy/.
\214\ Sg2. Sg2 Impact of Change Forecast Predicts Enormous
Disruption in Health Care Provider Landscape by 2029. June 4, 2021.
Available at: https://www.sg2.com/media-center/press-releases/sg2-impact-forecast-predicts-disruption-health-care-provider-landscape-2029/.
---------------------------------------------------------------------------
Volume has a long history as a quality metric, however, quality
measurement efforts had moved away from procedure volume as it was
considered simply a proxy for quality rather than directly measuring
outcomes.\215\ More recent studies suggest that while larger facility
surgical procedure volume does not alone lead to better outcomes, it
may be associated with better outcomes due to having characteristics
that improve care (for example, high-volume facilities may have teams
that work more effectively together, or have superior systems or
programs for identifying and responding to complications), making
volume an important component of quality.\216\ The
[[Page 44749]]
ASCQR Program does not currently include a quality measure for
facility-level volume data, including surgical procedure volume data,
but did so previously. We refer readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74507 through 74509) where we adopted
the ASC Facility Volume Data on Selected Procedures measure (ASC-7)
beginning with the CY 2013 reporting period/CY 2015 payment
determination. This structural measure of facility capacity collected
surgical procedure volume data on six categories of procedures
frequently performed in the ASC setting: Gastrointestinal, Eye, Nervous
System, Musculoskeletal, Skin, and Genitourinary (76 FR 74507). We
adopted ASC-7 based on evidence that the volume of surgical procedures,
and particularly of high-risk surgical procedures, is related to better
patient outcomes, including decreased medical errors and mortality. We
further stated our belief that publicly reporting volume data would
provide patients with beneficial information to use when selecting a
care provider (76 FR 74507).
---------------------------------------------------------------------------
\215\ Jha AK. Back to the Future: Volume as a Quality Metric.
JAMA Forum Archive. Published online June 10, 2015.
\216\ Auerbach AD et al. The Relationship between Case-Volume,
Care Quality, and Outcomes of Complex Cancer Surgery. Journal of the
American College of Surgery. 2010;211(5):601-608. doi:10.1016/
j.jamcollsurg.2010.07.006.
---------------------------------------------------------------------------
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59449
and 59450), we removed ASC-7. We stated our belief at that time that
measures on specific procedure types would provide patients with more
valuable ASC quality of care information as these types of measures are
more strongly associated with desired patient outcomes. Based on this
belief, we removed the ASC-7 measure under our second criterion for
removal from the program; specifically, that there are other measures
available that are more strongly associated with desired patient
outcomes for the particular topic. At the time, some commenters
supported the proposal to remove the ASC-7 measure and agreed with
CMS's rationale that the measure does not add value, however, some
commenters opposed this proposal (82 FR 59449). Commenters that opposed
removal of the ASC-7 measure emphasized the data's usefulness for
comparative research, outcomes research, immediate consumer value, and
strategic planning. Some of these commenters also expressed concerns
that nonavailability of these data would interfere with the acceptance
of ASC-based procedures also noting that the measure is not overly
burdensome (82 FR 59449).
We are considering reimplementing the ASC-7 measure or another
volume measure because, in addition to being an important component of
quality, the shift from the inpatient to outpatient setting has placed
greater importance on tracking the volume of outpatient procedures.
Over the past few decades, innovations in the health care system
have driven the migration of procedures from the inpatient setting to
the outpatient setting. Forty-five percent of percutaneous coronary
intervention (PCI) procedures shifted from the inpatient to outpatient
setting from 2004 to 2014, and more than 70 percent of patients who
undergo thoracoscopic surgery can be discharged on the day of surgery
itself due to the use of innovative techniques and technologies
available in the outpatient setting.217 218 Given the small
number of HCPCS codes utilized by most ASCs, we also believe that
patients may benefit from the public reporting of facility-level volume
measure data that illuminates which procedures are performed across
ASCs and provides the ability to track volume changes by facility and
procedure category. Volume is an indicator for patients of which
facilities are experienced with certain outpatient procedures.
---------------------------------------------------------------------------
\217\ Abrams KD, Balan-Cohen A, Durbha P. Growth in Outpatient
Care: The role of quality and value incentives. Deloitte Insights.
2018. Available at: https://www2.deloitte.com/us/en/insights/industry/health-care/outpatient-hospital-services-medicare-incentives-value-quality.html.
\218\ Chang AC, Yee J, Orringer MB, Iannettoni MD. Diagnostic
thoracoscopic lung biopsy: an outpatient experience. The Annals of
Thoracic Surgery. 2002;74:1942-7.
---------------------------------------------------------------------------
ASC-7 was the only measure in the ASCQR Program measure set that
captured facility-level volume within ASCs and volume for Medicare and
non-Medicare patients. As a result of its removal, the ASCQR Program
currently does not capture outpatient surgical procedure volume in
ASCs.
Furthermore, we are considering the reintroduction of a facility-
level volume measure to support potential future development of a pain
management measure, as described in a request for comment in the CY
2022 OPPS/ASC final rule with comment period (86 FR 63902 through
63904). When considering the need for a pain management measure, we
analyzed volume data using the methodology established by ASC-7 to
determine the proportion of ASC procedures performed for pain
management. We found that pain management procedures were the third
most common procedure in CYs 2019 and 2020 and concluded that a pain
management measure would provide consumers with important quality of
care information. Thus, a volume measure would provide Medicare
beneficiaries and other interested parties information on numbers and
proportions of procedures by category performed by individual
facilities, including for ASC procedures related to pain management.
We note that the ASC-7 measure was adopted in the CY 2012 OPPS/ASC
final rule with comment period (76 FR 74507 through 74509) and was not
reviewed or endorsed by the Measure Applications Partnership (MAP),
which first began its pre-rulemaking review of quality measures across
Federal programs in February 2012 after the publication of the CY 2012
OPPS/ASC final rule with comment period in November 2011.\219\
Therefore, for ASC-7 to be adopted in the ASCQR Program measure set,
the measure would need to first undergo the pre-rulemaking process
specified in section 1890A(a) of the Act.
---------------------------------------------------------------------------
\219\ Measure Applications Partnership. Pre-Rulemaking Report:
Input on Measures Under Consideration by HHS for 2012 Rulemaking
Final Report. February 2012. Available at: https://www.qualityforum.org/Publications/2012/02/MAP_Pre-Rulemaking_Report__Input_on_Measures_Under_Consideration_by_HHS_for_2012_Rulemaking.aspx.
---------------------------------------------------------------------------
(2) Solicitation of Comments on the Reimplementation of the ASC
Facility Volume Data on Selected ASC Surgical Procedures (ASC-7)
Measure or Other Volume Indicator in the ASCQR Program
We seek comment on the potential inclusion of a volume measure in
the ASCQR Program, either by adopting the ASC Facility Volume Data on
Selected ASC Surgical Procedures (ASC-7) measure or adopting another
volume indicator. We also seek comment on what volume data ASCs
currently collect and if it is feasible to submit this data to the
ASCQR Program, to minimize the collection and reporting burden of an
alternative, new volume measure. Additionally, we seek comment on an
appropriate timeline for implementing and publicly reporting the
measure data.
Specifically, we invite comment on the following:
The usefulness of including a volume indicator in the
ASCQR Program measure set and publicly reporting volume data;
Input on the mechanism of volume data collection and
submission, including anticipated barriers and solutions to data
collection and submission;
Considerations for designing a volume indicator to reduce
collection burden and improve data accuracy;
Potential reporting of volume by procedure type, instead
of total surgical procedure volume data for select
[[Page 44750]]
categories, and which procedures would benefit from volume reporting;
and
The usefulness of Medicare versus non-Medicare reporting
versus other or additional categories for reporting.
(3) Request for Comment: Interoperability Initiatives in ASCs
(a) Background
In 2009, under the Health Information Technology for Economic and
Clinical Health Act (HITECH Act), financial incentives were authorized
for hospitals and clinicians to adopt and meaningfully use certified
electronic health record (EHR) technology.\220\ We implemented these
financial incentives by establishing the Medicare and Medicaid EHR
Incentive Program (now known as the Promoting Interoperability
Program), to encourage health care providers to adopt and meaningfully
use certified EHR technology (CEHRT) and improve health care quality,
efficiency, and patient safety.\221\ The Promoting Interoperability
Program also aims to improve care coordination, reduce costs, ensure
privacy and security, improve population health, and engage patients
and their caregivers in their own healthcare.
---------------------------------------------------------------------------
\220\ Social Security Act section 1848(o)(2), amended by HITECH
Act of 2009 section 4101 (February 2009).
\221\ Centers for Medicare & Medicaid Services. CMS Finalizes
Definition Of Meaningful Use Of Certified Electronic Health Records
(EHR) Technology. July 2010. Available at: https://www.cms.gov/newsroom/fact-sheets/cms-finalizes-definition-meaningful-use-certified-electronic-health-records-ehr-technology.
---------------------------------------------------------------------------
ASCs were not included in the HITECH Act and were ineligible for
the financial incentives under the Promoting Interoperability Program.
This differentiation may contribute to many ASCs continuing to utilize
paper-based charts while other healthcare sectors have transitioned to
digital records.\222\ According to an EHR utilization survey conducted
by the Ambulatory Surgical Center Association (ASCA), 54.6 percent of
ASCs use an EHR in their facility, indicating that ASCs have a lower
adoption rate compared to the 85.9 percent of office-based physicians
reported by ONC.\223\ Some EHR vendors have developed ASC-specific
solutions; however, ASCs still face significant barriers to
implementing EHRs as they can be expensive to implement and update, can
require many staff hours for training, and may not offer ASCs a
meaningful investment given the types of services provided and levels
of patient follow-up required.\224\
---------------------------------------------------------------------------
\222\ Vail, T. Electronic Health Record Adoption is Essential
for Outpatient Surgery. Managed Healthcare Executive. April 2021.
Available at: https://www.managedhealthcareexecutive.com/view/electronic-health-record-adoption-is-essential-for-outpatient-surgery.
\223\ Taira, A. ASCA Survey Shows Mixed Usage of EHR among ASCs.
ASC Focus: The ASCA Journal. June 2021. Available at: https://www.ascfocus.org/content/articles-content/articles/2021/digital-debut/asca-survey-shows-mixed-usage-of-ehr-among-ascs.
\224\ Nelson, H. EHR Usability, User Satisfaction High in
Ambulatory Surgery Centers. September 2021. Available at: https://ehrintelligence.com/news/ehr-usability-user-satisfaction-high-in-ambulatory-surgery-centers.
---------------------------------------------------------------------------
We refer readers to the FY 2022 IPPS/LTCH PPS final rule (86 FR
45460 through 45498) where we finalized changes to the Promoting
Interoperability Program, and the FY 2023 IPPS/LTCH PPS proposed rule
(87 FR 28576 through 28612) which proposes additional changes to the
Promoting Interoperability Program. Currently, eligible hospitals and
critical access hospitals (CAHs) are required to report on four scored
objectives including electronic prescribing, health information
exchange, provider to patient exchange, and public health and clinical
data exchange, and must also attest to the following: \225\
---------------------------------------------------------------------------
\225\ Centers for Medicare & Medicaid Services. 2022 Medicare
Promoting Interoperability Program Requirements. March 2022.
Available at: https://www.cms.gov/regulations-guidance/promoting-interoperability/2022-medicare-promoting-interoperability-program-requirements.
---------------------------------------------------------------------------
Security Risk Analysis measure.
Safety Assurance Factors for EHR Resilience (SAFER) Guides
measure.
Actions to limit or restrict the compatibility or
interoperability of CEHRT attestation.
Office of the National Coordinator for Health Information
Technology (ONC) Direct Review Attestation.
(b) Solicitation of Comments on Interoperability in ASCs
We seek comment to explore how ASCs are implementing tools in their
facilities toward the goal of interoperability. We are considering a
future shift in reporting from QualityNet to eCQMs to aid in delivering
effective, safe, efficient, patient-centered, equitable, and timely
care.\226\ Transitioning to eCQMs would increase alignment across
quality reporting programs such as the Hospital OQR Program, which
adopted the STEMI eCQM in the CY 2022 OPPS/ASC final rule with comment
period (86 FR 63822 through 63875). We are interested in learning more
about capabilities for reporting such measures in the future for the
ASCQR Program. Generally, we seek input on: (a) Barriers to
interoperability in the ASC setting; (b) the impact of health IT,
including health IT, certified under the ONC Health IT Certification
Program, on the efficiency and quality of health care services
furnished in ASCs; and (c) the ability of ASCs to participate in
interoperability or EHR-based quality improvement activities, including
the adoption of electronic clinical quality measures (eCQMs).
---------------------------------------------------------------------------
\226\ Centers for Medicare & Medicaid Services. 2022 Electronic
Clinical Quality Measures Basics. March 2022. Available at: https://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/ClinicalQualityMeasures.
---------------------------------------------------------------------------
Specifically, we invite comment on:
What do ASCs perceive as the benefits or risks of
implementing interoperability initiatives in their facilities?
What improvements might be possible with the
implementation of interoperability initiatives in ASCs, including EHR
utilization (reduced delays, efficiencies, ability to benchmark, etc.)?
Do ASCs see interoperability initiatives as non-essential
or detrimental to their business practices?
Some clinicians practicing in ASCs may voluntarily participate in
the MIPS Promoting Interoperability performance category, though they
are not required to do so at this time.\227\ We have considered several
measures from the Promoting Interoperability Program and from the
Traditional MIPS Promoting Interoperability measure set for the CY 2022
performance year that may be applicable for the ASC
setting.228 229 An example of Promoting Interoperability
measures potentially applicable for the ASC setting can be found in
Table 76. We welcome comment on these specific measure examples,
including whether ASCs believe these measures would be appropriate and
feasible for use in ASCs.
---------------------------------------------------------------------------
\227\ Centers for Medicare and Medicaid Services. Quality
Payment Program Special Statuses. 2022. Available at: https://qpp.cms.gov/mips/special-statuses.
\228\ Centers for Medicare and Medicaid Services. 2022 Medicare
Promoting Interoperability Program Requirements. Available at:
https://www.cms.gov/regulations-guidance/promoting-interoperability/2022-medicare-promoting-interoperability-program-requirements.
\229\ Centers for Medicare and Medicaid Services. Traditional
MIPS: Explore Measures & Activities. Performance Year 2022.
Available at: https://qpp.cms.gov/mips/explore-measures?tab=qualityMeasures&py=2022.
---------------------------------------------------------------------------
BILLING CODE 4120-01-P
[[Page 44751]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.096
[[Page 44752]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.097
BILLING CODE 4120-01-C
6. Maintenance of Technical Specifications for Quality Measures
We maintain technical specifications for previously adopted ASCQR
Program measures. These specifications are updated as we modify the
ASCQR 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/asc/specifications-manuals. The policy
on maintenance of technical specifications for the ASCQR Program are
codified at 42 CFR 416.325. We are not proposing any changes to these
policies in this proposed rule.
7. Public Reporting of ASCQR Program Data
We refer readers to the CYs 2012, 2016, 2017, and 2018 OPPS/ASC
final rules (76 FR 74514 through 74515; 80 FR 70531 through 70533; 81
FR 79819 through 79820; and 82 FR 59455 through 59470, respectively)
for detailed discussion of our policies regarding the public reporting
of ASCQR Program data, which are codified at 42 CFR 416.315 (80 FR
70533). We are not proposing any changes to these policies in this
proposed rule.
C. Administrative Requirements
1. Requirements Regarding QualityNet Account and Security Official
We refer readers to the CYs 2014, 2016, and 2021 OPPS/ASC final
rules with comment period (78 FR 75132 through 75133; 80 FR 70533; and
85 FR 86189, respectively) for the previously finalized QualityNet
security official requirements, including requirements for setting up a
QualityNet account and the associated timelines. These
[[Page 44753]]
procedural requirements are codified at 42 CFR 416.310(c)(1)(i). We are
not proposing any changes to this policy in this proposed rule.
2. Requirements Regarding Participation Status
We refer readers to the CY 2014 OPPS/ASC final rule (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 (80 FR 70533 through 70534),
we codified these requirements regarding participation status for the
ASCQR Program at 42 CFR 416.305. We are not proposing any changes to
these policies in this proposed rule.
D. Form, Manner, and Timing of Data Submitted for the ASCQR Program
1. Data Collection and Submission
a. Background
We previously codified our existing policies regarding data
collection and submission under the ASCQR Program at 42 CFR 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 (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
(80 FR 70534), we codified the requirements regarding data processing
and collection periods for claims-based measures using QDCs for the
ASCQR Program at 42 CFR 416.310(a)(1) and (2). We note that the
previously finalized data processing and collection period requirements
will apply to any future claims-based-measures using QDCs adopted in
the ASCQR Program. We are not proposing any changes to these policies
in this proposed rule.
(2) Minimum Threshold, Minimum Case Volume, and Data Completeness for
Claims-Based Measures Using QDCs
We refer readers to the CY 2018 OPPS/ASC final rule (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. We also refer readers to section XVI.D.1.b. of the
CY 2022 OPPS/ASC final rule with comment period (86 FR 63904 through
63905), where we finalized that our policies for minimum threshold,
minimum case volume, and data completeness requirements apply to any
future claims-based-measures using QDCs adopted in the ASCQR Program.
We are not proposing any changes to these policies in this proposed
rule.
(3) Requirements Regarding Data Processing and Collection Periods for
Non-QDC Based, Claims-Based Measure Data
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59136 through 59138) for a complete summary of the data
processing and collection requirements for the non-QDC based, claims-
based measures. We codified the requirements regarding data processing
and collection periods for non-QDC, claims-based measures for the ASCQR
Program at 42 CFR 416.310(b). We note that these requirements for non-
QDC based, claims-based measures apply to the following previously
adopted measures:
ASC-12: Facility 7-Day Risk-Standardized Hospital Visit
Rate after Outpatient Colonoscopy; and
ASC-19: Facility-Level 7-Day Hospital Visits after General
Surgery Procedures Performed at Ambulatory Surgical Centers (NQF
#3357).
We are not proposing any changes to these policies in this proposed
rule.
c. Requirements for Data Submitted via an Online Data Submission Tool
(1) Requirements for Data Submitted via a CMS Online Data Submission
Tool
We refer readers to the CY 2018 OPPS/ASC final rule (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 Hospital Quality Reporting
(HQR) System (formerly referred to as the QualityNet Secure Portal) to
host our CMS online data submission tool, available by securely logging
in at: https://hqr.cms.gov/hqrng/login. 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 42 CFR
416.310(c)(1)(i). We are not proposing any changes to these policies in
this proposed rule.
The following previously finalized measures require data to be
submitted via a CMS online data submission tool for the CY 2021 payment
determination and subsequent years:
ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up
Interval for Normal Colonoscopy in Average Risk Patients;
ASC-11: Cataracts: Improvement in Patients' Visual
Function within 90 Days Following Cataract Surgery;
ASC-13: Normothermia Outcome; and
ASC-14: Unplanned Anterior Vitrectomy.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63883
through 63885), we finalized our proposal to require and resume data
collection beginning with the CY 2023 reporting period/CY 2025 payment
determination 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). We are
not proposing any changes to these policies in this proposed rule.
(2) Requirements for Data Submitted via a Non-CMS Online Data
Submission Tool
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75139
through 75140) and the CY 2015 OPPS/ASC final rule (79 FR 66985 through
66986) for our requirements regarding data submitted via a non-CMS-
online data submission tool (specifically, the CDC's National
Healthcare Safety Network (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 42 CFR 416.310(c)(2). While we did
not finalize any changes to those policies in the CY 2022 OPPS/ASC
final rule (86 FR 63875 through 63883), we did finalize policies
specific to the COVID-19 Vaccination Coverage Among Health Care
Personnel measure (ASC-20), for which data will be submitted via the
CDC NHSN website. We are not proposing any changes to these policies in
this proposed rule.
e. ASCQR Program Data Submission Deadlines
We refer readers to the CY 2021 OPPS/ASC final rule with comment
[[Page 44754]]
period (85 FR 86191) for a detailed discussion of our data submission
deadlines policy, which we codified at 42 CFR 416.310(f). We are not
proposing any changes to this policy in this proposed rule.
f. Review and Corrections Period for Measure Data Submitted to the
ASCQR Program
Review and Corrections Period for Data Submitted via a CMS Online Data
Submission Tool
We refer readers to the CY 2021 OPPS/ASC final rule with comment
period (85 FR 86191 through 86192) for a detailed discussion of our
review and corrections period policy, which we codified at 42 CFR
416.310(c)(1)(iii). We are not proposing any changes to this policy in
this proposed rule.
g. ASCQR Program Reconsideration Procedures
We refer readers to the CY 2016 OPPS/ASC final rule (82 FR 59475)
(and the previous rulemakings cited therein) and 42 CFR 416.330 for the
ASCQR Program's reconsideration policy. We are not proposing any
changes to this policy in this proposed rule.
h. Extraordinary Circumstances Exception (ECE) Process
We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59474
through 59475) (and the previous rulemakings cited therein) and 42 CFR
416.310(d) for the ASCQR Program's extraordinary circumstance
exceptions (ECE) requests policy. We are not proposing any changes to
this policy in this proposed rule.
E. Proposed Payment Reduction for ASCs That Fail To Meet the ASCQR
Program Requirements
1. Statutory Background
We refer readers to the CY 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 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, are not affected by reductions to the annual
update (77 FR 68500).
Office-based surgical procedures (generally those performed more
than 50 percent of the time in physicians' offices) and separately paid
radiology services (excluding covered ancillary radiology services
involving certain nuclear medicine procedures or involving the use of
contrast agents) are paid at the lesser of the PFS nonfacility PE RVU-
based amounts or the amount calculated under the standard ASC
ratesetting methodology. Similarly, in the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66933 through 66934), we finalized our
proposal that payment for certain diagnostic test codes within the
medical range of CPT codes for which separate payment is allowed under
the OPPS will be at the lower of the PFS nonfacility PE RVU-based (or
technical component) amount or the rate calculated according to the
standard ASC ratesetting methodology when provided integral to covered
ASC surgical procedures. In the CY 2013 OPPS/ASC final rule with
comment period (77 FR 68500), we finalized our proposal that the
standard ASC ratesetting methodology for this type of comparison would
use the ASC conversion factor that has been calculated using the full
ASC update adjusted for productivity. This is necessary so that the
resulting ASC payment indicator, based on the comparison, assigned to
these procedures or services is consistent for each HCPCS code,
regardless of whether
[[Page 44755]]
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 2022 OPPS/ASC final rules with comment
period we did not make any other changes to these policies. We propose
the continuation of these policies for CY 2023.
XVI. Requirements for the Rural Emergency Hospital Quality Reporting
(REHQR) Program
A. Background
1. Overview
We refer readers to section XIV of the CY 2020 OPPS/ASC final rule
with comment period (84 FR 61410) for a general overview of our
Hospital Outpatient Quality Reporting (OQR) program 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.
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 other quality programs for outpatient
settings including the Hospital OQR and the Ambulatory Surgical Center
Quality Reporting (ASCQR) Program.
2. Statutory History of Quality Reporting for REHs
The Consolidated Appropriations Act (CAA), 2021, was signed into
law in December 2020. In this legislation, Congress established a new
Medicare provider type: Rural Emergency Hospitals (REHs). Section 125
of Division CC of the CAA added section 1861(kkk) to the Social
Security Act (the Act). This section defines an REH as a facility that,
in relevant part, was as of December 27, 2020 a Critical Access
Hospital (CAH) or a subsection (d) hospital with not more than 50 beds
located in a county (or equivalent unit of local government) in a rural
area (defined in section 1886(d)(2)(D) of the Act) or was a subsection
(d) hospital with not more than 50 beds that was treated as being in a
rural area pursuant to section 1886(d)(8)(E) of the Act. Among other
requirements, an REH must apply for enrollment in the Medicare program,
provide emergency department services and observation care, and, at the
election of the REH, provide certain services furnished on an
outpatient basis, and not provide any acute care inpatient services
(other than post-hospital extended care services furnished in a
distinct part unit licensed as a skilled nursing facility (SNF)).
Payment with respect to REH services may be made on or after January 1,
2023. Generally, a subsection (d) hospital is an acute care hospital--
particularly one that receives payments under Medicare's inpatient
prospective payment system (IPPS) when providing covered inpatient
services to eligible beneficiaries. Similarly, a CAH is (as defined in
section 1820 of the Act) a facility with no more than 25 inpatient
beds, unless operating a psychiatric and/or a rehabilitation distinct
part unit which may have up to 10 beds each.
We refer readers to section XIX of this proposed rule for our
proposals with respect to payment policies, conditions of
participation, and provider enrollment for REHs.
Under section 1861(kkk)(7) of the Act, as added by section 125 of
Division CC of the CAA also requires the Secretary to establish quality
measurement reporting requirements for REHs, which may include the use
of a small number of claims-based measures or patient experience
surveys. An REH must submit quality measure data to the Secretary, and
the Secretary shall establish procedures to make the data available to
the public on a CMS website.
3. Scope
The number of hospitals that convert to an REH and their
characteristics may inform the selection of quality measures as we seek
measures that are useable by REHs and that have sufficient numbers of
REHs with sufficient volume of services to have meaningful measurement
for individual facilities and, importantly, the public. REHs as defined
by statute would be rural subsection (d) hospitals with not more than
50 beds and CAHs that convert in status to REHs. To estimate the number
of facilities that are likely to consider conversion to an REH, one
study \230\ analyzed 1,673 rural hospitals on three criteria: (1) 3-
years negative total margin; (2) average daily census of acute and
swing beds being less than three; and (3) net patient revenue less than
$20 million.\231\ The analysis concluded that 68 would consider
converting.\232\ In contrast, an industry analysis based on estimated
REH reimbursement and several financial assumptions \233\ and four
simulation methods, estimated that up to 600 CAHs would benefit from
conversion to REH status.\234\ Regardless of the exact number of
facilities which convert, there may be quality measure challenges due
to the low numbers of hospitals and volume of services provided by
these facilities. We discuss possible approaches for addressing these
low volume concerns in section XV.B.2.d of this proposed rule.
---------------------------------------------------------------------------
\230\ Pink, G.H., et al., How Many Hospitals Might Convert to a
Rural Emergency Hospital (REH) 8 (July 2021), available at https://www.shepscenter.unc.edu/download/23091/.
\231\ Ibid. at 5.
\232\ Ibid. at 1.
\233\ Estimated average facility payment, estimated outpatient
fee schedule payment, estimated average skilled nursing facility
payment rates by State, presence or loss of swing bed payments, and
continuance or cessation of 340B eligibility.
\234\ https://www.claconnect.com/resources/articles/2022/a-path-
forward-clas-simulations-on-rural-emergency-
hospitaldesignation#:~:text=Depending%20on%20resolution%20of%20key,be
nefit%20from%20the%20new%20designation (Accessed April 8, 2022).
---------------------------------------------------------------------------
B. REHQR Program Quality Measures
1. Considerations in the Selection of REHQR Program Quality Measures
We seek to adopt a concise set of important, impactful, reliable,
accurate, and clinically relevant measures for REHs that would inform
consumer decision-making regarding care and further quality improvement
efforts in the REH setting. In the CY 2022 OPPS/ASC proposed rule (86
FR 42285 through 42289), we sought comment
[[Page 44756]]
through a Request for Information on various topics on REHs.
Specifically, we sought input on the concerns of rural providers that
should be taken into consideration by CMS in establishing quality
measures and quality reporting requirements for REHs (86 FR 42288). We
include issues raised and suggestions made from that Request for
Information in this proposed rule as considerations for selecting
measures for an REH quality reporting program.
a. Measure Endorsement
Under section 1861(kkk)(7)(C)(i) of the Act, unless the exception
of subclause (ii) applies, a measure selected for the REHQR Program
must have been endorsed by the entity with a contract under section
1890(a) of the Act. The National Quality Forum (NQF) currently holds
this contract. Subclause (ii) provides that, in the case of a specified
area or medical topic determined appropriate by the Secretary for which
a measure has not been endorsed by the entity with contract under
section 1890(a) of the Act, the Secretary may specify a measure that is
not endorsed as long as due consideration is given to measures that
have been endorsed or adopted by a consensus organization identified by
the Secretary. In general, we prefer to adopt measures that have been
endorsed by the NQF because it is a national multi-stakeholder
organization with a well-documented and rigorous approach to consensus
development. However, due to lack of an endorsed measure for a given
facility setting, procedure, or other aspect of care, 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.
b. Accountability and Quality
The overarching goals of this program, in line with other quality
programs, are to improve the quality of care provided to beneficiaries,
facilitate public transparency, and ensure accountability. We note that
many subsection (d) hospitals and CAHs established on or before
December 27, 2020 that are eligible for REH conversion are currently
reporting outpatient quality data under the Hospital OQR Program and
have publicly available data. We note that while such reporting is
required for subsection (d) hospitals in order to avoid a payment
penalty under the Hospital OQR Program, data submission and public
reporting is voluntary for CAHs. We intend to adopt measures for the
REHQR Program that are useful for REHs for their quality improvement
efforts, but it is vital that measure information be of sufficient
volume to meet case thresholds for facility level public reporting. See
Tables 76 and 77 of this proposed rule for the current number of
facilities and their current public reporting of Hospital OQR Program
measure data as of January 2022 as well as the most recent data
available for certain measures that have been removed from the OQR
Program, but that may have continued relevance for an REHQR Program.
The Medicare Beneficiary Quality Improvement Project (MBQIP) under the
Medicare Rural Hospital Flexibility (Flex) program of the Health
Resources and Services Administration utilizes outpatient quality data
voluntarily reported by CAHs through the Hospital OQR Program. We note
that per the 2020 MBQIP Quality Measures annual report, 1,353 CAHs
(that is 86.5 percent of those eligible) reported data for at least one
OQR measure,\235\ which is greater than the number of facilities having
data displayed Table 77 due to the low reporting volume exclusion
limitation of Care Compare, indicating a greater capacity for these
facilities to report on certain Hospital OQR measures.\236\ Table 76
reflects data for reporting by rurally located subsection (d) hospitals
with not more than 50 beds, and Table 77 reflects data for reporting by
CAHs for the most recent Care Compare results available. These analyses
present a starting place for assessing the extent of quality reporting
by CAHs and small, rural hospitals for current or relatively recent
measures with sufficient data for public reporting that could be
considered for an REHQR Program.
---------------------------------------------------------------------------
\235\ https://www.flexmonitoring.org/sites/flexmonitoring.umn.edu/files/media/PA_Annual%20Report_2020.pdf
(Accessed June 5, 2022).
\236\ https://www.hrsa.gov/rural-health/grants/rural-hospitals/medicare-benificiary-quality-improvement (Accessed June 3, 2022).
---------------------------------------------------------------------------
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP26JY22.098
[[Page 44757]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.099
[[Page 44758]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.100
[[Page 44759]]
[GRAPHIC] [TIFF OMITTED] TP26JY22.101
BILLING CODE 4120-01-C
c. Burden
We recognize REHs will be smaller hospitals that have limited
resources compared with larger hospitals in metropolitan areas.\237\
Certain measures, particularly those that are chart-abstracted, may be
more burdensome than other measures to report. Rural facilities often
experience shortage of non-clinical staff to perform certain
administrative duties, such as collecting and reporting quality
measures.\238\ For the REHQR Program, we intend to seek balance between
the costs associated with reporting data and the benefits of ensuring
safety and quality of care through measurement and public reporting. We
recognize these challenges faced by the hospitals eligible to convert
to REH status may increase reporting burden and may necessitate
limiting the number of quality measures in use for the REH quality
reporting program to facilitate success. There are several avenues we
can consider for limiting this burden (that is, reducing the costs
associated with reporting the data required for quality measurement)
including: (1) use of Medicare claims-based measures; and (2) use
digital quality measures in place of chart-abstraction. In addition, we
believe that, to the extent possible, existing quality measures should
align across Medicare, Medicaid, and other payers to minimize reporting
burden. The Hospital Promoting Interoperability Program, which includes
a requirement to report certain eCQMs, shows that of 1,308 CAHs, 1,066
(81.5 percent) met eCQM reporting requirements for the first quarter of
2022. This indicates a relatively high level of reporting capability
for eCQMs by a hospital type that tends to be smaller and more likely
to be situated in more rural areas.
---------------------------------------------------------------------------
\237\ American Hospital Association, Rural Report 2019:
Challenges Facing Rural Communities and the Roadmap to Ensure Local
Access to High-quality, Affordable Care 3 (February 2019), available
at https://www.aha.org/system/files/2019-02/rural-report-2019.pdf.
\238\ Ibid at 6 & 7.
---------------------------------------------------------------------------
d. Rural Relevance
The measures included in an REH quality program should reflect the
types of services and care delivered most frequently in that setting,
along with areas of care where there may be inappropriate variation or
potential quality of care challenges.\239\ For example, an REH may
provide ambulatory and outpatient procedures with supporting diagnostic
services such as laboratory tests and x-rays, and be considered a low-
volume emergency department (ED). Larger variation between these
smaller providers due to lower case volumes could allow some topped out
measures that are no longer meaningful for larger or urban hospitals to
be utilized for rural hospital quality reporting. More specifically,
topped-out measures could be re-purposed for reporting the quality of
their rural counterparts, which have not achieved the level of success
in these measures as often as a result of low-case volumes. In
addition, we believe that it may be appropriate to include some
measures that would apply to all REHs, for example, measures that are
tailored to ED and observation services, while instituting additional
applicable measures for REHs that choose to provide additional
outpatient services.
---------------------------------------------------------------------------
\239\ National Quality Forum, Measure Application Partnership: A
Core Set of Rural Relevant Measures and Measuring and Improving
Access to Care, 2018 Recommendations from the MAP Rural Health
Workgroup, Final Report 24 & 26 (August 2018), available at https://www.qualityforum.org/Publications/2018/08/MAP_Rural_Health_Final_Report_-_2018.aspx.
---------------------------------------------------------------------------
e. Low Service and Patient Volume
Section 1861(kkk)(7)(C)(iii) of the Act specifies that the
Secretary shall, in the selection of measures, take into consideration
ways to account for rural emergency hospitals that lack sufficient case
volume to ensure that the performance rates for such measures are
reliable. Effective quality measurement requires a sufficiently large
patient number or services volume to account for level of measure
variability. This ensures that the quality measure has the necessary
reliability of an individual facility's information as well as to
detect
[[Page 44760]]
meaningful distinctions between facilities. Possible approaches to
quality measurement where low volume is expected are discussed in
section XV.B.2.d of this proposed rule.
f. Health Equity
We believe methods to examine disparities in health care delivery
and quality measurement should include stratified results using, for
example, patient dual eligibility and other social vulnerability
factors as well as patient demographic information to capture the
breadth of social determinants of health in rural areas.\240\ Other
factors or indicators to consider for equity measurement include access
to care, disability and functional status, veteran status, health
literacy, language preference, race and ethnicity, tribal membership,
sexual orientation and gender identity, and religious minority status.
These demographic characteristics and social determinants of health can
enable a more comprehensive assessment of health equity to further
identify and develop actionable strategies, including the selection of
quality measures and quality improvement, to promote health equity.
---------------------------------------------------------------------------
\240\ Agency for Healthcare Research and Quality, Chartbook on
Rural Healthcare: National Healthcare Quality and Disparities Report
8 &13-14 (November 2021) available at https://www.ahrq.gov/sites/default/files/wysiwyg/research/findings/nhqrdr/chartbooks/2019-qdr-rural-chartbook.pdf.
---------------------------------------------------------------------------
One approach being considered to measure equity across our programs
is the expansion of efforts to report quality measure results
stratified by patient social risk factors and demographic variables.
The Request for Information (RFI) included in the FY 2023 IPPS/LTCH PPS
proposed rule (87 FR 19415), titled ``Overarching Principles for
Measuring Healthcare Quality Disparities Across CMS Quality Programs''
describes key considerations across all CMS quality programs, including
the Hospital OQR Program, when advancing the use of measure
stratification to address health care disparities and advance health
equity across our programs.
We refer readers to the full RFI in the FY 2023 IPPS/LTCH PPS
proposed rule for details on these considerations (87 FR 19415); for
comments and feedback on the application of these principles to a
quality reporting program for REHs, please respond to this RFI.
We discuss possible measures of equity for use in a REHQR Program
in section XV.B.3 of this proposed rule.
2. Request for Comment on Potential Measures for an REHQR Program
a. Selected Hospital OQR Program Measures Recommended by the National
Advisory Committee on Rural Health and Human Services for the REHQR
Program
The National Advisory Committee on Rural Health and Human Services
for the REHQR Program's measure recommendations drew from measures that
were currently being reported or were recently reported under CMS'
Hospital OQR Program or HRSA's MBQIP.\241\ In this proposed rule, we
request comment on a selection of measures from this report as we
review measures for potential future inclusion in the REHQR Program. We
seek to better understand how these measures may help achieve our goal
of selecting measures for the REHQR Program that focus on REH areas of
care, especially ED care. Measures with an OP designation represent
current or past Hospital OQR measures; measure specifications are
contained in program specifications manuals (current and past back to
CY 2013) available on the QualityNet website.\242\
---------------------------------------------------------------------------
\241\ https://www.hrsa.gov/sites/default/files/hrsa/advisory-committees/rural/publications/2021-rural-emergency-hospital-policy-brief.pdf (Accessed April 8, 2022).
\242\ https://qualitynet.cms.gov/outpatient/specifications-manuals (Accessed May 20, 2022).
---------------------------------------------------------------------------
(1) OP-2: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival
This chart-abstracted process measure calculates the percentage of
ED acute myocardial AMI patients with ST-segment elevation on the
electrocardiogram (ECG) closest to arrival time receiving fibrinolytic
therapy during the ED stay and having a time from ED arrival to
fibrinolysis of 30 minutes or less. The measure is calculated using
chart-abstracted data, on a rolling, quarterly basis and is publicly
reported, in aggregate, for one calendar year. We have publicly
reported this measure under the Hospital OQR Program since 2012. In the
CY 2022 OPP/ASC final rule (86 FR 63823 through 63824), OP-2 was
finalized for removal from the Hospital OQR Program beginning with the
CY 2023 reporting period/CY 2025 payment determination, with planned
replacement with an electronic clinical quality measure (eCQM) that
combines this measure with OP-3 Median Time to Transfer to Another
Facility for Acute Coronary Intervention, the ST-Segment Elevation
Myocardial Infarction (STEMI) eCQM (86 FR 63823 through 63824). The
adoption of the STEMI eCQM and the measure calculation method for the
Hospital OQR Program was finalized in this same final rule (86 FR 63837
through 63840). The current level of rurally located subsection (d)
hospitals with not more than 50 beds (4 total) and CAHs (5 total) with
data publicly displayed on Care Compare for this measure is relatively
low (see Table 77 and 77 of this proposed rule). However, the MBQIP
(which utilizes data reported through the Hospital OQR Program)
reported that about 71 percent of CAHs reported at least one case for
the OP-2 measure.
(2) OP-3: Median Time To Transfer to Another Facility for Acute
Coronary Intervention
Time to transfer to receiving facilities delays time to reperfusion
in patients with ST segment elevation myocardial infarction (STEMI).
There are multiple, critical system practices that minimize transfer
time to receiving centers; however, two characteristics of the sending
facility have been noted as most important: performance of a
prehospital electrocardiogram and having established transfer
protocols.\243\ The use of time-to-transfer quality measures in rural
areas may raise equity concerns as the geographic isolation of many
rural facilities and the lack of uniformity in geographic isolation may
be outside the control of the facilities measured.
---------------------------------------------------------------------------
\243\ Mumma, BE, Williamson, C, Diercks, DB. Minimizing transfer
time to an ST segment elevation myocardial infarction receiving
center: Modified Delphi Consensus. Crit Pathw Cardiol 2014, Mar;
13(1):20-24.
---------------------------------------------------------------------------
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63458), OP-3 was finalized for removal from the Hospital OQR Program
beginning with the CY 2023 reporting period/CY 2025 payment
determination due to availability of a more broadly applicable measure
that captures the OP-2 and OP-3 measure populations and expand beyond
these populations to comprehensively measure the timeliness and
appropriateness of STEMI care, with planned replacement of these
measures by an eCQM. The current level of subsection (d) hospitals and
CAHs with data publicly displayed on Care Compare for this chart-
abstracted measure is relatively low possibly due to case numbers below
the threshold to allow the data to be publicly reported (see Tables 76
and 77 of this proposed rule). About 70 percent of CAHs reported at
least one case for this measure through the MBQIP program.
We invite public comment on potential future adoption of OP-3 and
[[Page 44761]]
its replacement STEMI eCQM for the REHQR Quality Reporting Program.
(3) OP-4: Aspirin on Arrival
This chart-abstracted process measure documents the percentage of
ED acute myocardial infarction (AMI) patients or chest pain patients
(with probable cardiac chest pain) without aspirin contraindications
who received aspirin within 24 hours before ED arrival or prior to
transfer at the facility level. The early use of aspirin in patients
with AMI results in a significant reduction in adverse events and
subsequent mortality. OP-4 was implemented into the Hospital OQR
program in CY 2008 and removed for the CY 2020 payment determination
and subsequent years due to performance being sufficiently high with
little variation between providers (82 FR 52570).
While being topped out at the national level and no longer useful
for larger or urban providers, this measure could be useful for smaller
providers, including those that may convert to REH status, due to
sufficient variation between individual facilities to permit the
measurement of differences. An analysis (Table 78) of the last publicly
reported OP-4 data for small rurally located hospitals and CAHs shows
such variation between facilities (both urban and rural) with the lower
10th percentile. The analysis found providers with much lower
percentages of proper aspirin administration across urban/rural areas
for CAHs and subsection (d) hospital types and slightly higher
variation as measured by standard deviation, indicating room for
improvement. We note that some CAHs, while considered rural for
Medicare payment purposes, are situated in areas that can be considered
urban. The analysis in Table 78 is only to examine for variations by
urban versus rural setting. This measure was retired and NQF
endorsement removed from the Cardiovascular Project in 2013 with
subsequent removal from the Hospital OQR Program for the CY 2018
reporting period/CY 2020 payment determination. A similar measure,
Emergency Medicine: Aspirin at Arrival for Acute Myocardial Infarction
(AMI) was also retired and NQF endorsement removed in 2017 (82 FR
59439).
[GRAPHIC] [TIFF OMITTED] TP26JY22.102
(4) OP-18: Median Time From ED Arrival to ED Departure for Discharged
ED Patients
Care provided in the ED will be a focus of REH services and we seek
measures that assess the quality of care in this setting. OP-18 is a
chart-abstracted measure that evaluates the time between the arrival to
and departure from the ED or ED throughput time. Improving ED
throughput times is important for alleviating overcrowding and reducing
wait times; conditions which can lead to potential safety events and
patient dissatisfaction.\244\ OP-18 is a current measure for the
Hospital OQR Program and reporting for this measure by hospitals
eligible to convert to REH status is relatively high (see Table 76 of
this proposed rule). Note that the OP-18 measure is calculated for
varying types of patients: the OP-18b measure excludes psychiatric/
mental health and transferred patients; alternatively, the OP-18c
measure includes information only for psychiatric/mental health
patients.
---------------------------------------------------------------------------
\244\ https://www.healthcatalyst.com/wp-content/uploads/2021/05/Data-Driven-Operations-Improve-ED-Efficiency.pdf.
---------------------------------------------------------------------------
(5) OP-20: Door to Diagnostic Evaluation by a Qualified Medical
Professional
This chart-abstracted, ED measure measures the mean time between
patient presentation to the ED and the first moment the patient is seen
by a qualified medical person for patient evaluation and management. As
REH's main area of care and associated services provided will be
related to their ED, and emergency services can be time-sensitive, this
measure provides tailored accountability for this setting type. OP-20
was removed from the Hospital OQR Program in the CY 2018 OPPS/ASC final
rule beginning with CY 2020 payment
[[Page 44762]]
determinations (82 FR 52570). During regular measure maintenance,
specific concerns were raised by a Technical Expert Panel resulting in
removal of this measure from the Hospital OQR Program due to measure
performance or improvement not resulting in better patient outcome (82
FR 59431)). However, while some commenters agreed with this reasoning,
other commenters expressed concern that there are socioeconomic
pressures that can vary by community that cause variation in
performance on this measure, noted the value of this measure, and
recommended that a refined version that stratifies by other factors
related to measure performance, specifically mentioning hospital size
which would be more effective in a specific setting (82 FR 59431). When
required for the Hospital OQR Program, a significant number of
hospitals eligible for REH conversion that had data publicly reported
had sufficient case volumes to have publicly reported data for this
measure; 70.69 percent (82) of hospitals and 51.93 percent (445) of
CAHs that had any measure publicly reported indicating possible
usefulness of this measure for REHs.
(6) OP-22: Left Without Being Seen
This structural measure for the ED setting is focused on reflecting
staffing expertise and availability. OP-22 measures the percentage of
patients who left the ED before being evaluated by a physician,
advanced practice nurse (APN), or physician assistant (PA) and uses
all-payer, administrative data (not Medicare claims data) to determine
the measure's numerator and denominator populations. This measure is in
the current Hospital OQR Program measure set with significant numbers
of both hospitals and CAHs eligible for REH conversion that have
publicly reported data for this measure.
We request comment on these selected Hospital OQR Program measures
that were recommended by the National Advisory Committee on Rural
Health and Human Services for their use in a REHQR Program.
b. Medicare Beneficiary Quality Improvement Project (MBQIP) Measure
Recommended by the National Advisory Committee on Rural Health and
Human Services for the REHQR Program
The MBQIP is a quality improvement activity under the Medicare
Rural Hospital Flexibility (Flex) program. The MBQIP supports more than
1,350 CAHs in 45 states to improve quality of care. Measures included
in the MBQIP that are also included in our selection of measures from
those by the National Advisory Committee on Rural Health and Human
Services for the REHQR Program (above) are OP-2: Fibrinolytic Therapy
Received Within 30 Minutes of ED Arrival, OP-3: Median Time to Transfer
to Another Facility for Acute Coronary Intervention, OP-18: Median Time
from ED Arrival to ED departure for Discharged ED Patients, and OP-22:
Left Without Being Seen.
The Emergency Department Transfer Communications (EDTC) measure is
a core measure in the MBQIP program for CAHs and was included in those
measures recommended by the National Advisory Committee on Rural Health
and Human Services for their use in a REHQR Program. The EDTC measure
assesses how well key patient information is communicated from an ED to
any health care facility. The measure is applicable to patients with a
wide range of medical conditions (that is, acute myocardial infarction
(AMI), heart failure, pneumonia, respiratory compromise, and trauma)
and is relevant for both internal quality improvement purposes and
external reporting to consumers and purchasers.\245\ As REHs are
expected to focus on triage and transfer, the adequate and timely
sharing of information with the receiving site would be an important
quality metric.
---------------------------------------------------------------------------
\245\ https://www.ruralcenter.org/resource-library/edtc-measure-data-reporting-resources (Accessed May 12 2022).
---------------------------------------------------------------------------
We request comment on the EDTC measure for use in a REHQR Program.
c. Other Current, Claims-Based Hospital OQR Quality Measures
Measures calculated using administrative data from Medicare claims
and enrollment data limit provider burden and provide valuable
information regarding Medicare beneficiary service utilization and care
provision. The Hospital OQR Program has several established measures of
this type that could be applicable to REHs. At this time, we are
focusing on two current measures that have publicly reported data and
that focus on services expected to be provided by hospitals eligible
for REH conversion: OP-10 Abdomen Computed Tomography (CT)--Use of
Contrast Material and OP-32: Facility 7-Day Risk-Standardized Hospital
Visit Rate after Outpatient Colonoscopy.
(1) OP-10: Abdomen Computed Tomography (CT)--Use of Contrast Material
This diagnostic imaging measure is based fully on Medicare fee-for-
service (FFS) claims and enrollment data. It calculates the percentage
of CT abdomen studies performed with and without contrast out of all CT
abdomen studies performed (those without contrast, those with contrast,
and those with both). A CT study performed with and without contrast
doubles the radiation dose to patients, exposing them to the potential
harmful side effects of the contrast material itself.\246\ Davis et al.
(2020) showed that while rural facilities account for 32.2 percent of
all facilities, they account for 46.0 percent of the outliers for the
OP-10 measure. This indicates considerable variation and possible areas
for targeted improvement.
---------------------------------------------------------------------------
\246\ Davis M, McKiernan C, Lama, S, Parzynski C, Bruetman C,
Venkatesh A. Trends in publicly reported quality measures of
hospital imaging efficiency, 2011-2018. AJR: 215, July: 153-158),
2020.
---------------------------------------------------------------------------
(2) OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate After
Outpatient Colonoscopy
This outcome measure is calculated fully using Medicare FFS claims
and enrollment data, estimating a facility-level rate of risk
standardized, all-cause, unplanned hospital visits within 7 days of an
outpatient colonoscopy among Medicare FFS patients aged 65 years and
older. OP-32 captures and makes more visible to providers and patients
all unplanned hospital visits following colonoscopy procedures. Under
the Hospital OQR program, of the hospitals eligible for REH conversion
that had sufficient case volumes to have publicly reported data for
this measure, 65.43 percent (123) of hospitals and 46.16 percent (625)
of CAHs had any publicly reported data. While the total numbers of
hospitals with publicly reported OP-32 data is somewhat low, this could
be an important measure for those REHs providing outpatient services
and for patients seeking information regarding complications following
this procedure. OP-32 was adopted in the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66963) for the CY 2018 payment determination
and subsequent years using CY 2016 data for the initial year's measure
calculation.
d. Request for Comment on Additional Measurement Topics and for
Suggested Measures for REH Quality Reporting
Our request for information in the CY 2022 OPPS/ASC proposed rule
yielded suggested additional topics for quality measures appropriate to
the REH setting. We request comment on the below additional topics and
request suggestions for specific measures to assess the patient
experience, outcome, and processes related to these topics. In
[[Page 44763]]
addition, we request comment on other potential topics not listed that
would be applicable to an REH quality reporting program.
(1) Telehealth
REHs can utilize telehealth and other remote service capacities in
serving rural communities in their vicinity. Under the COVID-19 PHE,
temporary measures to facilitate the provision and receipt of care
through telehealth were federally implemented.\247\ Additionally,
section 301 of Division P of the Consolidated Appropriations Act (CAA),
2022 extended certain telehealth flexibilities for Medicare patients
for 151 days after the official end of the Federal public health
emergency (PHE).\248\ The PHE was most recently extended on April 12,
2022, effective April 16, 2022, to July 15, 2022.\249\ Section 301 of
the CAA, 2022 permits certain Medicare beneficiaries to receive
telehealth services from their home. This and other flexibilities will
facilitate the use of telehealth for 151 days after the expiration of
the PHE in rural areas.\250\
---------------------------------------------------------------------------
\247\ http://telehealth.hhs.gov (Accessed April 8, 2022).
\248\ Public Law 117-103.
\249\ https://aspr.hhs.gov/legal/PHE/Pages/COVID19-12Apr2022.aspx (Accessed May 12, 2022).
\250\ https://www.foley.com/en/insights/publications/2022/03/congress-extends-telehealth-flexibilities-7-things (Accessed April
13, 2022).
---------------------------------------------------------------------------
In addition, rural emergency telehealth services present unique
opportunities for access to quality care in these often time-sensitive
and geographically isolated cases. For instance, utilizing provider-to-
provider telehealth or telemedicine support, such as in the case of e-
consultation or tele-emergency care services, in a rural emergency
department could allow for critical specialist knowledge transfer and
reduce patient transfers and wait times.\251\ This is particularly
impactful in the face of rural facility or departmental closures which
can leave gaps in healthcare service access and could contribute or
lead to emergency service requirements, such as in the case of
obstetric challenges.\252\
---------------------------------------------------------------------------
\251\ https://telehealth.hhs.gov/providers/telehealth-for-emergency-departments/ (Accessed May 31, 2022).
\252\ Centers for Medicare & Medicaid Services (CMS), Advancing
Rural Maternity Health Equity, 10 (May 2022), available at https://www.cms.gov/files/document/maternal-health-may-2022.pdf.
---------------------------------------------------------------------------
We seek public comment on potential future quality measures
development to address quality of care using telehealth services in
rural and rural emergency settings; as well as, on the ways in which
REHs could utilize telehealth and telemedicine to bridge both gaps in
expertise and distance to render quality care services.
(2) Maternal Health
Nearly half of rural U.S. counties lack hospitals with basic
capacity to provide emergency obstetric services. In New Mexico, for
example, one-third of deaths during pregnancy and in the first year
postpartum are from car accidents with increasing maternal mortality
and morbidities in rural areas of the State.\253\ Similarly, the
Illinois Morbidity and Mortality Report identified 175 pregnancy-
associated deaths that occurred during 2016-2017 and revealed that the
number of pregnancy-associated deaths per 100,000 live births was
higher in rural counties.\254\ This report identified the greatest (33
percent) underlying cause of pregnancy-associated death in rural
counties was attributed to ``other injuries'', most of which was the
result of motor vehicle crashes, as opposed to `all medical' (31
percent), drug overdose (21 percent), suicide (10 percent), or homicide
(5 percent).\255\ This was in contrast with the 4 percent to 10 percent
of this category's attribution in the non-rural areas.\256\
---------------------------------------------------------------------------
\253\ The Commonwealth Fund. Restoring Access to Maternity Care
in Rural America. September 30, 2021. https://www.commonwealthfund.org/publications/2021/sep/restoring-access-maternity-care-rural-america (Accessed April 8, 2022).
\254\ Illinois Department of Public Health, Illinois Maternal
Morbidity and Mortality Report, 2016-2017 25 (April 2021), available
at https://dph.illinois.gov/content/dam/soi/en/web/idph/files/maternalmorbiditymortalityreport0421.pdf.
\255\ Ibid. at 28.
\256\ Ibid. at 28.
---------------------------------------------------------------------------
REHs could provide valuable emergency care and other outpatient
services for preserving and improving maternal health in rural areas,
such as providing outpatient OB services in ``OB deserts''.\257\ REHs
could also leverage remote patient monitoring. This could include
implementing telehealth systems to ensure engagement and timely
notification and care among high-risk patients, while also reducing
barriers to care, like distance and travel.\258\ In addition, REHs
could possibly fill gaps in the maternity care continuum, or play a
critical role in a patient's emergency plan by being identified as
their closest medical facility equipped to handle a maternal health
emergency.\259\
---------------------------------------------------------------------------
\257\ https://telehealth.hhs.gov/providers/telehealth-for-maternal-health-services/bridging-the-gaps-with-telehealth/
(Accessed May 31, 2022).
\258\ https://telehealth.hhs.gov/providers/telehealth-for-maternal-health-services/telehealth-and-high-risk-pregnancy/
(Accessed May 31, 2022).
\259\ https://telehealth.hhs.gov/providers/telehealth-for-maternal-health-services/preparing-patients-and-providers/ (Accessed
May 31, 2022).
---------------------------------------------------------------------------
We seek public comment on potential future quality measures for
maternal health services in rural and rural emergency settings, and on
the ways in which REHs could utilize telehealth and telemedicine to
bridge both gaps in expertise and distance to render quality maternal
health care services.
(3) Mental Health
Rural populations are disproportionately affected by mental health
concerns including substance use disorders.260 261 For
example, suicide rates and drug overdose related deaths are especially
on the rise among the rural population.262 263 Roughly 6.5
million individuals, or about one-fifth of the rural population, had a
mental illness in 2019.\264\ While rates of mental illness and
substance use disorder between rural and urban areas are comparable,
serious mental illness (SMI) was found to be 1.7 percent greater for
rural adults 18 and older than their urban counterparts.\265\
Contributing to this problem is the presence of contextual and cultural
factors, such as stigma, isolation, and poverty, and the lack of access
to trained and specialized mental health providers, with over 60
percent of rural Americans living within a designated shortage
area.\266\ There are also higher reported rates of prescription opioid
misuse among rural residents, but
[[Page 44764]]
reduced availability of outpatient substance use treatment services,
with nearly four times greater likelihood of availability in urban
areas than in rural areas.\267\
---------------------------------------------------------------------------
\260\ White B.G. (2015 January 28). Rural America's Silent
Housing Crisis. The Atlantic. Retrieved from: https://www.theatlantic.com/business/archive/2015/01/rural-americas-silent-housing-crisis/384885.
\261\ Shawnda S. (2017 November). Rural Behavioral Health. Rural
Health Research RECAP. Retrieved from: https://www.ruralhealthresearch.org/assets/658-1990/rural-behavioral-health-recap.pdf.
\262\ Centers for Disease Control and Prevention. (2018 February
28). Drug Overdose in Rural America. Retrieved from: https://www.cdc.gov/ruralhealth/drug-overdose/index.html.
\263\ Centers for Disease Control and Prevention. (2018 March
22). Suicide Policy Brief: Preventing Suicide in Rural America.
Retrieved from: https://www.cdc.gov/ruralhealth/suicide/policybrief.html.
\264\ Morales, D.A., Barksdale, C.L., & Beckel-Mitchener, A.C.
(2020). A call to action to address rural mental health disparities.
Journal of clinical and translational science, 4(5), 463-467.
https://doi.org/10.1017/cts.2020.42.
\265\ Neylon, K.A. (2020). Strategies for the Delivery of
Behavioral Health Crisis Services in Rural and Frontier Areas of the
U.S. Alexandria, VA: National Association of State Mental Health
Program Directors.
\266\ Morales, D.A., Barksdale, C.L., & Beckel-Mitchener, A.C.
(2020). A call to action to address rural mental health disparities.
Journal of clinical and translational science, 4(5), 463-467.
https://doi.org/10.1017/cts.2020.42.
\267\ In Brief: Rural Behavioral Health: Telehealth Challenges
and Opportunities, SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES
ADMINISTRATION, (Nov. 2016) https://store.samhsa.gov/product/In-Brief-Rural-BehavioralHealth-Telehealth-Challenges-and-Opportunities/SMA16-4989.
---------------------------------------------------------------------------
These high rates of mental health and substance use issues,
compounded by lack of access to treatment, underscores the need for an
array of behavioral health crisis services in rural areas. REHs could
fill this need by providing valuable emergency care and other
outpatient services for patients experiencing mental health and
substance use crises, and possibly bridging the gaps in the continuum
of care. For example, REHs could use telehealth services to reduce care
delays,\268\ or offer teletherapies which can reduce stigma and privacy
concerns.\269\
---------------------------------------------------------------------------
\268\ https://telehealth.hhs.gov/providers/telehealth-for-behavioral-health/tele-treatment-for-substance-use-disorders/
(Accessed May 31, 2022).
\269\ https://telehealth.hhs.gov/providers/telehealth-for-behavioral-health/individual-teletherapy/ (Accessed May 31, 2022).
---------------------------------------------------------------------------
We seek public comment on potential future quality measures for
behavioral health services in rural and rural emergency settings, and
on the ways in which REHs could utilize telehealth and telemedicine to
bridge both gaps in expertise and distance to render quality behavioral
health care services.
(4) ED Services
Emergency departments and the services provided in this setting are
expected to be a focus of REHs. OP-18: Median Time from ED Arrival to
ED departure for Discharged ED Patients, OP-20: Door to Diagnostic
Evaluation by a Qualified Medical Professional, and OP-22: Left Without
Being Seen, for example, all measure important aspects of ED care.
ED utilization is another important aspect of ED care and quality
measures for Medicare Advantage plans as well as for Medicaid
beneficiaries point to this. The Emergency Department Utilization (EDU)
Health Effectiveness Data and Information Set (HEDIS) measure assesses
ED utilization among Medicare Advantage (18 and older) beneficiaries
through an observed-to-expected ratio.\270\ For this measure, Medicare
Advantage plans report observed rates of ED use and a predicted rate of
ED use based on the health of their member population and factors.\271\
Similarly, we recently sought stakeholder comments on a Medicaid
measure under development, the All-Cause ED Utilization for Medicaid
Beneficiaries measure.\272\ This measure is defined as the number of
all-cause ED visits per 1,000 beneficiary months among Medicaid
beneficiaries aged 18 years and older with at least 10 months of
enrollment.
---------------------------------------------------------------------------
\270\ All-Cause Emergency Department (ED) Utilization for
Medicaid Beneficiaries Public Comment Framing Document. https://cmit.cms.gov/cmit/#/MeasureView?variantId=4867§ionNumber=1
(Accessed April 8, 2022).
\271\ We note that we would not be seeking to propose measures
that have been developed for Medicare Advantage plans or for
Medicaid beneficiaries as developed for an REHQR Program; we intend
only to illustrate that ED utilization is considered an important
area for quality measurement.
\272\ https://www.cms.gov/files/document/all-cause-ed-utilization-medicaid-beneficiaries-measure-framing-document.pdf
(Accessed April 7, 2022).
---------------------------------------------------------------------------
A patient who returns for an unscheduled visit to the emergency
department (ED) shortly after initial discharge (that is, within 2-30
days) is called a ``bounce-back.'' \273\ ED bounce-backs are associated
with ED facility and ED patient metrics, including quality of care,
patient insurance status, patient age, ED overcrowding and patient
satisfaction, or an unscheduled return visit. Measures for ED
utilization, boarding, and unscheduled ED return visits (bounce-backs)
could be useful quality metrics for the REH setting.
---------------------------------------------------------------------------
\273\ Curcio J, Little A, Bolyard C, et al. (September 17, 2020)
Emergency Department ``Bounce-Back'' Rates as a Function of
Emergency Medicine Training Year. Cureus 12(9): e10503. https://doi.org/10.7759/cureus.10503.
---------------------------------------------------------------------------
We seek public comment on potential future quality measures for
emergency care services in rural and rural emergency settings, and on
the ways in which REHs could utilize telehealth and telemedicine to
bridge both gaps in expertise and distance to render quality of care.
(5) Equity
Rural populations, among others, face historic and current
disproportionate health impacts that have resulted in the higher
prevalence, increased risk, and greater barriers to care for medical
conditions.\274\ The Hospital Commitment to Health Equity measure,\275\
which we have proposed in the FY 2023 IPPS rule for the Hospital
Inpatient Quality Reporting program, has five attestation-based
questions that each represent a domain of commitment to health equity:
strategic planning, data collection, data analysis, quality
improvement, and leadership engagement. Additionally, a potential
future measure for health equity could be an attestation-based
structural measure of a disparities impact statement (DIS) or
organizational pledge that outlines how infrastructure supports the
delivery of care that is equitable for all patient populations could
provide important information regarding organizational commitment to
health equity.
---------------------------------------------------------------------------
\274\ https://www.cdc.gov/ruralhealth/about.html (Accessed June
2, 2022).
\275\ Centers for Medicare and Medicaid Services (CMS), Summary
of Technical Expert Panel (TEP) Meeting # 1, November 16, 2021:
Health Equity Quality Measurement, Hospital Commitment to Health
Equity Measure, 2016-2017 (February 2022), available at https://www.cms.gov/files/document/health-equity-quality-measurement-tep-1-summary-report-hospital-commitment-health-equity.pdf.
---------------------------------------------------------------------------
We seek public comment on potential future quality measures for
health equity in rural and rural emergency settings, and on the ways in
which REHs could utilize telehealth and telemedicine to bridge both
gaps in expertise and distance to render equitable, quality of care.
e. Addressing Concerns Regarding Small Case Numbers
There are significant methodological challenges with measurement in
rural and low-volume settings. Measure reliability and validity often
hinge on having a sufficient volume of cases to ensure the reported
rates are reliable. Determining appropriate approaches to addressing
low-volume measurement issues will be imperative for public reporting
of REH data given expected low volume of these facilities as evidenced
by the numbers of rurally located subsection (d) hospitals with not
more than 50 beds and CAHs with sufficient case numbers to have data
publicly available on Care Compare. The NQF most recently provided
expert panel recommendations for addressing the low volume challenge
for performance measurement of rural providers in 2019.\276\ The panel
recommends, to the extent possible, to ``borrow strength'' (that is, to
aggregate measured data over longer timeframes to ensure sufficient
data collection for analysis) and leverage expertise and statistical
methodology suited to this type of collection. These approaches have
been used to model the number of facilities that could achieve
sufficient measure volume to produce reliable
[[Page 44765]]
quality measures based on Medicare Fee-For-Service (FFS) claims.
---------------------------------------------------------------------------
\276\ National Quality Forum, Addressing Low Case-Volume in
Healthcare Performance Measurement of Rural Providers:
Recommendations from the MAP Rural Health Technical Expert Panel,
Final Report 3 (March 2019) available at https://www.qualityforum.org/Publications/2019/04/MAP_2019_Recommendations_from_the_Rural_Health_Technical_Expert_Panel_Final_Report.aspx.
---------------------------------------------------------------------------
Another panel recommendation is to report exceedance probabilities
as an alternate to reporting absolute performance values. An exceedance
probability is the probability that a certain value will be exceeded in
a predefined future time period; it is often used for predicting the
probability of an event. This approach would better reflect the
uncertainty of observed quality measure results.\277\ For example, an
exceedance probability statement might be: ``We can be 84 percent sure
that hospital A is performing above the mean on this particular
measure.''
---------------------------------------------------------------------------
\277\ Shwartz M, Pek[ouml]z EA, Burgess JF Jr, Christiansen CL,
Rosen AK, Berlowitz D. A probability metric for identifying high-
performing facilities: An application for pay-for performance
programs. Med Care. 2014 Dec; 52(2):1030-1036.
---------------------------------------------------------------------------
We request comment on these recommendations for addressing the low
volume issues for performance measurement of rural providers.
C. Quality Reporting Requirements Under the REH Quality Reporting
(REHQR) Program
1. Administrative Requirements
Section 1861(kkk)(7)(B)(i) of the Act provides that, with respect
to each year beginning with 2023, (or each year beginning on or after
the date that is 1 year after one or more measures are first specified
under subparagraph (C)), a rural emergency hospital shall submit data
to the Secretary in accordance with clause (ii). Clause (ii) states
that, with respect to each such year, a rural emergency hospital shall
submit to the Secretary data in a form and manner, and at a time,
specified by the Secretary for purposes of this subparagraph. In this
section of the proposed rule, we propose foundational administrative
requirements for REHs participating in the REHQR Program.
2. Requirements for Registration on QualityNet and Security Official
(SO)
We currently use the CMS QualityNet Secure Portal (referred to as
the Hospital Quality Reporting (HQR) secure portal) to host our CMS
online data submission tool. To submit quality measure data to CMS
using the HQR system, a hospital must establish a secure account
through the QualityNet website and designate a Security Official (SO).
For more information regarding the HQR system, we refer readers to CY
2022 OPPS/ASC final rule with comment period (85 FR 86179), as well as
https://qualitynet.cms.gov. An SO must establish user account(s) for
the purpose of submitting quality measure data to the HQR system, as
well as for authorized users to review and correct data submissions and
preview measure information prior to public reporting. The term SO
refers to the individual(s) who have responsibilities for security and
account management requirements for a facility (85 FR 86182).
Hospitals that currently report quality measure data under CMS
quality programs including, but not limited to, the Hospital IQR and
Hospital OQR Programs have existing QualityNet accounts. For the CY
2022 payment determination under the Hospital OQR Program, 3,268
hospitals met all reporting requirements including data submission,
whereas, only 30 hospitals did not meet all requirements.\278\ In
addition, of 1,354 CAHs, 1,291 reported data through the Hospital OQR
Program. Thus, the vast majority of all subsection (d) hospitals and
CAHs have an account for reporting data via the HQR system. The
QualityNet and SO registration process should therefore be familiar to
many hospitals that convert to being an REH. Thus, we propose that for
an REH to participate in the REHQR Program, they must: (1) have an
account for the purpose of submitting data to the HQR system. If an REH
already has an account for a CMS hospital quality reporting program,
the REH can fulfill this requirement by updating its existing account
with its new REH CMS Certification Number (CCN). If the REH does not
have an account, we are proposing that it must register a new account.
Once an REH has an account, it must then (2) have an SO. Since
hospitals in the REHQR Program will have new REH CCNs, these hospitals
would have to request SO access for the new CCN following the standard
instructions posted on the QualityNet website.
---------------------------------------------------------------------------
\278\ https://qualitynet.cms.gov/outpatient/oqr/apu.
---------------------------------------------------------------------------
From our experience, an SO typically fulfills a variety of
responsibilities related to quality reporting such as creating,
approving, editing, and terminating user accounts within an
organization, and monitoring account usage to maintain proper security
and confidentiality protocols. While an SO is initially required to
enable a hospital's QualityNet account for data submission and allows
the set-up of basic user accounts with capabilities including data
submission, it will not be necessary or required to maintain an SO. We
highly recommend that hospitals have and maintain a Security Official;
though after initial set-up, we reiterate, an SO would not be required.
We invite public comment on this proposal. We intend to propose
additional administrative requirements for the REHQR Program in
subsequent rulemaking.
XVII. Organ Acquisition Payment Policy
A. Background of Organ Acquisition Payment Policies
The Medicare Program supports organ transplantation by providing an
equitable \279\ means of payment for the variety of organ acquisition
services. Medicare excludes organ acquisition costs from the inpatient
hospital prospective diagnosis-related group (DRG) payment for an organ
transplant, and separately \280\ reimburses transplant hospitals \281\
(THs) for their organ acquisition costs under reasonable cost
principles \282\ under section 1861(v) of the Act, based on the TH's
ratio of Medicare usable organs to total usable organs. Medicare
authorizes payment to designated independent organ procurement
organizations (IOPOs) for kidney acquisition costs, under reasonable
cost principles \283\ in accordance with section 1861(v) of the Act,
based on the IOPO's ratio of Medicare usable kidneys to total usable
kidneys (see section 1881(b)(2)(A) of the Act). In accordance with 42
CFR 413.24(f), Medicare requires THs and IOPOs to complete a Medicare
cost report \284\ on an annual basis.
---------------------------------------------------------------------------
\279\ In this context ``equitable'' means fair and equal to all
parties. Medicare recognizes that organ acquisition costs can vary
among patients due to different levels of acuity, clinical factors
and genetic make-up. Some patients may require different or
additional testing and care during the organ acquisition process.
Payment under reasonable cost accounts for these differences and
ensures that providers are paid appropriately for their share of
organ acquisition costs.
\280\ 42 CFR 412.2(e)(4) and 412.113(d).
\281\ Under 42 CFR 482.70, a transplant hospital is a hospital
that furnishes organ transplants and other medical and surgical
specialty services required for the care of transplant patients.
\282\ See 42 CFR 412.113(d); HCFA Ruling 87-1 (April 1987); CMS
Ruling 1543-R (December 2006).
\283\ Id. Section 1138(b)(1)(F) of the Act; 42 CFR
413.1(a)(1)(ii)(A); 413.420(a).
\284\ THs complete the hospital cost report on the CMS 2552-10
(OMB No. 0938-0050) and IOPOs complete their cost report on the CMS-
216-94 (OMB No. 0938-0102).
---------------------------------------------------------------------------
In the FY 2022 Inpatient Prospective Payment System (IPPS)/Long
Term Care Hospital (LTCH) PPS proposed rule (86 FR 25070), which
appeared in the Federal Register on May 10, 2021, we explained the
background and history of Medicare's organ acquisition payment policy
and proposed to change, clarify, and codify Medicare organ acquisition
payment policies relative to OPOs,\285\
[[Page 44766]]
THs, and donor community hospitals. We proposed to change the manner in
which an organ is counted as a Medicare usable organ for purposes of
calculating Medicare's share of organ acquisition costs by counting
only organs transplanted into Medicare beneficiaries. We also proposed
to codify that Medicare does not share in the costs to procure organs
used for research, except where explicitly required by law. In
addition, we proposed to require donor community (not transplant)
hospitals to bill OPOs their customary charges reduced to costs for
services provided to deceased organ donors.
---------------------------------------------------------------------------
\285\ We refer to organ procurement organizations generally as
``OPOs'' throughout, unless differentiation of IOPO is required for
cost reporting purposes for OPOs that file a cost report on the CMS-
216-94 (OMB No. 0938-0102).
---------------------------------------------------------------------------
In the FY 2022 IPPS/LTCH PPS final rule with comment period (86 FR
73416), which appeared in the Federal Register on December 27, 2021, we
responded to public comments on the proposed rule, and finalized
certain proposals to codify longstanding Medicare organ acquisition
payment policies, with some modifications, in new subpart L of part
413. We finalized at Sec. 413.418 proposals with respect to donor
community hospitals and THs' charges for hospital services provided to
deceased donors. We also finalized our proposal to move existing organ
acquisition payment regulations, and portions of existing kidney
acquisition regulations, within title 42 of CFR part 412, subpart G,
and part 413, subpart H, to a new subpart L in part 413, so that all
organ acquisition payment policies would be housed together.
We did not finalize our proposal to count as Medicare usable organs
only organs transplanted into Medicare beneficiaries. We also did not
finalize certain provisions of the proposed policy with respect to
counting organs procured for research for purposes of calculating
Medicare's share of organ acquisition costs. In the FY 2022 IPPS/LTCH
PPS final rule with comment period, we stated that due to the nature of
the public comments received, we would address the organ counting
policy in subsequent rulemaking, as appropriate.
In this proposed rule, we propose additional revisions,
clarifications and codifications pertaining to Medicare's organ
acquisition payment policies. In section XVII.B of this proposed rule,
we propose changes to how organs procured for research are counted for
THs and OPOs for purposes of calculating Medicare's share of organ
acquisition costs. In section XVII.C of this proposed rule, we propose
that organ acquisition costs include certain hospital costs incurred
for services provided to deceased donors. In section XVII.D of this
proposed rule, we propose technical corrections to certain regulations.
In section XVII.E of this proposed rule, we are clarifying the
appropriate allocation of administrative and general costs for THs.
Additionally, in section XVII.F of this proposed rule, we are
soliciting comments on an alternative methodology for counting organs
used in the calculation of Medicare's share of organ acquisition costs;
allowing IOPOs to create a SAC for non-renal organs; and Medicare's
reconciliation of non-renal organs for IOPOs.
B. Counting Research Organs To Calculate Medicare's Share of Organ
Acquisition Costs
In the FY 2022 IPPS/LTCH PPS final rule with comment period (86 FR
73470), we clarified that for Medicare payment purposes, Medicare does
not include in Medicare's share of organ acquisition costs the costs to
procure an organ for research, except where explicitly required by law.
Section 733 of the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 provided Medicare coverage of pancreata for
islet cell transplant for beneficiaries participating in a National
Institute of Diabetes and Digestive and Kidney Diseases clinical trial.
An exception for Medicare cost allocation purposes for pancreata for
islet cell transplant for these trials is under Sec. 413.406(a). Under
Sec. Sec. 413.5(c)(2) and 413.90(a), costs incurred for research
purposes, over and above usual patient care, are not includable as
Medicare allowable costs.
In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25668), we
clarified that for organ acquisition cost allocation purposes, a
``research organ'' is an organ procured and used for research
regardless of whether it is transplanted as part of clinical care (with
the exception of certain pancreata). We proposed to codify that organs
used for research are not counted as Medicare usable organs in
Medicare's share of organ acquisition costs (except certain pancreata
procured for islet cell transplants). We also proposed that OPOs and
THs do not count organs designated for research activities prior to the
time the donor entered the hospital's operating room for surgical
removal of the organs as Medicare usable organs but count as total
usable organs. Finally, we proposed that OPOs and THs do not count
organs designated for transplant prior to the time the donor entered
the hospital's operating room for surgical removal of the organs but
subsequently determined to be unusable and donated to research, as
Medicare usable organs or total usable organs.
In the FY 2022 IPPS/LTCH PPS final rule with comment period, we
finalized our proposal to require that organs used for research be
excluded from Medicare usable organs in Medicare's share of organ
acquisition costs (except pancreata for islet cell transplants as
specified in Sec. 413.406(a)), and kidneys used for research be
excluded from Medicare usable kidneys in Medicare's share of kidney
acquisition costs under Sec. 413.412(c). However, due to the number
and nature of the comments received, we did not finalize our proposal
that would have required OPOs and THs to include organs designated for
research activities prior to the time the donor entered the hospital's
operating room for surgical removal of the organs in the count of total
usable organs or our proposal to exclude organs designated for
transplant but subsequently determined to be unusable and donated to
research from Medicare usable organs or total usable organs. We
indicated that we may address these issues in future rulemaking.
Commenters on these proposals overall expressed concern that our
proposals would negatively impact the affordability and availability of
research organs and hinder the advancement of clinical research (86 FR
73494). Some commenters suggested that including research organs in the
count of total usable organs reflected a change in policy for IOPOs
that would require assignment of a full SAC (including administrative,
general, and overhead costs) to each research organ they procured and
would also result in significantly higher acquisition costs that would
be borne by the research community. One commenter suggested that our
proposal to exclude organs donated for research from the count of
Medicare and total usable organs would result in procurement costs
being passed on to researchers, which could discourage the use of human
organs in research studies. A few commenters reported that IOPOs charge
researchers an agreed upon fee for furnishing an organ for use in
research. They asserted that if our proposal to include organs in the
count of total usable organs were finalized, IOPOs would need to charge
significantly higher amounts for furnishing research organs to the
research community. A few commenters noted that procuring an organ for
use in research may involve less extensive testing and evaluation than
is necessary when procuring an organ for
[[Page 44767]]
transplantation. We believe that most THs and OPOs currently charge the
research community agreed upon prices to procure research organs
instead of charging a SAC. We have heard from some interested parties
in the transplant community that THs and OPOs use agreed upon pricing
because the SAC may include procurement services that are unnecessary
to procure research organs.
In the time since we issued the FY 2022 IPPS/LTCH PPS final rule
with comment period, we have continued to review the potential impacts
of our research organ proposal on stakeholders. We agree with the
comments on the FY 2022 IPPS/LTCH PPS proposed rule that suggested that
including research organs in the count of total usable organs would
require the assignment of a full SAC on the Medicare cost report for
each research organ procured. We understand that this practice may
increase the amount the research community pays for obtaining organs
for research. We also recognize that procurement costs may differ for
research organs and transplanted organs because organs procured for
research may be subject to less extensive testing and evaluation than
organs that are to be transplanted. We believe that when THs and OPOs
furnish organs for research, they should charge amounts that more
accurately reflect the testing and evaluation associated with procuring
research organs. This amount should represent the actual costs incurred
by the TH or OPO for furnishing organs used for research instead of a
token fee that does not cover the procurement cost of the organs.
In response to commenters' concerns with the research organ
counting proposals in the FY 2022 IPPS/LTCH PPS proposed rule, in this
proposed rule we propose to require that THs and OPOs exclude organs
used for research from the numerator (Medicare usable organs) and the
denominator (total usable organs) of the calculation used to determine
Medicare's share of organ acquisition costs on the Medicare cost
report. For the purpose of determining Medicare's share of organ
acquisition costs, we intend a ``research organ'' to be an organ used
for research (with the exception of certain pancreata), regardless of
whether the organ was intended for research, or intended for transplant
under Sec. 413.412(a) and instead used for research. Including organs
used for research in the count of Medicare usable organs and total
usable organs results in assignment of a full SAC to each research
organ. Our proposal would not require assignment of a full SAC on the
Medicare cost report for each research organ procured; and therefore,
would not result in a significant increase in amounts charged for
research organs. We expect that when an organ, identified as a research
organ, is transplanted into a patient, the organ is counted as a total
usable organ and a full SAC is assigned.
Under our proposal, THs and OPOs would also be required to deduct
the cost incurred in procuring an organ for research from their total
organ acquisition costs. This process would ensure that research organ
procurement costs are not allocated across all transplantable organs
and consequently, that Medicare is not paying for non-allowable
research activities. Additionally, this practice would ensure that
Medicare does not pay for non-allowable research costs in instances
where the TH or OPO charges a fee that does not cover the cost it
incurred to procure the organ for research.
Although TH/HOPOs are currently including research organs in the
total usable organ \286\ count and assigning a full SAC to each
research organ, we believe this proposal, if finalized, would not
affect the TH/HOPOs ability to charge research entities a fair and
accurate amount for procuring organs used for research. THs and OPOs
are responsible for negotiating the amount charged for an organ used
for research with the research entity receiving the research organ;
however, regardless of amounts charged, the costs must be offset
against total organ acquisition costs. In accordance with 42 U.S.C.
273(b)(1)(B) and Sec. 486.303(c), OPOs are required to have accounting
and other fiscal procedures necessary to assure the fiscal stability of
the organization.
---------------------------------------------------------------------------
\286\ CMS 2552-10 (OMB No. 0938-0050).
---------------------------------------------------------------------------
The availability of organs for research is important for continued
innovation in transplant medicine and for the discovery of new
treatments for diseases. In order to ensure the research community has
access to organs for research and to lower the procurement costs
associated with such organs, we propose to revise the policy set forth
in Sec. 413.412(c) for OPOs and THs for counting organs used for
research. Specifically, we propose to revise Sec. 413.412(c) as
follows: first, by redesignating paragraph (c) (after the subparagraph
heading) as paragraph (c)(1); second, by revising redesignated
paragraph (c)(1) to specify that for Medicare cost allocation purposes,
organs used for research are not counted as Medicare usable organs or
as total usable organs in the ratio used to calculate Medicare's share
of organ acquisition costs (except pancreata for islet cell transplants
as specified in Sec. 413.406(a) and, third, by striking the language
that specifies that kidneys used for research are not counted as
Medicare usable kidneys or as total usable kidneys in Medicare's share
of kidney acquisition costs; (we believe this language is duplicative
because the reference to ``organs'' includes kidneys). We also propose
to amend Sec. 413.412(c) by adding paragraph (c)(2) which would
require that OPOs and THs must reduce their costs to procure organs for
research from total organ acquisition costs on the Medicare cost
report.
Regarding the counting of unusable organs as described in Sec.
413.412(d), we propose to remove the specification that the
determination that an organ is unusable is made by the excising
surgeon; our proposed amendment would allow this determination to be
made by any surgeon. As revised, paragraph (d)--which we propose to
redesignate as paragraph (d)(1)--would provide that an organ is not
counted as a Medicare usable organ or a total usable organ in the ratio
used to calculate Medicare's share of organ acquisition costs if a
surgeon determines, upon initial inspection or after removal of the
organ, that the organ is not viable and not medically suitable for
transplant and is therefore unusable. In addition, we propose to
clarify in Sec. 413.412(d) that Medicare shares in the costs to
procure unusable organs through the application of the Medicare ratio
and to clarify how OPOs and THs must report these organs on their
Medicare cost reports to ensure that Medicare shares in the costs to
procure these organs. Specifically, we propose to add new paragraph
(d)(2), which would specify that OPOs and THs include the costs to
procure unusable organs, as described in Sec. 413.412(d)(1), in total
organ acquisition costs reported on their Medicare cost reports.
C. Costs of Certain Services Furnished to Potential Deceased Donors
In the FY 2022 IPPS/LTCH PPS final rule with comment period, we
codified at Sec. 413.418(a) our longstanding policy that only costs
incurred after the declaration of the donor's death and consent to
donate are permitted to be included as organ acquisition costs (86 FR
73500 through 73503). However, after finalizing that rule, we received
feedback from some stakeholders that indicated that OPOs may incur
certain costs for donor management prior to declaration of death, but
when death is imminent, in accordance with OPTN
[[Page 44768]]
donation policies.\287\ This is typical in cases of donation after
cardiac death (DCD). We researched this issue further and found that
these costs are for certain services that can only be performed prior
to declaration of death, when death is imminent, to evaluate the organs
for transplant viability and to prepare the donor for donation. Failure
to provide these services to the potential donor may compromise the
viability of organs, limit organ donation, and would not honor the
donor or donor family's wishes to donate organs. To avoid these
unintended consequences, we propose to modify Sec. 413.418(a) to allow
a donor community hospital or TH to incur costs for hospital services
attributable to a deceased donor or a donor whose death is imminent.
Organ acquisition costs include hospital services authorized by the OPO
when there is consent to donate, and a declaration of death has been
made or death is imminent and these services must be provided prior to
declaration of death. These costs must not be part of medical treatment
that primarily offers a medical benefit to the patient as determined by
a healthcare team.
---------------------------------------------------------------------------
\287\ OPTN Policy Manual, Policy 2, available at https://optn.transplant.hrsa.gov/media/eavh5bf3/optn_policies.pdf, accessed
February 4, 2022.
---------------------------------------------------------------------------
Under this proposal, hospitals would bill the OPO for these
services in accordance with Sec. 413.418(b), and the OPO would record
those billed amounts as organ acquisition costs on its Medicare cost
report. Because these services are intended to determine or maintain
the viability of organs for transplant, the patient's health insurance
would not be billed for the organ acquisition costs, and the patient or
patient's family would not be responsible for those amounts.
Stakeholders were concerned that without this clarification, if
services authorized by the OPO and provided by the hospital could not
be included as organ acquisition costs, hospitals may bill the donor's
family or a third-party payor. Doing so could create a barrier to organ
donation based on economic means, by forcing costs associated with
organ acquisition to be borne by the donor's family or a third-party
payor. Making the donor's family responsible for these costs could
preclude those of lesser economic means from fulfilling their wishes to
donate organs and would be inequitable. It could also be a deterrent to
deceased donor organ donation and as a result reduce the supply of
organs available for transplant. We are committed to supporting organ
donation in an equitable fashion and view this issue as a potential
barrier to organ donation. We believe our proposal supports organ
donation and organ procurement costs and addresses a potential inequity
in the transplant ecosystem.
D. Technical Corrections and Clarifications to 42 CFR 405.1801,
412.100, 413.198, 413.402, 413.404, 413.420 and Nomenclature Changes to
42 CFR 412.100 and 42 CFR Part 413, Subpart L
Technical Corrections and Clarifications. In the FY 2022 IPPS/LTCH
PPS final rule with comment period, Sec. 413.200 was reserved and
redesignated as Sec. 413.420 with revisions. In this proposed rule, we
propose to make a technical correction to Sec. 405.1801(b)(2)(ii), by
removing the reference to Sec. 413.200(g) and replacing it with a
reference to Sec. 413.420(g). We also propose to make a technical
correction to Sec. 413.198(b)(4)(ii), by removing the reference to
``Section 413.200, Reimbursement of OPAs and histocompatibility
laboratories'' and replacing it with a reference to ``Section
413.420,'' and that section's title, ``Payment to independent organ
procurement organizations and histocompatibility laboratories for
kidney acquisition costs.''
We also propose to clarify Sec. Sec. 412.100(b) and 413.402(a) by
removing ``as appropriate'' and instead specifying that organ
acquisition costs are allowable costs incurred in the acquisition of
organs from a living donor or a deceased donor by a hospital, or from a
deceased donor by an OPO.
We propose to revise Sec. 413.404(c)(2)(i)(C) so that it is
written in the active voice and not the passive voice. In addition, we
propose to revise this provision to clarify that the kidney SAC amount
is the interim payment made by the TH or other OPO to the IOPO, as set
forth in Sec. 413.420(d)(1).
We propose to amend Sec. 413.420(a)(1) by striking ``after
September 30, 1978,'' as we believe it is no longer necessary that the
regulations specify that the reasonable cost reimbursement principles
in part 413 only apply to covered services furnished after that date;
and to replace the acronym ``OPOs'' with ``IOPOs''. We propose to amend
Sec. 413.420(a)(2) to correct a typographical error by changing
``HOPOs'' to ``IOPOs''.
We propose to amend Sec. 413.420(c)(1)(v) to correct the statutory
reference to section 1861 of the Act so that it instead refers to
section 1881 of the Act; the original regulation text was in Sec.
413.178, and was redesignated as Sec. 413.200 in 1997 \288\ before
being redesignated as Sec. 413.420 in the FY 2022 IPPS/LTCH PPS final
rule with comment period.\289\ The original regulation at Sec. 413.178
referred to section 1881 of the Act, but a typographical error changed
``1881'' to ``1861'' when other changes to the regulation were proposed
in 1987 (52 FR 28674) and finalized in 1988 (53 FR 6548).
---------------------------------------------------------------------------
\288\ 62 FR 43668, Aug. 15, 1997.
\289\ 86 FR 73515, Dec. 27, 2021.
---------------------------------------------------------------------------
Nomenclature Changes. In this proposed rule, we propose to amend
Sec. Sec. 412.100(b); 413.402(a) and (b)(3), (4), (7) and (8)(ii);
413.404(a)(2), (b)(3), and (c)(1)(i) and (ii); and 413.418 (the section
title and paragraph (b)), by replacing the term ``cadaveric'' with
``deceased'', to be consistent with terminology used within the
transplant community when referring to deceased donors, and to promote
sensitivity regarding the process and decision of donating organs from
deceased donors. In Sec. 413.404(b)(3)(ii), we propose to replace
``cadaveric SAC'' with ``deceased donor SAC'' and ``cadaveric
organ(s)'' with ``deceased donor organ(s)''; and in Sec.
413.404(c)(2), we propose to replace ``cadaveric kidneys'' with
``deceased donor kidneys''.
We propose to amend Sec. 413.404(c)(2)(i)(A), (B), and (D) and
413.414(c)(1) by replacing references to ``Medicare contractor'' with
``contractor'', to conform to terminology changes made in the FY 2015
IPPS final rule (79 FR 49854 at 50199) and in accordance with the
definition at 42 CFR 405.201(b).\290\
---------------------------------------------------------------------------
\290\ 42 CFR 405.201(b) defines contractors as Medicare
Administrative Contractors and other entities that contract with CMS
to review and adjudicate claims for Medicare payment of items and
services.
---------------------------------------------------------------------------
In this proposed rule, we also propose to remove the term
``discarded'' from Sec. 413.412(d) and replace it with ``unusable'',
to promote sensitivity in scenarios where donated organs are unused
because they are not suitable for transplantation.
Finally, in this proposed rule, we propose to amend Sec. 413.400
by adding ``TH'' in parentheses after the defined term ``transplant
hospital''. Throughout subpart L, we propose to replace the term
``transplant hospital'' with ``TH''.
E. Clarification of Allocation of Administrative and General Costs
When a TH procures organs for transplantation, it is required to
allocate administrative and general (A&G) costs to the appropriate
organ acquisition cost centers on its Medicare hospital cost
[[Page 44769]]
report (MCR).\291\ This practice is in accordance with Medicare's
reasonable cost principles under section 1861(v) of the Act and the
regulations at Sec. Sec. 413.20 and 413.24. When a TH receives organs
from an OPO or other TH, it makes payment to the OPO or TH that
furnished the organ for the cost incurred to procure the organ. We are
aware that some THs that receive organs place the ``purchase cost'' for
the organs they receive in the accumulated cost statistic by which A&G
is allocated. Under Sec. 413.24(d)(6), including a statistical cost
which does not relate to the allocation of A&G expenses causes an
improper distribution of overhead and could result in improper Medicare
payment. In this scenario, when the receiving TH includes the purchase
cost of the organ it received in the statistical cost by which A&G is
allocated, overhead is improperly distributed to the receiving TH organ
acquisition cost center.
---------------------------------------------------------------------------
\291\ CMS 2552-10 (OMB No. 0938-0050)
---------------------------------------------------------------------------
To ensure the appropriate allocation of A&G costs on a TH's MCR, we
propose to clarify that when a TH receives organs from an OPO or other
TH, the receiving TH must exclude from its accumulated cost statistic
the cost associated with these organs because these costs already
include A&G costs. In accordance with Sec. 413.24(d)(6), purchased
services for a department that are directly assigned to the department
that include A&G costs result in an excessive allocation of overhead.
This duplication of A&G costs results in improper Medicare payment to
the provider. In accordance with MCR instructions,\292\ if some of the
costs in the department that received this direct assignment of
purchased services should receive A&G costs, the TH must remove the
directly assigned costs (purchased services) from its allocation
statistic to assure a proper allocation of overhead. This process
facilitates appropriate Medicare payment and ensures that the receiving
TH's organ acquisition cost center does not receive an improper
distribution of overhead costs that it did not incur. These
longstanding Medicare cost finding principles are in accordance with
Sec. 413.24(d)(6), and specifically expressed in the MCR instructions
for THs.\293\
---------------------------------------------------------------------------
\292\ PRM 15-2, chapter 40, section 4020.
\293\ Id.
---------------------------------------------------------------------------
F. Organ Payment Policy--Request for Information on Counting Organs for
Medicare's Share of Organ Acquisition Costs, IOPO Kidney SACs, and
Reconciliation of All Organs for IOPOs
In this proposed rule, we are requesting information on an
alternative methodology for counting organs for purposes of calculating
Medicare's share of organ acquisition costs; IOPOs' kidney SACs; and
Medicare's reconciliation of all organs for IOPOs. While we will not be
responding to specific comments submitted in response to this RFI in
the CY 2023 OPPS final rule, we intend to use this input to inform
future policy development.
1. Counting Organs for Medicare's Share of Organ Acquisition Costs
Medicare calculates its share of organ acquisition costs for THs/
HOPOs by multiplying the allowable organ acquisition costs by the ratio
of Medicare usable organs (the numerator) to total usable organs (the
denominator) reported on the Medicare hospital cost report.\294\
Currently, THs/HOPOs must include the following as Medicare usable
organs in the numerator of the Medicare share fraction: \295\ (1)
organs transplanted into Medicare beneficiaries; (2) organs
transplanted into Medicare beneficiaries that were partially paid by a
primary insurance payor in addition to Medicare; (3) organs sent to
other THs or OPOs; (4) kidneys transplanted into Medicare Advantage
beneficiaries for dates of service on or after January 1, 2021; \296\
(5) kidneys sent to United States military renal transplant centers
(MRTCs) with a reciprocal sharing agreement with the HOPO in effect
prior to March 3, 1988, and approved by the contractor; and (6)
pancreata procured for the purpose of acquiring pancreatic islet cells
for transplantation into Medicare beneficiaries participating in a
National Institute of Diabetes and Digestive and Kidney Diseases
clinical trial pursuant to section 733 of the Medicare Prescription
Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173); 42
U.S.C 1395l (MMA).\297\ However, ``(3) organs sent to other THs or
OPOs'' and ``(5) kidneys sent to United States MRTCs with a reciprocal
sharing agreement with the HOPO in effect prior to March 3, 1988, and
approved by the contractor,'' may include organs that are not actually
transplanted into Medicare beneficiaries. Including organs that are not
transplanted into Medicare beneficiaries in Medicare usable organs
inflates Medicare's share of organ acquisition costs.
---------------------------------------------------------------------------
\294\ CMS Pub. 15-2, chapter 40, section 4028.
\295\ Pursuant to PRM Sec. 3115.A. and CMS Pub. 15-2, chapter
40, section 4028.3.
\296\ Section 17006 of the 21st Century Cures Act, (Pub. L. 114-
255). Section 17006(c) of the Cures Act amended section
1852(a)(1)(B)(i) of the Act to exclude coverage for organ
acquisitions for kidney transplants from the Medicare benefits an MA
plan is required to cover for an MA enrollee, including as covered
under section 1881(d) of the Act. Effective January 1, 2021, these
costs are covered under the original Medicare FFS program. The MA
kidney transplants are included in the numerator and denominator on
the MCR to determine Medicare's share of kidney acquisition costs
(85 FR 33796, 33824, June 2, 2020).
\297\ Section 733 of the Medicare Prescription Drug, Improvement
and Modernization Act of 2003 (Pub. L. 108-173); 42 U.S.C. 1395l.
---------------------------------------------------------------------------
Currently, THs/HOPOs must include the following as total usable
organs in the denominator of the Medicare share fraction: (1) Medicare
usable organs; (2) organs excised with the intention to be used for
research; (3) organs excised and either transplanted or furnished to
other THs or OPOs; (4) organs obtained from another TH or OPO and
either transplanted or furnished to other THs or OPOs; (5) organs
furnished to veterans' hospitals or organs sent outside the United
States, under Sec. 413.203; (6) organs transplanted into non-Medicare
beneficiaries, under Sec. 413.203; (7) organs for which the transplant
was totally or partially paid by primary insurance other than Medicare;
(8) kidneys furnished to United States MRTCs with or without a
contractor approved reciprocal sharing agreement with the HOPO in
effect prior to March 3, 1988; and (9) pancreata procured on or after
October 1, 2004, for the purpose of acquiring pancreatic islet cells
for transplantation into participants in a National Institute of
Diabetes and Digestive and Kidney Diseases clinical trial in accordance
with the MMA.\298\
---------------------------------------------------------------------------
\298\ Id.
---------------------------------------------------------------------------
For IOPOs, Medicare calculates its share of kidney acquisition
costs by multiplying the total allowable kidney acquisition costs by
the ratio of Medicare usable kidneys (the numerator) to total usable
kidneys (the denominator) reported on the Medicare IOPO cost
report.\299\ Currently, IOPOs must include the following as Medicare
usable kidneys: (1) kidneys sent to THs; (2) kidneys sent to certified
OPOs; and (3) kidneys sent to United States MRTCs with a reciprocal
sharing agreement with the IOPO in effect prior to March 3, 1988, and
approved by the contractor. However, not all kidneys that are counted
as Medicare usable kidneys are
[[Page 44770]]
transplanted into Medicare beneficiaries.
---------------------------------------------------------------------------
\299\ CMS Pub. 15-2, chapter 33, section 3312.
---------------------------------------------------------------------------
IOPOs must currently include the following as total usable kidneys:
(1) Medicare usable kidneys; (2) kidneys procured and furnished to
other THs or OPOs; (3) kidneys furnished to veterans' hospitals or
organs sent outside the United States in accordance with Sec. 413.203;
(4) kidneys for which the transplant was covered by a MA plan for dates
of service prior to January 1, 2021; and (5) kidneys furnished to
United States MRTCs with or without a contractor-approved reciprocal
sharing agreement with the IOPO in effect prior to March 3, 1988.
In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25656), we
provided a historical overview of Medicare's organ acquisition payment
policy to explain why Medicare currently shares in the organ
acquisition costs for some organs that are not actually transplanted
into Medicare beneficiaries. When Medicare added the ESRD benefit to
Medicare coverage in 1972, Medicare presumed that most kidney
transplant recipients would be Medicare beneficiaries receiving the
ESRD benefit, and thus Medicare would pay a larger share of kidney
acquisition costs.\300\ As Medicare added benefits for transplantation
of non-renal organs and included the costs to procure non-renal organs,
Medicare cost reporting instructions incorporated the presumption that
the ultimate transplant recipient was unknown, but likely a Medicare
beneficiary. Currently, when a TH sends an organ to another TH or to an
OPO, or when an OPO sends an organ to another OPO or to a TH, Medicare
assumes that some of the unknown transplant recipients are Medicare
beneficiaries, and permits those organs to be counted as Medicare
usable organs in the numerator of the fraction for Medicare usable
organs to total usable organs, to be assured that Medicare is paying
its share of organ acquisition costs. Thus, some organs that are not
ultimately transplanted into Medicare beneficiaries are currently being
included in ``Medicare usable organs'' or ``Medicare usable kidneys'',
resulting in Medicare paying more than its share of organ acquisition
costs (86 FR 25665).
---------------------------------------------------------------------------
\300\ Intermediary Letter 73-25 (July 1973) and 54 FR 5619,
February 6, 1989.
---------------------------------------------------------------------------
In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25664), we stated
that Medicare does not intend to share in the cost of procuring organs
that are not transplanted into Medicare beneficiaries (except those
organs designated for transplant but subsequently determined to be
unusable). In the 1988 proposed rule titled ``Medicare Program; Payment
for Kidneys Sent to Foreign Countries or Transplanted in Non-Medicare
Beneficiaries'' (53 FR 6672, 6673), which appeared in the Federal
Register on March 2, 1988, CMS stated that allowing all kidneys to be
counted as Medicare kidneys was not aligned with anti-cross
subsidization principles set forth in section 1861(v)(1)(A) of the Act.
CMS (which was at that time known as the Health Care Financing
Administration, or HCFA) observed that the Medicare Program had been
paying the cost of procuring kidneys transplanted into non-Medicare
beneficiaries and stated it was necessary to amend the regulations in
order to effectuate the statutory principles embodied in section
1861(v)(1)(A), including that the cost of services be borne by the
appropriate payor. We stated that the cost associated with the kidneys
not used by Medicare beneficiaries must be borne by the responsible
individual or third-party payor and that Medicare is precluded from
paying any costs associated with kidneys not used by Medicare
beneficiaries. We proposed to establish in the regulations at Part 413
a requirement for OPOs to reduce their acquisition costs for kidneys
furnished to foreign transplant centers and kidneys transplanted in
non-Medicare patients, which would be achieved by including these
kidneys in total usable kidneys and excluding them from Medicare usable
kidneys. This proposal was finalized in the final rule titled
``Medicare Program; Payment for Kidneys Sent to Foreign Countries or
Transplanted in Patients Other Than Medicare Beneficiaries'' (54 FR
5619) and currently appears at Sec. 413.202.\301\ Similarly, under
Sec. 413.203, THs are required to reduce their acquisition costs for
organs they furnish to foreign transplant centers and organs
transplanted in non-Medicare patients. This is achieved by including
these organs in total usable organs and excluding them from Medicare
usable organs.
---------------------------------------------------------------------------
\301\ The requirement in Sec. 413.202 (titled ``Organ
procurement organization (OPO) cost for kidneys sent to foreign
countries or transplanted in patients other than Medicare
beneficiaries'' (titled ``Organ procurement agencies' (OPAs') or
transplant centers' costs for kidneys sent to foreign countries or
transplanted in non-Medicare beneficiaries''), was originally
codified under Sec. 413.179 (54 FR 5619, February 6, 1989). Section
413.179 was subsequently redesignated as Sec. 413.202 (62 FR 43665,
August 15, 1997)).
---------------------------------------------------------------------------
In the FY 2022 IPPS/LTCH PPS proposed rule, we proposed to require
that THs count the number of organs, and IOPOs count the number of
kidneys, actually transplanted into Medicare beneficiaries on their
Medicare cost reports to more accurately calculate Medicare's share of
organ acquisition costs. Our proposal used the current methodology to
calculate Medicare's share where for THs, organs furnished to other THs
or OPOs are included in the numerator and denominator of the Medicare
fraction, and for IOPOs, kidneys furnished to other OPOs or THs are
included in the numerator and denominator of the Medicare fraction.
Under our proposal, THs and IOPOs would have been required to track
organs they furnish to other facilities and to determine and report on
their Medicare cost reports, the number of those organs that were
transplanted into Medicare beneficiaries.
In the FY 2022 IPPS/LTCH PPS final rule with comment period, we
stated that we were not finalizing the organ counting proposals
included in the FY 2022 IPPS/LTCH PPS proposed rule, due to the number
and nature of the comments received, and we indicated we may revisit
this issue in future rulemaking. Many commenters expressed
acknowledgment and understanding of CMS' objective to pay for organ
acquisition costs for only organs transplanted into Medicare
beneficiaries. However, commenters expressed concerns over potential
operational challenges and increases in burden for THs and OPOs if CMS
were to finalize the proposal and require tracking of organs furnished
to other THs and OPOs, from donors to recipients. Commenters also
expressed concern over the revenue reductions that OPOs and THs,
particularly THs that are children's hospitals, were expected to
experience under the proposal to count only organs transplanted into
Medicare beneficiaries as Medicare usable organs. Many commenters
indicated that because of their traditionally very low Medicare
utilization, THs that are children's hospitals would experience a
greater financial burden under the proposed organ counting methodology
than would be experienced by THs that are not children's hospitals.
Commenters indicated that THs that are children's hospitals would have
difficulty in making up for the loss of Medicare revenue from other
payor sources. Commenters indicated that stakeholders would need more
time to renegotiate contracts with other payors, including Medicaid
payments from states. Commenters expressed concern over the potential
impact on the transplantation
[[Page 44771]]
ecosystem and suggested the proposed policy would result in a decreased
organ supply, although they did not explain how the proposed policy
might cause this to occur. Commenters asked CMS to either withdraw the
proposal or delay its implementation. Commenters also requested that
CMS conduct additional analyses.
In the FY 2022 IPPS/LTCH PPS final rule with comment period, we
indicated that we would conduct additional analyses of impacts upon
THs, children's hospitals, and OPOs before considering a possible re-
proposal in future rulemaking of a policy that would only count organs
transplanted into Medicare beneficiaries for purposes of calculating
Medicare's share of organ acquisition costs. We examined the states
where the children's transplant hospitals are located and how often
their State legislatures meet. We found that all children's hospitals
that are certified as THs are in states where legislatures meet
annually, except for four children's hospitals located in Texas, where
the legislature meets biennially.
Due to the comments received on the FY 2022 IPPS/LTCH PPS proposed
rule, in this RFI we are seeking information as we consider an
alternative methodology for counting organs that will not require THs
and OPOs to track exported organs but would require TH/HOPOs and OPOs
to report only organs transplanted into Medicare beneficiaries for
purposes of calculating Medicare's share of organ acquisition costs.
Under such methodology, TH/HOPOs would include as Medicare usable
organs only organs transplanted within their TH into Medicare
beneficiaries. In this regard, we would exclude organs that a TH
furnishes to other THs or OPOs from its Medicare share fraction, in
both the numerator (Medicare usable organs) and denominator (total
usable organs), and require revenue offsets against total organ
acquisition costs for these organs. Such a methodology would result in
an apportionment of costs and redistribution of reasonable organ
acquisition costs to only organs transplanted into Medicare
beneficiaries within the recipient TH, but it would not require TH/
HOPOs to track organs they furnish to other THs and OPOs, removing a
burden that was concerning to many commenters on the FY 2022 IPPS/LTCH
PPS proposed rule.
For OPOs, we are considering an alternative methodology for
counting organs where OPOs would count all organs, not just kidneys,
and calculate Medicare's share of organ acquisition costs using a ratio
of Medicare usable organs to total usable organs. OPOs would include in
Medicare usable organs only organs transplanted into Medicare
beneficiaries, using recipient payor data provided to OPOs by the OPTN.
Under such a methodology, OPOs would also be required to offset total
organ acquisition costs with revenue received for Medicare usable
organs. Under the methodology, IOPOs would not be required to track
organs they furnish to other OPOs or THs to determine whether the organ
recipient is a Medicare beneficiary, removing a burden that was
concerning to many commenters on the FY 2022 IPPS/LTCH PPS proposed
rule. Such a methodology would result in an apportionment of costs and
redistribution of reasonable organ acquisition costs to only organs
transplanted into Medicare beneficiaries.
We would like to better understand and obtain more detailed
information on the extent to which THs, OPOs, and other interested
parties would be impacted under these alternative organ counting
methodologies used to calculate Medicare's share of organ acquisition
costs. Specifically, CMS seeks public comment on the following:
1. What proportion of organs used for transplant are acquired by
your hospital, received from other THs directly, or received from OPOs?
Does this vary by type of organ, age category, or insurance status of
the potential recipient and if so, how?
2. Of all the transplants performed in your hospital in the past 5
years, what percentage were for:
(a) Medicare beneficiaries; (b) Medicaid patients; (c) private pay
patients; (d) patients who receive financial assistance for services
provided at a free or reduced rate?
3. Describe how THs and OPOs currently support organ acquisition
costs financially. What revenue and income streams (for example,
grants, fundraising, etc.) support these activities?
4. Are you able to quantify the revenue your facility has received
over the past 5 years resulting from Medicare's organ counting policy
because acquisition costs were assigned to Medicare usable organs for
THs, or Medicare usable kidneys for IOPOs, that were transplanted into
non-Medicare beneficiaries? If so, what are the amounts?
5. Describe the impact of the revenue reduction resulting from an
alternate organ counting methodology, both in absolute terms and
relative to your IOPO, or transplant program and hospital as a whole.
6. Should children's hospitals be treated differently under an
alternate organ counting methodology, and if so, why and how?
7. In your State, does Medicaid cover organ transplants and
acquisition costs? If so, explain the Medicaid payment methodology.
Would an alternative organ counting methodology to calculate Medicare's
share of organ acquisition costs impact your payments received from
Medicaid for transplants and/or organ acquisition costs? Additionally,
would a potential change in organ counting affect access to care, and
if so, how?
8. Do other payors pay equitably to share in the costs to acquire
organs for transplant for their patients? If so, under an alternate
organ counting methodology for Medicare would all payors, including
Medicaid, continue to equitably share in the cost to acquire organs for
transplant? By ``equitably'', we mean other payors pay their share of
organ acquisition costs for organs transplanted into their respective
patients.
9. If an alternate organ counting methodology were implemented, are
there any timing issues for implementation that we should consider
regarding other payors, including State Medicaid Agencies, to address
their organ acquisition and/or transplant payment methodologies?
10. Describe what services your TH or IOPO may need to reduce or
change to accommodate a reduction in revenue from Medicare stemming
from an alternate organ counting methodology to count only organs
transplanted into Medicare beneficiaries to calculate Medicare's share
of organ acquisition costs.
11. Will your facility perform less transplants if revenue is
eliminated from Medicare under an alternate organ counting methodology?
If so, why and how? Will your facility perform less organ acquisitions
if revenue is eliminated from Medicare under an alternate organ
counting methodology? If so, why and how?
12. Is the cost to acquire an organ for transplantation into a
Medicare beneficiary different than the cost to acquire an organ for
transplantation into a non-Medicare beneficiary? If so, what factors
contribute to the difference in organ acquisition costs?
13. Describe how clinical decision-making affects organ allocation
and transplantation. Are there other factors that affect organ
allocation and transplantation that we should be aware of?
[[Page 44772]]
2. IOPO Kidney Standard Acquisition Charges
Currently, the contractor \302\ establishes each IOPO's kidney SAC,
and adjusts it if necessary, in accordance with Sec. 413.404(c)(2).
IOPOs must bill their kidney SAC for the costs of Medicare and non-
Medicare kidneys procured for transplant, and are paid their SAC amount
by the entity receiving the kidney (Sec. 413.404(c)(3)). At the end of
the cost reporting period, the contractor reconciles the IOPO's
Medicare kidney acquisition costs with the revenue the IOPO received
for those kidneys, and settles with the IOPO to ensure it is paid the
reasonable costs of Medicare kidney acquisition (Sec.
413.420(e)(2)).\303\
---------------------------------------------------------------------------
\302\ ``Contractor'' refers to the Medicare Administrative
Contractor (MAC) and conforms to terminology changes made in the FY
2015 IPPS final rule (79 FR 50199) and with the definition given at
42 CFR 405.201(b).
\303\ Section 1861(v) of the Act requires that certain Medicare
services, including organ acquisition costs, must be paid based on
reasonable cost.
---------------------------------------------------------------------------
Currently, IOPOs count almost all of the kidneys they procure as
Medicare usable kidneys. (Kidneys sent outside of the United States are
not counted as Medicare usable kidneys.) Consequently, Medicare's
current share of kidney acquisition costs is nearly 100 percent, and
the reconciliation process currently makes the IOPO whole for nearly
all its kidney acquisition costs, on a reasonable cost basis. However,
not all kidneys that are counted as Medicare usable kidneys are
transplanted into Medicare beneficiaries; some of those kidneys are
transplanted into patients with Medicaid, private insurance, etc. As
discussed in the Request for Information (RFI) in section XVII.F.1 of
this proposed rule, we are considering an alternative organ counting
methodology that would require IOPOs to count as Medicare usable organs
only those organs that are actually transplanted into Medicare
beneficiaries, including renal and non-renal organs. Such a methodology
would result in IOPOs' organ acquisition costs being reconciled and
settled for all organ acquisition costs for organs actually
transplanted into Medicare beneficiaries.
Additionally, for kidneys, such an alternative organ counting
methodology would limit the kidney revenue IOPOs receive from THs and
other OPOs to the kidney SAC amount. Longstanding policy currently
requires the contractor to establish the kidney SAC amount (Sec.
413.404(c)(2)). To ensure that an IOPO's kidney SAC appropriately
covers its costs, we are considering a methodology under which IOPOs,
rather than the Medicare contractor, would establish their kidney SACs,
similar to how they establish their SACs for non-renal organs. This
alternative methodology would place the fiscal responsibility on the
IOPOs for kidneys, similar to non-renal organs, by placing the IOPO in
control of its kidney acquisition revenue stream through control of its
kidney SAC.
Specifically, we are considering an alternative methodology where
an IOPO would estimate the reasonable and necessary costs it expects to
incur for services furnished to procure deceased donor kidneys during
its cost reporting period and divide that estimated amount by the
projected number of deceased donor kidneys the IOPO expects to procure
within its cost reporting period. We are also considering a potential
policy approach that would permit an IOPO to adjust its kidney SAC
during the year, if necessary, to account for cost changes. We believe
these alternative policy approaches are in alignment with section
371(b)(1)(B) of the Public Health Service Act and the conditions of
participation at Sec. 486.303(c), which require OPOs to have
accounting and other fiscal procedures necessary to assure the fiscal
stability of the organization, including procedures to obtain payment
for kidneys and non-renal organs provided to THs.
We are requesting information on these alternative policy
approaches that we are considering related to the IOPO kidney SAC.
Specifically, we are seeking information pertaining to the following
questions:
1. Do IOPOs have any concerns with establishing (and where
necessary, adjusting) their own kidney SAC, in accordance with the
potential policy approach under consideration? Do IOPOs have any
concerns with the potential methodology under consideration for
calculating the kidney SAC amount?
2. We have heard from stakeholders that some IOPOs have lengthy
internal processes to adjust their SACs. Do IOPOs have the ability to
respond quickly to cost changes that might necessitate a SAC
adjustment? How frequently do IOPOs currently need to adjust their SACs
due to cost changes that are higher or lower than usual?
3. Are there specific high cost items or services associated with
organ procurement that potentially could increase a SAC? If yes, please
explain. What rules or parameters should CMS consider to account for
these items or services when developing a potential methodology for how
IOPOs calculate their SACs?
4. Do IOPOs believe that being in control of their kidney SAC, as
they are of their non-renal organ SACs, would improve their fiscal
stability?
5. Do stakeholders have concerns about IOPOs establishing their
kidney SACs?
3. Reconciliation for All Organs for IOPOs
Currently, the contractor is required to review IOPOs' kidney
acquisition costs and reconcile and settle those costs to ensure that
Medicare pays its share on a reasonable cost basis. However, there is
no similar requirement for the contractor to review, reconcile and
settle IOPOs' non-renal organ acquisition costs. Over the years,
through various rulings and national coverage determinations (NCDs),
Medicare has added coverage for transplantation of non-renal organs
such as heart, liver, or lungs. Non-renal organs were covered for
transplantation through a CMS Ruling (for heart transplants) and
through NCDs (for other non-renal organs),\304\ and payment policies
were subsequently implemented through notice-and-comment
rulemaking.\305\ We modeled our reimbursement for non-renal organ
acquisition costs on our earlier kidney acquisition policies. In
addition, the OIG \306\ and Congress \307\ have expressed concerns
regarding some OPOs' financial practices. As such, we believe there is
a need to provide more contractor review of non-renal organ acquisition
costs to protect the Medicare Trust Fund and the transplant ecosystem.
Therefore, we are considering a requirement that the contractor review,
reconcile and settle Medicare's share of costs to acquire non-renal
organs for IOPOs under reasonable
[[Page 44773]]
cost principles, similar to the current practice for kidneys.
---------------------------------------------------------------------------
\304\ See CMS Ruling 87-1, April 1987; National Coverage
Determinations Manual, IOM 100-03, chapter 1, Part 4, section 260
(available at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/ncd103c1_Part4.pdf).
\305\ 52 FR 33034, September 1, 1987 (heart); 55 FR 8545, March
8, 1990 and 56 FR 15013, April 12, 1991 (liver); 60 FR 6537,
February 2, 1995 (lung); 64 FR 41497, July 30, 1999 (pancreas); 66
FR 39828, August 1, 2001 (intestine, with reasonable cost coverage
of acquisition costs beginning October 1, 2001).
\306\ https://oig.hhs.gov/oas/reports/region9/90800033.pdf;
https://oig.hhs.gov/oas/reports/region9/90900087.pdf; https://oig.hhs.gov/oas/reports/region9/90500034A.pdf; https://oig.hhs.gov/oas/reports/region9/91102039.pdf.
\307\ https://oversight.house.gov/news/press-releases/oversight-subcommittee-launches-investigation-into-poor-performance-waste- and
https://www.young.senate.gov/newsroom/press-releases/young-joins-finance-committee-members-to-probe-us-organ-transplant-system;
https://www.congress.gov/117/chrg/CHRG-117hhrg44569/CHRG-117hhrg44569.pdf.
---------------------------------------------------------------------------
To reconcile Medicare's share of non-renal organ acquisition costs,
the contractor would review the Medicare cost report to determine if
the costs are reasonable. This would entail the contractor's review of
all IOPO organ acquisition costs, and would ensure that IOPOs' costs
that are reported as organ acquisition costs are appropriate, in
accordance with Sec. 413.402, and are reasonable and necessary, in
accordance with section 1861(v) of the Act and Sec. Sec. 413.5 and
413.9.
If an IOPO establishes a non-renal SAC that is higher than its
reasonable costs, that higher charge becomes an inflated non-renal
organ acquisition cost to the TH or other OPO receiving the organ.
Medicare shares in these inflated costs as a portion are ultimately
paid by Medicare when Medicare reconciles THs' organ acquisition costs.
Without reconciliation and settlement of IOPOs' non-renal organ
acquisition costs, Medicare cannot recover those inflated costs,
resulting in Medicare paying more than reasonable costs for Medicare's
share of organ acquisitions. Conversely, if an IOPO establishes a non-
renal SAC that is less than its reasonable costs, the charge becomes an
organ acquisition cost to the TH receiving the organ. The lower costs
are ultimately paid to the TH by Medicare when reconciled through the
TH's Medicare cost report. Without reconciliation and settlement of
IOPOs' non-renal organ acquisition costs, Medicare is unable to make
IOPOs whole for Medicare's share of the reasonable costs. If IOPOs are
consistently underpaid for their non-renal Medicare organ acquisitions
costs because IOPOs establish SACs that are too low, their fiscal
stability could be compromised.
In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25675), we
proposed regulatory changes to Sec. 413.200, and a commenter expressed
concern that CMS did not make a proposal to reconcile and settle an
IOPO's non-renal organ acquisition costs. The commenter noted that not
reconciling and settling IOPO non-renal organ acquisition costs could
result in fewer non-renal organs being made available for transplant
when an IOPO's total non-renal organ acquisition costs exceed the total
revenue the IOPO receives for organs it provides to other OPOs or THs.
In the FY 2022 IPPS/LTCH PPS final rule with comment period, we
responded that we would consider this issue in future rulemaking (86 FR
73479). While the inconsistency in reconciliation and settlement of
renal and non-renal organ acquisition costs may compromise fiscal
stability if costs consistently exceed revenue, we do not know the
extent to which this inconsistency might also affect equity in organ
procurement or patient access to transplants. We are committed to
identifying and addressing Medicare payment inequities for organ
acquisition costs in the transplant ecosystem.
Another commenter on the FY 2022 IPPS/LTCH PPS proposed rule
suggested that the contractor review, approve, and publish IOPO non-
renal SACs to provide needed oversight. We responded that we would
consider our options for future rulemaking (86 FR 73479). We believe it
is important that IOPOs continue their responsibility for establishing
their non-renal SACs to maintain financial stability and control over
their operating revenue and cash flow, which is based upon the SACs
they bill (42 U.S.C. 273(b)); however, requiring reconciliation and
settlement of IOPOs' non-renal organ acquisition costs would provide
needed contractor review to ensure alignment with Medicare's reasonable
cost principles while still encouraging IOPOs' fiscal responsibility.
Our authority to reconcile and settle non-renal organ acquisition
costs exists under section 1138(b) of the Act. Medicare payment for
organ procurement costs may be made only if an OPO has been designated
by the Secretary as the OPO for its service area (Sec. 486.301(a)(1)).
An OPO must enter into an agreement with CMS in order for the organ
procurement costs attributable to the OPO to be reimbursed under
Medicare and Medicaid (Sec. 486.304(c)). Consequently, all OPOs
wishing to receive Medicare and Medicaid reimbursement for the
procurement of organs must have a signed agreement with CMS.\308\
---------------------------------------------------------------------------
\308\ See form CMS 576-A, expires January 31, 2023; OMB No.
0938-0512.
---------------------------------------------------------------------------
For these reasons, we are considering a potential policy approach
under which Medicare would reconcile and settle for its share of an
IOPO's non-renal organ acquisition costs, in accordance with section
1861(v) of the Act and Sec. Sec. 413.60 and 413.64(f). Under this
potential policy approach, Medicare-certified IOPOs would submit a
Medicare cost report for review, reconciliation, and settlement of non-
renal organ acquisition costs to determine Medicare's reasonable costs.
This potential policy approach would mirror our current approach for
determining Medicare's reimbursement of IOPOs' kidney acquisition
costs. In addition, as part of this potential policy approach, we would
require IOPOs to provide their non-renal SACs to the contractor,
similar to how IOPOs are currently required to share their renal SACs
with the contractor (see Sec. 413.420(d)(4)). This potential policy
approach that we are considering would provide needed contractor
oversight to protect the Medicare Trust Fund and the transplant
ecosystem, and would ensure that non-renal organ acquisition costs are
paid on a reasonable cost basis. Such an approach would promote fiscal
responsibility for IOPOs, and would also create a more equitable,
consistent process for billing and reimbursing organ acquisition costs
for non-renal versus renal organs. We are requesting information on the
alternative policy approach under consideration, and on the following
questions:
1. Does the current policy of not reconciling and settling IOPOs'
non-renal organ acquisition charges lead to excessive non-renal SACs?
If yes, please explain.
2. How often and to what extent do IOPOs have non-renal organ
acquisition costs that exceed the revenue they receive for those non-
renal organs procured? Are there particular situations or items or
services where an IOPO's non-renal organ costs would exceed the non-
renal SAC amount received from the TH (or other IOPO) for the organ(s)
procured?
3. Does the current lack of reconciliation and settlement of non-
renal organ acquisition costs disincentivize IOPOs from procuring non-
renal organs? Does it create an inequity in organ procurement for renal
vs. non-renal organs? Would a potential policy approach that included a
requirement to reconcile and settle non-renal organ acquisition costs
better support the transplant ecosystem?
4. How would contractor review, reconciliation, and settlement of
IOPOs' non-renal organ acquisition costs affect the transplant
ecosystem? Would there be any effect on those waiting for a non-renal
transplant or on transplant hospitals?
5. Would CMS's adoption of a policy approach that required
reconciliation and settlement of non-renal organ acquisition costs
cause IOPOs to procure fewer organs, more organs, or about the same
number of organs for transplant? If so, how and why?
[[Page 44774]]
XVIII. Rural Emergency Hospitals (REH): Payment Policies, Conditions of
Participation, Provider Enrollment, Use of the Medicare Outpatient
Observation Notice, and Physician Self-Referral Law Updates
A. Rural Emergency Hospitals (REH) Payment Policies
1. Introduction
Americans who live in rural areas of the nation make up about 20
percent of the United States (U.S.) population, and they often
experience shorter life expectancy, higher all-cause mortality, higher
rates of poverty, fewer local doctors, and greater distances to travel
to see health care providers, compared to their urban and suburban
counterparts.\309\ In addition, one in five rural residents identifies
as Black, Hispanic, American Indian/Alaska Native (AI/AN), Asian
American/Pacific Islander (AA/PI), or a combination of ethnic
backgrounds. Compared to the non-Hispanic White rural population, these
rural minority groups often and regularly experience several
disadvantageous social determinants of health.\310\
---------------------------------------------------------------------------
\309\ Rural Health Research Gateway. (2018). Rural Communities:
Age, Income, and Health Status. https://www.ruralhealthresearch.org/assets/2200-8536/rural-communities-age-income-health-status-recap.pdf.
\310\ Health Resources & Services Administration (2021). Rural
Hospital Programs. https://www.hrsa.gov/rural-health/rural-hospitals/.
---------------------------------------------------------------------------
The health care inequities that many rural Americans face raise
serious concerns that the trend for poor health care access and worse
outcomes overall in rural areas will continue unless the potential
causes of such health care inequities are addressed.
There have been growing concerns over the closures of rural
hospitals and critical access hospitals (CAHs). Between 2010 and
February 2022, 138 rural hospitals stopped providing inpatient
services, 44 of which were Critical Access Hospitals. There were 75
complete hospital closures where all services ended and 63 hospital
conversions where inpatient services ended but some type of health care
service continued.\311\ Rural hospitals report they continue to face
the threat of closure because they lack sufficient patient volume to
offer traditional hospital inpatient acute care services required for
Medicare payment; however, the demand still exists for emergency and
outpatient services in areas served by these hospitals. Rural hospitals
are essential to providing health care to their communities and the
closure of these hospitals limits access to care for the communities
they once served and reduces employment opportunities, further
impacting local economies. Barriers such as workforce shortages can
impact health care access in rural communities and can lead to unmet
health needs, delays in receiving appropriate care, inability to get
preventive services, financial burdens, and preventable
hospitalizations.\312\
---------------------------------------------------------------------------
\311\ UNC: Cecil G. Sheps Center for Health Services Research.
(2022). Rural Hospital Closures. https://www.shepscenter.unc.edu/programs-projects/rural-health/rural-hospital-closures/.
\312\ Healthy People 2020 (n.d.) Access to Health Services.
https://www.healthypeople.gov/2020/topics-objectives/topic/Access-to-Health-Services.
---------------------------------------------------------------------------
The Consolidated Appropriations Act (CAA), 2021, was signed into
law on December 27, 2020. In this legislation, Congress established a
new rural Medicare provider type: Rural Emergency Hospitals (REHs).
These providers will furnish emergency department and observation care,
and other specified outpatient medical and health services, if elected
by the REH, that do not exceed an annual per patient average of 24
hours. Hospitals may convert to REHs if they were CAHs or rural
hospitals with not more than 50 beds participating in Medicare as of
the date of enactment of the CAA.
REHs are expected to help address the barriers in access to health
care, particularly emergency services and other outpatient services
that result from rural hospital closures, and by doing so, may help
address observed inequities in health care in rural areas.
On January 20 and 21, 2021, President Biden issued three executive
orders related to issues of health equity: Executive Order 13985
``Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government;'' \313\ Executive Order 13988,
``Preventing and Combating Discrimination on the Basis of Gender
Identity or Sexual Orientation;'' \314\ and Executive Order 13995
``Ensuring an Equitable Pandemic Response and Recovery.'' \315\
---------------------------------------------------------------------------
\313\ The White House. (2021). Briefing Room: Executive Order on
Advancing Racial Equity and Support for Underserved Communities
Through the Federal Government. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-advancing-racial-equity-andsupport-for-underserved-communities-through-thefederal-government/.
\314\ The White House. (2021). Briefing Room: Executive Order on
Preventing and Combating Discrimination on the Basis of Gender
Identity or Sexual Orientation. https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-preventing-and-combatingdiscrimination-on-basis-of-gender-identity-orsexual-orientation/.
\315\ The White House. (2021). Briefing Room: Executive Order on
Ensuring an Equitable Pandemic Response and Recovery. https://www.whitehouse.gov/briefing-room/presidentialactions/2021/01/21/executive-order-ensuring-anequitable-pandemic-response-and-recovery/.
---------------------------------------------------------------------------
Executive Order 13985, ``Advancing Racial Equity and Support for
Underserved Communities Through the Federal Government'' requires the
Federal Government to pursue a comprehensive approach to advancing
equity for all, including people of color and others who have been
historically underserved, marginalized, and adversely affected by
persistent poverty and inequality by recognizing and working to redress
inequities in its policies and programs that serve as barriers to equal
opportunity. In accordance with this executive order, persons who live
in rural areas are identified as belonging to underserved communities
that have been adversely affected by inequality.
Executive Order 13988, ``Preventing and Combating Discrimination on
the Basis of Gender Identity or Sexual Orientation'' requires the
Federal Government to prevent and combat discrimination, including when
accessing health care, on the basis of gender identity or sexual
orientation, and to fully enforce Title VII of the Civil Rights Act.
This executive order also requires the Federal Government to fully
enforce other laws that prohibit discrimination on the basis of gender
identity or sexual orientation, all of which impact all persons,
including those in rural communities.
In accordance with Executive Order 13995, ``Ensuring an Equitable
Pandemic Response and Recovery,'' the Federal Government must identify
and eliminate health and social inequities resulting in
disproportionately higher rates of exposure, illness, and death related
to COVID-19 and take swift action to prevent and remedy differences in
COVID-19 care and outcomes within communities of color and other
underserved populations. The executive order highlights the observed
inequities in rural and Tribal communities, territories, and other
geographically isolated communities. We believe the services furnished
by REHs, could be one means of addressing some of the issues raised in
these orders, particularly, barriers to access health care in rural
communities.
Consistent with these executive orders, in implementing the new REH
provider type, we are committed to advancing equity for all, including
racial and ethnic minorities, members of the lesbian, gay, bisexual,
transgender, and queer/questioning (LGBTQ) community, people with
limited English proficiency, people with disabilities,
[[Page 44775]]
rural populations, and people otherwise adversely affected by
persistent poverty or inequality.
2. Statutory Authority and Establishment of Rural Emergency Hospitals
as a Medicare Provider Type
Section 125 of Division CC of the CAA was signed into law on
December 27, 2020 and establishes REHs as a new Medicare provider type.
Section 125 of the CAA added section 1861(kkk) to the Social Security
Act (the Act), which sets forth the requirements for REHs. Section
1861(kkk)(2) of the Act defines an REH as a facility that is enrolled
in the Medicare program as an REH; does not provide any acute care
inpatient services (other than post-hospital extended care services
furnished in a distinct part unit licensed as a skilled nursing
facility (SNF)); has a transfer agreement in effect with a level I or
level II trauma center; meets certain licensure requirements; meets
requirements of a staffed emergency department; meets staff training
and certification requirements established by the Secretary of the
Department of Health and Human Services (the Secretary); and meets
certain conditions of participation (CoPs) applicable to hospital
emergency departments and CAHs with respect to emergency services.
Additionally, section 125(a)(1) of the CAA added section
1861(kkk)(1) of the Act, which requires that REHs provide emergency
department services and observation care and, at the election of the
REH, other medical and health services furnished on an outpatient
basis, as specified by the Secretary through rulemaking. The REH must
also have a staffed emergency department 24 hours a day, 7 days a week,
have a physician, nurse practitioner, clinical nurse specialist, or
physician assistant available to furnish rural emergency hospital
services in the facility 24 hours a day, and meet applicable staffing
requirements similar to those for CAHs.\316\
---------------------------------------------------------------------------
\316\ Congress.gov. (2020). H.R.133--Consolidated Appropriations
Act, 2021. https://www.congress.gov/116/bills/hr133/BILLS-116hr133enr.pdf.
---------------------------------------------------------------------------
In order to become an REH, section 1861(kkk)(3) of the Act requires
that the facility, on the date of enactment of the CAA, 2021 (December
27, 2020), was a CAH or a rural hospital with not more than 50 beds.
For the purpose of REH designation, section 1861(kkk)(3)(B) defines
rural hospital as a subsection (d) hospital (as defined in section
1886(d)(1)(B) with not more than 50 beds located in a county (or
equivalent unit of local government) in a rural area (as defined in
section 1886(d)(2)(D) of the Act)), or treated as being located in a
rural area pursuant to section 1886(d)(8)(E) of the Act. In addition,
the REH must meet certain other requirements under section 1861(kkk) of
the Act, including, but not limited to the following:
An annual per patient average of 24 hours or less in the
REH;
Staff training and certification requirements established
by the Secretary;
Emergency services CoPs applicable to CAHs;
Hospital emergency department CoPs determined applicable
by the Secretary;
The applicable SNF requirements (if the REH includes a
distinct part SNF);
A transfer agreement with a level I or level II trauma
center; and
Any other requirements the Secretary finds necessary in
the interest of the health and safety of individuals who are furnished
services by an REH.
Starting on January 1, 2023, an REH that provides rural emergency
hospital services (as defined in section 1861(kkk)(1) of the Act) will
receive a Medicare payment for those services pursuant to section
1834(x)(1) of the Act, as added by section 125 of the CAA, that is
equal to the amount of payment that would otherwise apply under the
Medicare Hospital Outpatient Prospective Payment System (OPPS) for
covered outpatient department (OPD) services increased by 5 percent.
The beneficiary co-payments for these services will be calculated the
same way as under the OPPS for the service, excluding the 5 percent
payment increase. In addition, section 1834(x)(2) of the Act provides
an additional monthly facility payment to an REH.
To participate in the Medicare program and receive payment for
services furnished to Medicare beneficiaries, providers of services
such as hospitals, home-health agencies, hospices, SNFs, and now REHs
must enter into a provider agreement with CMS, in accordance with
section 1866 of the Act. Medicaid providers, likewise, must enter into
provider agreements with State Medicaid agencies to be eligible for
participation in that program as described in section 1902(a)(27) of
the Act. By entering into a provider agreement, a facility agrees that
it will comply with the applicable requirements of the Medicare and
Medicaid statutes and the regulations that the Secretary issues under
the respective statute.
Section 1861(kkk)(7) of the Act requires the Secretary to establish
quality measurement reporting requirements for REHs, which may include
claims-based outcome measures and/or patient experience surveys. An REH
must submit quality measure data to the Secretary with respect to each
year beginning in 2023 (or each year beginning on or after the date
that is one year after one or more measures are first specified), and
the Secretary is required to establish procedures to make the data
available to the public on the CMS website. At this time, CMS is
requesting information on certain quality measures and quality
reporting requirements for REHs as discussed further in section XVI of
this proposed rule.
The Quality Improvement Organization requirements of the Act shall
apply to REHs in the same manner that they apply to hospitals and CAHs,
in accordance with section 1866(a) of the Act (as amended by section
125(b)(1) of the CAA). In addition, the requirements established at
section 1864 of the Act for hospitals and CAHs to be surveyed for
compliance with the CoPs shall apply to REHs in the same manner as
other hospitals and CAHs, in accordance with section 125(d)(2) of the
CAA.
In accordance with section 1864 of the Act, CMS uses State
surveyors to determine whether a provider or supplier subject to
certification qualifies for an agreement to participate in Medicare.
Additionally, under section 1865 of the Act, some providers or
suppliers subject to certification have the option to instead elect to
be accredited by private accrediting organizations (AOs) whose Medicare
accreditation programs have been approved by CMS as having standards
and survey procedures that meet or exceed all applicable Medicare
requirements. The survey process for Medicare and Medicaid
participating providers and suppliers provides an opportunity for these
providers and suppliers to demonstrate compliance with all of the
applicable CoPs, conditions for coverage (CfCs) or requirements. The
methods used by CMS to determine compliance with the regulations
include surveys conducted by a State survey agency, surveys conducted
by AOs that have deeming authority for Medicare providers and
suppliers, and self-attestation. CMS would require REHs participating
in Medicare to demonstrate and maintain compliance with the provisions
included in the CY 2023 OPPS final rule with comment period.
[[Page 44776]]
3. Summary of Comments by Interested Parties in Response to REH Request
for Information
In preparation for developing these proposed standards and to gain
a clear understanding of the challenges faced by facilities providing
health care services in rural communities, we published a Request for
Information (RFI) on REHs in the proposed rule, ``Medicare Program:
Hospital Outpatient Prospective Payment and Ambulatory Surgical Center
Payment Systems and Quality Reporting Programs; Price Transparency of
Hospital Standard Charges; Radiation Oncology Model; Request for
Information on Rural Emergency Hospitals'' (86 FR 42018) on August 4,
2021. CMS sought public input on a broad range of issues to inform our
policymaking in establishing this new provider type. The RFI solicited
public input on the concerns of rural providers, including in the areas
of health and safety standards, health equity, payment policies,
quality measures and quality reporting, and additional considerations
and unintended consequences that should be considered during the
development of standards for REHs.
Commenters on the RFI generally noted that CMS should take into
consideration the challenges associated with the provision of health
care services in rural communities. Some commenters noted that, while
Congress did not specify the exact steps that CMS should take to
calculate the annual facility payment, CMS should do so in a manner
that maximizes potential payment to REHs to ensure these hospitals can
continue to operate. Other commenters cautioned CMS against calculating
the monthly facility payment in a way that leads to excessive payment.
Commenters also encouraged CMS to set forth the details of the payment
calculation in rulemaking, so that interested parties could replicate
the calculation. With regard to the services provided by REHs,
commenters recommended that REHs should provide maternal health,
behavioral/mental health services, and telehealth services to further
support the communities that they will serve. Commenters recommended
that CMS pay for all REH services at the OPPS rate plus 5 percent. A
few commenters also suggested that CMS should pay for all services
furnished by an REH, including those that are not designated as REH
services, at the applicable rate plus 5 percent. With regard to health
equity, several interested parties commented that REHs could have
significant value for underserved, rural populations by maintaining
local access to care, reducing travel times for care, and serving as
leaders for community health improvement efforts including efforts to
address the social determinants of health. We note that CMS is
committed to reducing inequities in rural communities and we are
considering the best approach to address health equity in the standards
for all Medicare and Medicaid participating providers and suppliers,
including REHs.
We have reviewed all comments from interested parties and have
taken them into consideration while drafting this proposed rule. We
appreciate the interested parties' input and responses to our outreach
efforts thus far.
During the development of the policies to implement this new
provider type, we reviewed the public comments received on the REH RFI,
and held public listening sessions with national stakeholder
organizations as well as tribal communities. We also gave presentations
at CMS' hospital, rural health, and SNF open door forums and sought
public feedback.
4. Payment for Services Performed by REHs
a. Covered Outpatient Department (OPD) Services Performed by REHs
(1) Defining ``REH Services''
Section 1861(kkk)(1)(A) defines the term ``REH services'' as
emergency department and observation services as well as, at the
election of the REH, other medical and health services furnished on an
outpatient basis as specified by the Secretary through rulemaking.
We considered how to determine what other covered outpatient
medical and health services should be considered ``REH services'' for
purposes of payment under section 1834(x)(1). Section 1834(x)(1)
provides that the amount of payment for REH services shall be equal to
the amount of payment that would otherwise apply under section 1833(t)
of the Act for covered OPD services (as defined in section
1833(t)(1)(B) (other than clause (ii) of such section, which are
inpatient hospital services paid under the OPPS)), increased by 5
percent. We interpret this statutory language to mean that the scope of
covered OPD services as defined in 1833(t)(1)(B) of the Act (excluding
1833(t)(1)(B)(ii)) represents the outer limit of services that CMS may
specify as ``REH services.'' 1834(x)(1) frames the services that may
receive the 5 percent increase provided under the statute for ``REH
services'' exclusively in terms of covered OPD services, which we
believe precludes including any services that are not ``covered OPD
services'' in this definition. Although we interpret 1834(x)(1) to
limit the potential scope of REH services to what is included within
the definition of ``covered OPD services,'' we are not suggesting that
REHs would be unable to furnish, and receive payment for, other
services. Rather, we are stating that only services that are covered
OPD services can be paid as specified under Section 1834(x)(1). For
further discussion of CMS's proposals pertaining to payment for other
services performed by REHs, please see discussion in the below section
titled ``Services performed by REHs that are not specified REH
services.''
Within the universe of covered OPD services, in its broadest
interpretation, ``REH services'' could be defined to encompass all
services included in the definition of ``covered OPD services,'' as
provided in section 1833(t)(1)(B) of the Act, when furnished by an REH,
with the exception of services described in clause (ii) of such
section, which are hospital inpatient services, as REHs are precluded
by section 1861(kkk)(2)(B) of the Act from providing acute inpatient
services. Alternatively, CMS could define ``REH services'' to include
only a smaller subset of services. For instance, we considered limiting
``REH services'' to services that are emergent in nature, such as those
services described by the specific HCPCS codes describing emergency
department visits and observation services.
We have some concerns, however, about narrowly defining the covered
OPD services for which REHs may receive payment as REH services to only
services that are emergent in nature. For one, if CMS were to limit the
definition of REH services to strictly emergency services, this might
cause REHs to cease to furnish other covered OPD services previously
provided by the facility upon conversion of the facility to an REH,
which could limit access to such services for some beneficiaries. This
would seem antithetical to the purpose of section 125 of the CAA, which
was created with the goal of ensuring greater access to outpatient
services in rural areas. Further, a narrower definition could exclude
services that may be desirable for REHs to provide in order to expand
or maintain access to outpatient services in rural areas, including
behavioral health, routine imaging, or clinic visits.
In light of our concerns with narrowly defining ``REH services''
and our interest in allowing maximum flexibility for REHs to tailor the
services provided to the needs of their individual communities, for
purposes of payment, we are proposing to define ``REH
[[Page 44777]]
services,'' at 42 CFR 419.91, as all covered outpatient department
services, as defined in section 1833(t)(1)(B) of the Act, excluding
services described in section 1833(t)(1)(B)(ii), furnished by an REH
that would be paid under the OPPS when provided in a hospital paid
under the OPPS for outpatient services, provided that the REH meets the
various applicable REH CoPs. In other words, all services that are paid
under the OPPS when furnished in an OPPS hospital, with the exception
of acute inpatient services, would be REH services when furnished in a
REH. We note that this definition of REH services excludes services
described in section 1833(t)(1)(B)(ii) of the Act, which cannot be
considered REH services because they are inpatient services, which REHs
are not permitted to furnish pursuant to section 1861(kkk)(2)(B) of the
Act.
Additionally, we are soliciting comments on whether CMS should
adopt a narrower definition of REH services than the definition we are
proposing, and if so, how commenters believe we should define these
services and what methodology commenters suggest CMS use to determine
whether a service meets this definition.
(2) Payment for REH Services
Section 1834(x)(1) of the Act states that payment for REH services
``. . . shall be equal to the amount of payment that would otherwise
apply under section 1833(t) for covered OPD services (as defined in
section 1833(t)(1)(B) (other than clause (ii) of such section)),
increased by 5 percent to reflect the higher costs incurred by such
hospitals, and shall include the application of any copayment amount
determined under section 1833(t)(8) as if such increase had not
occurred.'' As a result, we propose that payments for REH services
would be calculated using existing OPPS payment policies and rules. The
only differences between the payment for a covered OPD service
furnished by an OPPS provider and the payment for an REH service
furnished by an REH provider would be that the service payment to the
REH would be equal to the applicable OPPS payment for the same service
plus an additional 5 percent. Accordingly, we propose to codify, at 42
CFR 419.92(a)(1), that the payment rate for an REH service would be
calculated using the OPPS prospective payment rate for the equivalent
covered OPD service increased by 5 percent.
Because we are proposing to utilize OPPS payment policies and rules
to effectuate payment rates for REH services equivalent to the OPPS
payment rates plus five percent, we believe it would be most efficient
from a claims processing perspective for the REHs to utilize the OPPS
claims processing system to process REH payments. We propose updating
the OPPS claims processing logic to include an REH-specific payment
flag, which an REH provider would utilize to indicate that the provider
is an REH and should not be paid at the OPPS payment rates, but should
instead be paid at the REH payment rates. Claims from REH providers for
REH services would be processed within the OPPS claims processing
system. However, when a REH submits a facility claim with the REH-
specific payment flag, this payment flag would trigger payment for REH
services on the claim at the REH services payment rate, which is the
OPPS payment rate plus 5 percent.
We also propose, consistent with the requirement in section
1834(x)(1) of the Act, that the copayment amount for a REH service
would be determined as if the 5 percent payment increase had not
occurred. That is, the additional 5 percent payment for REH services,
above the amount that would be paid for covered OPD services, would not
be subject to a copayment. Therefore, we propose to codify in the REH
payment regulation, at 42 CFR 419.92(a)(2), that the beneficiary
copayment amounts for REH service would be the amounts determined under
the OPPS for the equivalent covered OPD service, pursuant to section
1833(t)(8) of the Act, and would exclude the 5 percent payment increase
that applies to the REH service payment.
Finally, we note that section 1834(x)(5)(A) of the Act states that
``. . . except as provided in subparagraph (B), payments under this
subsection shall be made from the Federal Supplementary Medical
Insurance Trust Fund under section 1841.'' The statute makes clear that
payments for services rendered by REHs receive payment from the Federal
Supplementary Medical Insurance Trust Fund under section 1841. We note,
however, that payments for REH services would have no impact on OPPS
budget neutrality because REH services are not covered OPD services
under section 1833(t) of the Act to which the OPPS budget neutrality
requirements apply. This also means that REH claims would not be used
for OPPS rate setting purposes. Consistent with section 1834(x)(5)(A)
of the Act, REH service payments will be paid from the Federal
Supplementary Medical Insurance Trust Fund under section 1841 of the
Act.
b. Services Performed by REHs That Are Not Specified REH Services
Section 1834(x)(1) specifically addresses the payment rate that
applies for ``REH services,'' which, as discussed above, include at
most the full range of covered OPD services for which payment can be
made under the OPPS. Likewise, as discussed further below, sections
1834(x)(3) and 1834(x)(4) of the Act specifically address payment for
ambulance services and post-hospital extended care services that are
furnished by an REH. However, section 125 of the CAA is silent on how
CMS should pay for other services furnished by an REH, such as services
paid under the Clinical Laboratory Fee Schedule (CLFS) or outpatient
therapy services, that may be provided on an outpatient basis by
hospital outpatient departments, but that are not covered OPD services,
as defined under section 1833(t)(1)(B) of the Act, and thus, pursuant
to the limiting language in 1834(x)(1) of the Act, would not be payable
as REH services when furnished by an REH.
In order for a REH to fulfill the statutory requirements set forth
in section 1861(kkk)(2) of the Act, as well as the proposed CoPs for
REHs described in the proposed rule ``Medicare and Medicaid Programs;
Conditions of Participation (CoPs) for Rural Emergency Hospital (REH)
and Critical Access Hospital CoP Updates,'' which appeared in the
Federal Register on July 6, 2022 (87 FR 40350), REHs must be capable of
providing certain types of outpatient services that are not covered OPD
services, such as basic laboratory services and certain diagnostic
services. Additionally, the proposed REH CoPs state that the REH may
provide outpatient and medical health diagnostic and therapeutic items
and services that are commonly furnished in a physician's office or at
another entry point into the health care delivery system that include,
but are not limited to, radiology, laboratory, outpatient
rehabilitation, surgical, maternal health, and behavioral health
services.
As discussed above, section 1834(x)(1) of the Act provides that the
amount CMS shall pay for REH services furnished by an REH shall be the
same amount that would otherwise apply under section 1833(t) of the Act
for covered OPD services plus five percent. However, section 125 of the
CAA does not indicate that the additional 5 percent payment described
in 1834(x)(1) of the Act would apply to any services other than those
within the definition of ``REH services.'' While some of the
[[Page 44778]]
services described by the proposed REH CoPs would meet the definition
of an REH service because they are also covered OPD services under
section 1833(t)(1)(B) of the Act and would therefore be eligible for
the 5 percent additional payment specified in 1834(x)(1) of the Act,
others--such as laboratory services paid off of the CLFS, and
outpatient rehabilitation services--are outside the scope of covered
OPD services and therefore, for the reasons previously discussed, could
not meet the definition of a REH service. However, CMS believes that it
is consistent with the statutory requirements for rural emergency
hospitals set forth in section 1861(kkk)(2) of the Act for these
services to be paid when they are furnished in an REH. As a result, we
are proposing that any outpatient service furnished by an REH
consistent with the statutory requirements governing this provider type
and the proposed REH CoPs, that does not meet the proposed definition
of REH services, would be paid at the same rate the service would be
paid if performed in a hospital outpatient department and paid under a
fee schedule other than the OPPS, provided the requirements for payment
under that system are met.
As noted above, section 1834(x)(3) of the Act states that ``. . .
for provisions relating to payment for ambulance services furnished by
an entity owned and operated by a rural emergency hospital, see section
1834(l).'' Section 1834(l) of the Act establishes the Medicare
ambulance fee schedule. Therefore, consistent with section 1834(x)(3)
of the Act, we propose to codify, at 42 CFR 419.92(c)(1), that an
entity that is owned and operated by an REH that provides ambulance
services will receive payment for such services under the ambulance fee
schedule as described in section 1834(l) of the Act and, as described
in section VIII.A.7.b of this proposed rule, to revise Sec. 410.40(f)
to include an REH as a covered origin and destination for ambulance
transport.
Section 1861(kkk)(6)(A) of the Act provides discretion for REHs to
include a unit that is a distinct part of the facility licensed as a
skilled nursing facility to furnish post-hospital extended care
services. Further, section 1834(x)(4) of the Act states that ``. . .
for provisions relating to payment for post-hospital extended care
services furnished by a rural emergency hospital that has a unit that
is a distinct part licensed as a skilled nursing facility, see section
1888(e).'' Section 1888(e) of the Act establishes the skilled nursing
facility prospective payment system. Consistent with section
1834(x)(4), we therefore propose to codify, at 42 CFR 419.92(c)(2),
that post-hospital extended care services provided by an REH in such a
unit receive payment through the skilled nursing facility prospective
payment system as described at section 1888(e) of the Act.
c. Payment for an Off-Campus Provider-Based Department of an REH
As discussed above, section 1834(x)(1) of the Act sets forth the
amounts that shall be paid for REH services in terms of amounts that
would be otherwise apply for ``covered OPD services'' under 1833(t).
Section 1833(t)(1)(B)(v) of the Act, which was added by section 603 of
the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted on November
2, 2015, (``BBA''), specifically excludes from the definition of
``covered OPD services'' applicable items and services furnished by an
off-campus outpatient department of a provider as defined by sections
1833(t)(21)(A) and (B) of the Act. In light of the exclusion contained
in 1833(t)(1)(B)(v) of the Act, CMS has carefully considered how an REH
will be paid for items and services furnished by in an off-campus
outpatient department of the REH. Section 1861(kkk)(8) of the Act
appears to speak to this issue, stating that nothing in that provision,
section 1833(a)(10), or section 1834(x) shall affect the application of
paragraph (1)(B)(v) of section 1833(t), relating to applicable items
and services (as defined by 1833(t)(21)(A)) that are furnished by an
off-campus outpatient department of a provider (as defined by
1833(t)(21)(B)). For the reasons discussed in this section, CMS is
proposing to interpret this language as stipulating that the new
provisions governing payments for services furnished by REHs are not
intended to change the existing scope and applicability of the section
603 amendments to section 1833(t) of the Act, and that, as a result,
the section 603 amendments would not apply to the determination of the
payment rates for services furnished by an off-campus outpatient
department of a REH.
Section 603 of the BBA amended section 1833(t)(1)(B) of the Act by
adding a new clause (v), which excludes from the definition of
``covered OPD services'' applicable items and services (defined in
paragraph (21)(A) of the section) that are furnished on or after
January 1, 2017, by an off-campus outpatient department of a provider,
as defined in paragraph (21)(B) of the section. Section 603 also added
a new paragraph (21) to section 1833(t) of the Act, which defines the
terms ``applicable items and services'' and ``off-campus outpatient
department of a provider,'' and requires the Secretary to make payments
for such applicable items and services furnished by an off-campus
outpatient department of a provider under an applicable payment system
(other than the OPPS). In defining the term ``off-campus outpatient
department of a provider,'' section 1833(t)(21)(B)(i) of the Act
specifies that the term means a department of a provider (as defined at
42 CFR 413.65(a)(2) as that regulation was in effect on November 2,
2015) that is not located on the campus (as defined in Sec.
413.65(a)(2)) of the provider, or within the distance (as described in
the definition of campus) from a remote location of a hospital facility
(as defined in section Sec. 413.65(a)(2)). We note that, in order to
be considered part of a hospital, an off-campus department of a
hospital must meet the provider-based criteria established under 42 CFR
413.65. Accordingly, in this proposed rule, we refer to an ``off-campus
outpatient department of a provider,'' which is the term used in
section 603, as an ``off-campus outpatient provider-based department''
or an ``off-campus PBD.''
Sections 1833(t)(21)(B)(ii) through (vi) of the Act except from the
definition of ``off-campus outpatient department of a provider,'' for
purposes of paragraphs (1)(B)(v) and (21)(B) of the section, an off-
campus PBD that was billing under section 1833(t) of the Act with
respect to covered OPD services furnished prior to November 2, 2015, as
well as off-campus PBDs that meet the ``mid build'' requirement
described in section 1833(t)(21)(B)(v) of the Act and the departments
of certain cancer hospitals. Likewise, the department of a provider
located on the campus of such provider or within the distance
(described in the definition of campus at Sec. 413.65(a)(2)) from a
remote location of a hospital facility (as defined in Sec.
413.65(a)(2)), is also excepted from the definition of ``off-campus
outpatient department of a provider'' pursuant to section
1833(t)(21)(B)(i). The items and services furnished on or after January
1, 2017 (or during 2018 or a subsequent year for off-campus PBDs that
qualify for the mid-build exception), by the various types of excepted
off-campus PBDs described in 1833(t)(21)(B) continue to be paid under
the OPPS. In addition, we note that in defining ``applicable items and
services,'' section 1833(t)(21)(A) of the Act specifically excludes
items and services furnished by a dedicated emergency department as
defined at 42 CFR 489.24(b).
[[Page 44779]]
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699
through 79720), we established a number of policies to implement the
section 603 amendments. Broadly, we: (1) defined applicable items and
services in accordance with section 1833(t)(21)(A) of the Act for
purposes of determining whether such items and services are covered OPD
services under section 1833(t)(1)(B)(v) of the Act or whether payment
for such items and services will instead be made under the applicable
payment system designated under section 1833(t)(21)(C) of the Act; (2)
defined off-campus PBD for purposes of sections 1833(t)(1)(B)(v) and
(t)(21) of the Act; and (3) established policies for payment for
applicable items and services furnished by an off-campus PBD
(nonexcepted items and services) under section 1833(t)(21)(C) of the
Act. We specified the Medicare Physician Fee Schedule (PFS) as the
applicable payment system for most nonexcepted items and services
furnished by nonexcepted off-campus PBDs. Nonexcepted items and
services furnished by nonexcepted off-campus PBDs are generally paid
under the PFS at the applicable OPPS payment rate adjusted by the PFS
Relativity Adjuster of 40 percent (82 FR 53030).
Section 125(a)(1) of the CAA added the following language, at
section 1861(kkk)(8) of the Act, regarding the application of the
section 603 amendments to REHs:
``(8) CLARIFICATION REGARDING APPLICATION OF PROVISIONS RELATING TO
OFF-CAMPUS OUTPATIENT DEPARTMENT OF A PROVIDER.--Nothing in this
subsection, section 1833(a)(10), or section 1834(x) shall affect the
application of paragraph (1)(B)(v) of section 1833(t), relating to
applicable items and services (as defined in subparagraph (A) of
paragraph (21) of such section) that are furnished by an off-campus
outpatient department of a provider (as defined in subparagraph (B) of
such paragraph).''
While we are proposing to define REH services as the covered OPD
services furnished by an REH, REHs are not paid under the OPPS; we do
not interpret the language in section 1861(kkk)(8) to indicate that the
section 603 amendments to section 1833(t) should apply to off-campus
PBDs of a REH. Rather, we believe section 1861(kkk)(8) can reasonably
be interpreted as demonstrating an intent that the creation of the REH
provider type would not change the existing scope and applicability of
the section 603 amendments, such that the exclusion of items and
services furnished by non-excepted off-campus PBDs from the definition
of covered outpatient department services under the section 603
amendments continues to apply only to items and services furnished by
the non-excepted off-campus PBDs of subsection (d) hospitals paid under
the OPPS and does not apply to items and services furnished by an off-
campus PBD of an REH, because REHs are a different provider type and
are not paid under the OPPS.
We note that interpreting section 1861(kkk)(8) of the Act to
instead mean that the section 603 amendments should apply to items and
services furnished by off-campus PBDs of REHs appears to be contrary to
the Congressional intent for creating this new provider type, as this
interpretation would potentially disincentivize some otherwise eligible
facilities from choosing to convert to REHs. Specifically, we note that
section 603 does not apply to items and services furnished by the off-
campus PBDs of CAHs. However, if the section 603 amendments applied to
the off-campus PBDs of a former CAH that becomes an REH, these off-
campus PBDs would appear to meet the statutory definition of ``off-
campus outpatient department of a provider,'' and items and services
furnished by these entities would be excluded from the definition of
``covered OPD services'' and paid at the alternative applicable payment
system as provided under section 1833(t)(21)(C). Thus, if a CAH becomes
an REH and as a result becomes subject to the section 603 amendments,
it would experience a significant decrease in payment for items and
services furnished by its off-campus PBDs, relative to the amount paid
for such services when the entity was a CAH (where it is generally paid
at 101 percent of reasonable cost). This would create a financial
disincentive for CAHs to convert to REHs and would seem to be contrary
to the Congressional intent for creating this new provider type.
We propose to codify in the REH payment regulation, at 42 CFR
419.93(a), that items and services furnished by off-campus PBDs of REHs
are not applicable items and services under sections 1833(t)(1)(B)(v)
or (t)(21) of the Act, and thus that items and services furnished by
these off-campus PBDs that otherwise meet the definition of ``REH
services'' will receive the REH services payment amount of the OPPS
payment plus 5 percent, as provided in section 1834(x)(1) of the Act
and described in the proposed regulation text at 42 CFR 419.92(a)(1).
Likewise, items and services furnished by the off-campus PBD of a REH
that do not meet the definition of ``REH services'' would be paid under
the payment system applicable to that item or service, provided the
requirements for payment under the relevant system are met, as
described in the proposed regulation text at 42 CFR 419.92(c).
We seek comment on alternative payment approaches for items and
services furnished by the off-campus PBDs of REHs that may be supported
by the REH statute, including section 1861(kkk)(8). For example, CMS
seeks comment on whether application of the section 603 amendments to
an off-campus PBD of an REH should depend on whether that provision
applied to the entity before it converted to an REH. Under that
framework, if a CAH converts to a REH, because section 1833(t)(1)(B)(v)
did not apply to the CAH before converting, REH services furnished by
any existing off-campus PBDs of the CAH would be paid at 105 percent of
the OPPS rate, rather than at the PFS-equivalent rate required by
section 1833(t)(1)(B)(v) and (t)(21). However, because sections
1833(t)(1)(B)(v) and (t)(21) would have applied to any non-excepted
off-campus PBDs of small rural hospital paid under the OPPS before that
entity converted to an REH, any existing non-excepted off-campus PBDs
of the small rural hospital would continue to be considered non-
excepted off-campus PBDs and would continue to receive the PFS-
equivalent rate under section 1833(t)(21)(C). Under this framework, any
new off-campus PBDs created by the REH would be subject to the section
603 amendments. We are seeking comment on our proposed approach for
paying for items and services furnished by the off-campus PBDs of REHs,
as well as any alternative approaches to this issue that interested
parties may have.
5. Monthly REH Facility Payment
a. Overview of the Monthly REH Facility Payment
Section 1834(x)(2) of the Act establishes an additional facility
payment that is paid monthly to an REH. Section 1834(x)(5)(B) specifies
that this monthly facility payment shall be made from the Federal
Hospital Insurance Trust Fund under section 1817. Sections
1834(x)(2)(B) and 1834(x)(2)(C) of the Act require that, for 2023, the
monthly payment is determined by first calculating the total amount
that CMS determines was paid to all CAHs under Title 18 of the Act in
2019 minus the estimated total amount that would have been paid under
Title 18 to CAHs in 2019 if payment were made for inpatient hospital,
outpatient hospital, and skilled nursing facility
[[Page 44780]]
services under the applicable prospective payment systems for such
services during 2019. The difference is divided by the number of CAHs
enrolled in Medicare in 2019 to calculate the annual amount of this
additional facility payment per individual REH for 2023. The annual
payment amount is then divided by 12 to calculate the monthly facility
payment that each REH will receive. For 2024 and subsequent years, the
monthly facility payment will be the amount of the monthly facility
payment for the previous year increased by the hospital market basket
percentage increase as described under section 1886(b)(3)(B)(iii) of
the Act.
We interpret the references to the year 2019 in sections
1834(x)(2)(C)(i) and 1834(x)(2)(C)(ii) of the Act to mean calendar year
2019 (CY 2019) rather than fiscal year 2019 (FY 2019) because, in the
absence of language implicitly or explicitly denoting the year as
fiscal, we believe calendar year is the most logical reading. The REH
payment system is based on the OPPS, which sets its payment rates and
rules on a CY schedule. Additionally, section 1834(x)(1) of the Act
states that payments for REH services will begin on January 1, 2023,
which is the first day of the CY. Accordingly, we propose to codify the
calculation of the REH monthly facility payment, under 42 CFR
419.92(b)(1), to specifically refer to the amounts that were and would
have been paid to CAHs in calendar year 2019. Under this proposal, we
would apply the CY schedule even when the sections refer to the
inpatient hospital prospective payment system or the skilled nursing
facility prospective payment system where substantial policy changes
are implemented on a fiscal year schedule. Therefore, when we calculate
the total amount that would have been paid to CAHs if inpatient
hospital services, outpatient hospital services, and skilled nursing
facility services were paid under their respective prospective payment
systems, we would use claims data from the last nine months of FY 2019
and the first three months of FY 2020 to calculate payment data for CY
2019 for both inpatient hospital services and skilled nursing facility
services and claims data from CY 2019 for outpatient hospital services.
When determining ``the total amount that . . . was paid under this
title to all critical access hospitals,'' as described in section
1834(x)(2)(C)(i)(I) of the Act, we propose to include both amounts paid
to CAHs from the Medicare program and from beneficiary copayments.
Likewise, we propose to include both projected payments from the
Medicare program and projected beneficiary copayments when determining
the estimated total amount that would have been paid to CAHs had they
been paid on a prospective basis, as described in section
1834(x)(2)(C)(i)(II). By including both Medicare trust fund payments
and beneficiary copayments, we believe that the resulting calculations
will reflect the actual payments CAHs received for services provided in
CY 2019 and ensure that the full amount of additional payments made to
CAHs are reflected in the determination of the monthly REH facility
payment. Because CAHs are generally paid at 101 percent of reasonable
cost, a 2014 report found that in 2012 beneficiary copayments consisted
of around 47 percent of the total Medicare-related spending for
CAHs.\317\
---------------------------------------------------------------------------
\317\ Office of Inspector General, Department of Health and
Human Services. 2014. Medicare beneficiaries paid nearly half of the
costs for outpatient services at critical access hospitals. OEI-05-
12-00085. Washington, DC: OIG.
---------------------------------------------------------------------------
Excluding around 47 percent of the payment CAHs received in 2019
for Medicare services from the REH monthly facility payment calculation
would generate a monthly facility payment that would cover a
substantially smaller share of the costs REHs face. We believe that if
the calculation of the monthly facility payment does not reflect
payments from beneficiaries, CAHs and small rural hospitals could be
discouraged from converting into REHs because the monthly facility
payment would be too small.
Using our calculations, which we will discuss in more detail in
sections XVIII.A.5.b and XVIII.A.5.c of this proposed rule, we have
determined that the estimated prospective payment for CAHs in 2019 is
58.2 percent of total CAH spending in 2019 when copayments are included
for both total CAH spending and the estimated prospective payment for
CAHs. The aggregate REH monthly facility payment would be 72 percent of
the estimated prospective payment for CAHs in 2019. The combination of
the estimated prospective payment for CAHs and the aggregate REH
monthly facility payment where copayments are included in the
calculation for an REH would be close to the amount that REH would have
received from Medicare if it had decided to stay as a CAH and not
convert to an REH. Therefore, it less likely that a CAH would lose
revenue if it converted to an REH in the future, which may encourage a
CAH to convert to an REH. If copayments are removed from both the total
amount of CAH spending in 2019 and the estimated prospective payment
for CAHs in 2019, the aggregate monthly facility payment for all
providers only would be 11.1 percent of the estimated prospective
payment for CAHs in 2019 where the estimated prospective payment amount
includes copayments. That means a CAH converting to an REH would face a
substantial reduction in Medicare payment if it converted to an REH.
Please review the detailed calculations below:
Step 1: Total estimated CAH spending in CY 2019 with copayments:
$12,083,666,636
Total estimated prospective payment for CAHs in CY 2019 with
copayments: $7,033,248,418
Difference: $12,083,666,636-$7,033,248,418 = $5,050,418,218
Aggregate REH monthly facility payment with copayments:
$5,050,418,218
Share of the aggregate REH monthly facility payment with copayments
of the total estimated prospective payment for CAHs in CY 2019 with
copayments: $5,050,418,218/$7,033,248,418 = 72 percent
Step 2: Total estimated CAH spending in CY 2019 removing copayments:
$12,083,666,636 x 0.53 = $6,404,343,317
Total estimated prospective payment for CAHs in CY 2019 removing
copayments: $5,626,598,734
Difference: $6,404,343,317-$5,626,598,734 = $777,744,583
Aggregate REH monthly facility payment without copayments:
$777,744,583
Total estimated prospective payment for CAHs in CY 2019 with
copayments: $7,033,248,418
Share of the aggregate REH monthly facility payment without
copayments of the total estimated prospective payment for CAHs in CY
2019 with copayments: $777,744,583/$7,033,248,418 = 11.1 percent
We believe that including both Medicare trust fund payments and
beneficiary copayments in the calculation of the monthly facility
payment reflects the intent of the statute to provide incentives for
CAHs and small rural hospitals that might otherwise close to convert to
REHs and continue to provide outpatient hospital care in rural
communities. We propose to codify including payments from the Medicare
program and beneficiary copayments for CAHs to calculate the monthly
facility payment under 42 CFR 419.92(b)(1)(i) and (ii).
[[Page 44781]]
Finally, section 1834(x)(2)(D) of the Act states that ``[a] rural
emergency hospital receiving the additional facility payment under this
paragraph shall maintain detailed information as specified by the
Secretary as to how the facility has used the additional facility
payments. Such information shall be made available to the Secretary
upon request.'' Accordingly, we are proposing to codify this reporting
requirement, under 42 CFR 419.92(b)(3), to state that an REH receiving
the additional monthly facility payment must maintain detailed
information as to how the facility has used the monthly facility
payments and must make this information available upon request. We
believe that this requirement can be met using existing cost reporting
requirements for outpatient hospital facilities that would include
REHs. The cost reports track spending on outpatient hospital services
as a part of overall provider spending. This information will show if a
sufficient share of revenue to the REH, which includes the monthly
facility payment, is being directed to outpatient care. For CY 2023, we
therefore do not propose to establish any new reporting or data
collection requirements for REHs related to their use of the REH
monthly facility payments. However, we will monitor this issue in CY
2023 to see if we may need to propose new reporting or data collection
requirements for REHs in future rulemaking.
b. Proposed Methodology To Estimate Medicare CAH Spending in CY 2019
Section 1834(x)(2)(C)(i)(I) requires that CMS use ``the total
amount that the Secretary determines was paid under this title to all
critical access hospitals in 2019'' as part of the calculation used to
determine the monthly facility payment that each REH will receive in
2023. Although the statute provides that this amount shall be an amount
determined by the Secretary, the statute is silent regarding what data
source the Secretary should use in making such determination. We
considered whether CAH claims or cost reports would be the most
appropriate data source from which to determine the payments made to
CAHs in 2019.
Because CAHs are generally paid at 101 percent of their reasonable
costs in furnishing services to Medicare beneficiaries and receive an
annual cost settlement for all services covered by Medicare, we did not
initially believe that CAH claims would reflect all payments that
Medicare may have made to CAHs under Title 18 of the Act. We were most
concerned about modelling the annual cost settlement using CAH claims
data, because the cost settlement is an accounting action that is not
linked to payments reported on individual claims. It was not clear how
we would identify the payment or recoupment performed for the cost
settlement. By contrast, hospital cost reports track not only payments
for claims when they are first submitted to Medicare but also track the
annual cost settlements made with CAHs. However, some hospital cost
report data can take up to 3 years to be received and processed which
raises concerns whether the cost report data for CY 2019 is fully
complete. We compared our calculation of Medicare CAH spending in CY
2019 using CAH claims data to our calculation of Medicare CAH spending
in CY 2019 using CAH cost report data.
We found that CAH claims data reported approximately $450 million
more in CAH Medicare spending ($12,083,666,636) compared to CAH cost
report data ($11,631,762,706). Also, the CAH claims data identified 42
more CAHs than the CAH hospital cost report data. Both findings
indicated that the CAH claims data may have a more complete report of
CAH spending than the CAH cost report data. Finally, we would need to
use CAH claims data to estimate prospective Medicare spending for CAHs.
CAH claims data is the only payment data source that allows service-
specific payment rates to be linked to individual services, which is
necessary to estimate Medicare prospective spending. When comparing
data for two different sets of calculations, it is generally preferred
to use the same data source for both calculations unless an alternate
source is clearly superior. Since we are using CAH claims data to
estimate prospective Medicare spending for CAHs, we determined that CAH
claims data are the best available resource to fulfill the requirements
of section 1834(x)(2)(C)(i)(I) of the Act to determine the amount of
Medicare payments to all CAHs in CY 2019.
We propose to use CAH claims data with service dates in CY 2019 to
calculate the actual Medicare spending for CAHs for CY 2019 as required
under section 1834(x)(2)(C)(i)(I) of the Act. Our calculation of CAH
Medicare spending will include CAH claims data for inpatient hospital
services, inpatient rehabilitation services, inpatient psychiatric
services, outpatient hospital services, and skilled nursing services
including both hospital-based and swing bed services. As discussed
above, we interpret the references to the year 2019 in sections
1834(x)(2)(C)(i) of the Act to mean calendar year 2019 (CY 2019) rather
than fiscal year 2019 (FY 2019) because, in the absence of language
implicitly or explicitly denoting the year as fiscal, we believe
calendar year is the most logical reading. Additionally, section
1834(x)(1) of the Act states that payments for REH services will begin
on January 1, 2023, which is the first day of the CY. Therefore, we are
using CY 2019 CAH claims data to align with our interpretation of the
statute that references to the year 2019 are for the calendar year, and
to avoid unintended discrepancies by combining calendar year and fiscal
year data. Once we identify the claims that we will use for the
calculation, we will calculate the total CAH Medicare spending for CY
2019 by getting the total of the provider payment, coinsurance amounts,
and deductible amounts for all of the claims. We propose to codify the
calculation of total CAH Medicare spending in CY 2019 to create the
monthly facility payment for CY 2023 under 42 CFR 419.92(b)(1)(i).
c. Proposed Methodology To Estimate The Projected Prospective Medicare
Payment for CAHs for CY 2019
Section 1834(x)(2)(C)(i)(II) of the Act directs CMS to use ``the
estimated total amount that the Secretary determines would have been
paid under this title to such hospitals in 2019 if payment were made
for inpatient hospital, outpatient hospital, and skilled nursing
facility services under the applicable prospective payment systems for
such services during such year'' as part of the calculation used to
determine the monthly facility payment that each REH will receive in
2023. The statute clearly directs us to use policy and payment rules
from the IPPS, the IRF-PPS, the IPF-PPS, the OPPS, and the Skilled
Nursing Facility PPS (SNF PPS) as they applied in CY 2019 to determine
the projected prospective Medicare payment for CAHs for CY 2019.
To determine the estimated prospective Medicare payment that CAHs
would have received for CY 2019, CMS will need to use data reflecting
the Medicare-covered services rendered by CAHs in CY 2019. However, the
statute does not specify what data source should be used for generating
this estimation. We researched this issue and determined that CAH
claims would be the only resource available to estimate projected
prospective payment as directed by section 1834(x)(2)(C)(i)(II). We are
aware of no other data sources that report individual services received
by Medicare beneficiaries in CAHs, and the amounts paid to CAHs for
those services, that could be used to estimate projected
[[Page 44782]]
prospective payment for Medicare CAH services. To estimate Medicare CAH
spending if CAHs were paid on a prospective basis, we therefore propose
to use CAH claims for inpatient hospital, inpatient rehabilitation,
inpatient psychiatric, skilled nursing facilities, and outpatient
hospital services. We also propose to include services and items that
are paid through other payment subsystems including clinical lab
services; physician services; ambulance services; parenteral and
enteral nutrition services; durable medical equipment, prosthetics/
orthotics; and supplies; and vaccines and Medicare Part B drugs if
those services and items are reported on an inpatient CAH claim, an
outpatient CAH claim, or a skilled nursing CAH claim. We propose to
model prospective Medicare payment for CAHs by processing the CAH
claims data through the IPPS, IRF-PPS, IPF-PPS, OPPS, or SNF-PPS in a
test environment as appropriate following the detailed methodologies
described in either XVIII.A.5.c.(1) for all claims except for skilled
nursing facility claims or XVIII.A.5.c.(2) for skilled nursing facility
claims.
In response to our request for information in the CY 2022 OPPS/ASC
proposed rule which discussed REH payment policies (86 FR 42288 through
42289), MedPAC expressed concerns that, since CAHs are paid based on
procedure cost for inpatient hospital services, they have less
incentive to fully document a patient's comorbidities than if the
inpatient hospital services were paid prospectively where only
documented diagnoses can generate payment for a provider. MedPAC was
concerned that if the claims used to document CAH inpatient hospital
services do not fully report all relevant patient diagnoses, the amount
of projected Medicare prospective payment assigned to CAHs under the
IPPS could be underestimated, which would cause the monthly REH
facility payment to be larger than the amount that would be paid if CMS
made this calculation using a projected Medicare prospective payment
that more accurately reflected all relevant diagnoses of patients that
received inpatient hospital services from CAHs assuming CAHs have the
same distribution of reported primary diagnoses as hospitals receiving
prospective payment.\318\
---------------------------------------------------------------------------
\318\ Medicare Payment Advisory Commission. September 10, 2021.
Comment Letter. https://www.medpac.gov/wp-content/uploads/2021/10/09102021_OPPS_ASC_2022_MEDPAC_COMMENT_SEC.pdf. Accessed April 4,
2022.
---------------------------------------------------------------------------
However, we have concerns about adopting a methodology that assigns
additional diagnoses for CAH inpatient hospital claims so that these
claims are consistent with the distribution of reported primary
diagnoses for hospitals receiving prospective payment. The relative
health levels of CAH patients compared to patients of hospitals
receiving prospective payment would be needed to be able to confirm
MedPAC's hypothesis that CAH inpatient hospital claims may be missing
some primary diagnosis information because the information is not
required for CAHs to receive full payment for the services they render.
We do not have immediately available data describing in aggregate
whether Medicare patients receiving care at CAHs are healthier, less
healthy, or have a similar level of health compared to Medicare
patients receiving care in facilities receiving prospective payment.
Also, it is not feasible to gather these data before the implementation
of the REH provider type. Obtaining such data would likely involve
identifying a representative sample of the patients of CAHs and
hospitals receiving prospective payment to determine if there are
similar or different distributions of patients based on health status,
age, income, and race, which is beyond the scope of this rulemaking
process. Therefore, when calculating the projected prospective Medicare
payment for CAHs, we are not proposing to adjust the distribution of
reported primary diagnoses on the CAH inpatient hospital claims to
reflect the distribution of reported primary diagnoses for hospitals
receiving prospective payment.
Another issue with relying on inpatient hospital and outpatient
hospital CAH claims to estimate the prospective Medicare payment that
CAHs would have received in CY 2019 is that these claims do not report
the Medicare supplemental payments that hospitals receive through the
inpatient and outpatient prospective payment systems. Supplemental
payments include IPPS new technology payments, outlier claims payments,
clotting factor payments, indirect medical education (IME) payments,
disproportionate-share hospital (DSH) payments, including uncompensated
care payments under section 1886(r) of the Act, low-volume hospital
payments, hospital value-based purchasing program (VBP) payments, and
hospital readmissions reduction program (HRRP) adjustments. However, to
accurately model how much CAHs would have received if they had instead
been paid for applicable services under the inpatient and outpatient
prospective payment systems, as provided by section
1834(x)(2)(C)(i)(II) of the Act, we must estimate the various
supplemental payments that CAHs would have received under these
prospective payment systems.
We therefore propose, in addition to medical claims service data,
that CAH payment information used to calculate the projected Medicare
prospective payment for CAHs include IPPS new technology payments,
outlier claims payments in both the IPPS and the OPPS, clotting factor
payments, indirect medical education (IME) payments, DSH payments,
uncompensated care payments, and low-volume hospital payments. We chose
these supplemental payments because these payments are used to
determine the payment amount for claims in either the IPPS or the OPPS.
We are able to estimate new technology add-on payments, outlier
payments, and clotting factor payments from the existing CAH claims
data.
For IME and DSH adjustments, CAHs generally do not have up-to-date
entries in the Provider Specific File. Therefore, the IME and DSH
adjustments would be almost always zero in the actual calculation. We
are estimating an aggregate projected prospective payment amount for
CAHs, and therefore, we do not need to calculate IME and DSH for each
individual CAH. Instead, we will estimate an aggregate amount of IME
and DSH spending for all CAHs. Our approach is the following:
First, identify all IPPS hospitals that are classified as
rural and calculate the average percentage of additional DSH payment
and the average percentage of IME payment for these rural hospitals. We
use rural IPPS hospitals as a proxy to estimate the percentage of
additional DSH payment and the average percentage of IME payment. Rural
IPPS hospitals are more likely to have complete and timely data to
allow the calculation of DSH and IME payments than CAHs, because rural
IPPS hospitals need to report their data to receive payment. CAHs,
where all services are paid at 101 percent of cost, do not have an
incentive to report data to generate DSH and IME payments.
Second, for each CAH, find the closest IPPS hospital to
that CAH, even if the IPPS hospital is located in an urban area, and
link the additional DSH payment percentage and additional IME payment
percentage of the nearby IPPS hospital to the CAH.
Finally, average the overall rural IPPS DSH payment
percentage and IME payment percentage with the modelled DSH payment
percentage and IME payment percentage for each individual
[[Page 44783]]
CAH. These individual average additional DSH and IME payments for each
CAH can be aggregated to get a national estimate of DSH and IME
spending for CAHs.
We will use the methodology described in the CY 2019 IPPS/LTCH PPS
final rule to estimate the low-volume hospital adjustment for CAHs (83
FR 41399). For discharges occurring in FYs 2019 through 2022, the low-
volume hospital payment adjustment is determined using a continuous,
linear sliding scale ranging from an additional 25 percent payment
adjustment for low-volume hospitals with 500 or fewer discharges (both
Medicare and non-Medicare discharges) to a zero percent additional
payment for low-volume hospitals with more than 3,800 discharges in the
fiscal year.
For uncompensated care payments, we will use a similar approach to
the approach we have described earlier in this section for calculating
estimated DSH and IME payments for CAHs. The difference will be that,
for uncompensated care payments, we will estimate the share of
uninsured patients in each CAH receiving uncompensated care based on a
nearby IPPS hospital and adjusted by the average share of uncompensated
care patients for all rural IPPS hospitals. These calculations will be
performed in addition to calculating the percentage of Medicare
inpatient days attributed to patients eligible for both Medicare Part A
and Supplemental Security Income (SSI) and the percentage of total
inpatient days attributable to patients eligible for Medicaid but not
Medicare Part A. We will then aggregate the estimated uncompensated
care payments for individual CAHs into a national estimate and include
that estimate in the CAH estimated projected prospective payment
amount.
We also considered modelling hospital value-based purchasing
program (VBP) payments, hospital readmissions reduction program (HRRP)
adjustments, and hospital-acquired condition (HAC) reduction program.
However, we have identified no feasible way to estimate these
adjustments for either individual CAHs or for all CAHs in aggregate.
These payments are made based on the actions of individual hospitals,
and there are no trends regarding these payments based on whether the
hospital is located in a rural or urban area or on the size of the
hospital. CAHs do not participate in the VBP, HRRP, or HAC reduction
program themselves. So, the only way to model these payments would be
to identify trends in comparable hospitals. Since there are no payment
trends with the VBP, HRRP, and HAC reduction program, we decided to not
include these adjustments in the estimate of projected prospective
payment for CAHs.
We propose to codify our proposal to estimate the prospective
spending for CAHs in 2019 under 42 CFR 419.92(b)(1)(ii).
(1) Detailed Proposed Methodology To Estimate CY 2019 Prospective
Payment for CAHs for Inpatient Hospital and Outpatient Hospital
Services
This section provides a proposed methodology using inpatient
hospital and outpatient hospital CAH claims and estimated supplemental
payments to estimate the projected Medicare prospective payment for
CAHs for inpatient hospital and outpatient hospital services. For more
detailed information regarding the methodology for estimating the
projected aggregate prospective payment for inpatient and outpatient
CAH services, please refer to the supplementary document ``Calculation
of Rural Emergency Hospital (REH) Monthly Additional Facility Payment
for 2023'' on the CMS website (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices).
Step 1: Proposed CAH Inpatient Prospective Payment (IPPS) Calculation
Preparing Inpatient Claims for CAHs
Identify CAH inpatient hospital claims by using the
provider CCN number.
Exclude Medicare Advantage encounter claims and claims
where Medicare is not the primary payer from the analysis file.
Feed CAH claims through MS-DRG grouper software to assign
MS-DRG code. If the DRG code field on the claim is empty, take the
grouper-assigned MS-DRG code as input to calculate payment. Otherwise,
take the claim MS-DRG code as input.
Group CAH claims that have the same Provider CCN,
Admission Date, and Beneficiary ID combination into inpatient
stays.\319\ Take the benefit exhaust date (if present and earlier than
discharge date) or discharge date of the last claim in the grouping as
the discharge date of the stay. Take the calendar year of the stay
discharge date as the calendar year of the stay (and claims making up
the stay).
---------------------------------------------------------------------------
\319\ PPS payment is made at the stay level instead of the claim
level, that is, there will be up to one final claim per inpatient
stay. CAHs can split-bill an inpatient stay, that is, multiple
claims that make up one stay can have positive payment. In order to
calculate PPS payment for CAH claims, stay grouping is necessary.
---------------------------------------------------------------------------
Identify paid CAH stays by checking if there is at least
one paid claim (Type-of-Bill not being ``110'') within the stay. The
non-paid stays or non-discharging claims will be assigned zero payment,
and the discharging claim (last claim) will be assigned total PPS
payment for the stay.
Calculating PPS Payment for Each Component
The Medicare PPS payment includes the components described in the
following sections.
1. DRG Payment
DRG payment is calculated as the sum of operating base rate and
capital base rate multiplied by DRG weight and Transfer Fraction and
their respective geographic adjustment factor.
The operating and capital base rates and DRG weight are
taken from the relevant Final Rule/Correction Notice for either FY 2019
or FY 2020;
Transfer Fraction is calculated by the covered days of
stay and the Geometric Mean Length of Stay of the DRG code, per post-
acute-care transfer adjustment policy;
Operating geographic adjustment factor is calculated as
the weighted sum of wage index and operation cost-of-living adjustment,
the weights being the labor share and one minus labor share;
Capital geographic adjustment for inpatient hospital
services is the wage index raised to the power of 0.6848,\320\
multiplied by capital cost-of-living adjustment;
---------------------------------------------------------------------------
\320\ This value is set by statute and is the same value every
year.
---------------------------------------------------------------------------
Wage index is taken from the CMS provider wage index file
or impact file. If not found, take wage index from CBSA wage index file
or inpatient provider specific file;
The covered length of stay is calculated as the maximum of
utilization days and cost report days. If either is 0, take the
discharge date minus admission date plus one as the covered days.
2. New Technology Add-On Payments
Check the applicable relevant Diagnosis, Procedure, and
Drug code on the claim to determine if the claim is eligible to receive
new-tech add-on payment.
Calculate the new-tech payment as the maximum amount for
the new-tech or the operating loss multiplied by the new-tech factor,
whichever is smaller.
The operating loss is defined as operation cost minus
operating DRG
[[Page 44784]]
payment (defined in the ``DRG Payment'' section above).
Perform New-Tech add-on calculation for all applicable new
technologies found on claim and sum all eligible New-Tech add-ons as
total new-tech add-on.
3. Outlier Payments
Calculate outlier payment as the excess cost over outlier
threshold multiplied by the cost sharing factor. Cost is defined as the
sum of operating cost and capital cost;
Operating cost is estimated by total covered charges
multiplied by operating cost-to-charge ratio;
Capital cost is estimated by total covered charges
multiplied by capital cost-to-charge ratio, divided by wage index of
provider raised to the power of 0.6848.
4. Clotting Factor Payments
Calculate the clotting factor payment as the
multiplication of revenue unit of clotting factor line and the clotting
factor payment rate from the Part B drug ASP file.
5. Adjusting PPS Payment
The following sections describe adjustments to the payment
calculation. This methodology includes Disproportionate Share Hospital
(DSH) payment, Uncompensated Care Payment (UCP), Indirect Medical
Education (IME) payment, and Low-Volume Adjustment (LVA) payment.
Performance-based payment adjustments, such as Value-based Purchasing,
Hospital Readmission Reduction Program, and Hospital-Acquired Condition
Reduction Program, are not included. These performance programs
typically exclude CAHs and are of smaller magnitude than IME, DSH, UCP
and LVA. As stated previously, there are no payment trends with the
VBP, HRRP, and HAC reduction program in the rural IPPS hospital data,
and we decided to not include these adjustments in the estimate of
projected prospective payment for CAHs.
a. Disproportionate Share Hospital (DSH) and Uncompensated Care Payment
(UCP)
The DSH payment adjustment and UCP are both provider-specific add-
on payments for IPPS claims. In order to apply these two adjustments to
CAHs, we must assess how they are calculated for IPPS hospitals. DSH is
a percentage-based adjustment to the IPPS DRG payment that is
determined by the sum of: (1) the percentage of Medicare inpatient days
attributed to patients eligible for both Medicare Part A and
Supplemental Security Income (SSI), and (2) the percentage of total
inpatient days attributable to patients eligible for Medicaid but not
Medicare Part A. UCP is determined by the percent of individuals under
65 who are uninsured, and hospitals' amounts of uncompensated care.
These calculations are performed in addition to calculating the
percentage of Medicare inpatient days attributed to patients eligible
for both Medicare Part A and Supplemental Security Income (SSI), and
the percentage of total inpatient days attributable to patients
eligible for Medicaid but bot Medicare Part A. All of the factors used
in determining DSH/UCP are ultimately determined by the demographics of
the patient populations hospitals serve. Operationally, CMS collects
and calculates these factors from hospitals' cost report data from
prior years. If CAHs' cost report data were as complete and timely as
that of IPPS hospitals, DSH and UCP could be calculated for CAHs in the
same way. However, because CAHs are reimbursed based on reasonable
cost, they do not have the same incentives to complete their cost
reports as IPPS hospitals. Because of the data availability and
validity concerns, we do not propose to calculate DSH/UCP directly from
cost report data.
To simplify the calculations, define the DSH UCP ratio as the ratio
of a hospital's total DSH and UCP payment amount over its core payment
(i.e., inpatient hospital DRG payment before the inclusion of
supplemental payments) for 2019. The goal is to calculate a reasonable
DSH UCP ratio for CAHs. Starting from the premise that DSH/UCP are
determined by the demographics the hospitals serve, we take the
following steps: