[Federal Register Volume 87, Number 225 (Wednesday, November 23, 2022)]
[Rules and Regulations]
[Pages 71748-72310]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-23918]
[[Page 71747]]
Vol. 87
Wednesday,
No. 225
November 23, 2022
Part II
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 405, 410, 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;
COVID-19; Final Rule
Federal Register / Vol. 87, No. 225 / Wednesday, November 23, 2022 /
Rules and Regulations
[[Page 71748]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 405, 410, 411, 412, 413, 416, 419, 424, 485, and 489
[CMS-1772-FC; CMS-1744-F; CMS-3419-F; CMS-5531-F; CMS-9912-F]
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;
COVID-19
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule with comment period; final rules.
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SUMMARY: This final rule with comment period revises the Medicare
hospital outpatient prospective payment system (OPPS) and the Medicare
ambulatory surgical center (ASC) payment system for Calendar Year (CY)
2023 based on our continuing experience with these systems. We describe
the changes to the amounts and factors used to determine the payment
rates for Medicare services paid under the OPPS and those paid under
the ASC payment system. Also, this final rule updates and refines 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 also make
updates to the requirements for Organ Acquisition, REHs, Prior
Authorization, and Overall Hospital Quality Star Rating. We are
establishing a new provider type for REHs, and we are finalizing
proposals regarding payment policy, quality measures, and enrollment
policy for REHs. In addition, we are finalizing the Conditions of
Participation that REHs must meet in order to participate in the
Medicare and Medicaid programs. This rule also finalizes changes to the
Critical Access Hospitals (CAH) CoPs for the location and distance
requirements, patient's rights requirements, and flexibilities for CAHs
that are part of a larger health system. Finally, we are finalizing as
implemented a number of provisions included in the COVID-19 interim
final rules with comment period (IFCs).
DATES:
Effective date: The provisions of this rule are effective January
1, 2023.
Comment period: To be assured consideration, comments must be
received at one of the addresses provided below, by January 3, 2023.
Incorporation by reference: The incorporation by reference of
certain publications listed in the rule is approved by the Director of
the Federal Register as of January 1, 2023.
ADDRESSES: In commenting, please refer to file code CMS-1772-FC.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to https://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-FC; CMS-1744-F; CMS-
3419-F; CMS-5531-FC; CMS-9912-F, 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-FC; CMS-
1744-F; CMS-3419-F; CMS-5531-F; CMS-9912-F, 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 at [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 (Multiple Imaging and Mental Health), via email at
Mitali Dayal via email at [email protected].
Comprehensive APCs (C-APCs), contact Mitali Dayal via email at
[email protected].
COVID-19 Final Rules, contact Elise Barringer 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 Elise Barringer via email at
[email protected].
Inpatient Only (IPO) Procedures List, contact Abigail Cesnik via
email at [email protected].
Mental Health Services Furnished Remotely by Hospital Staff to
Beneficiaries in Their Homes, contact Emily Yoder via email at
[email protected].
Method to Control Unnecessary Increases in the Volume of Clinic
Visit Services Furnished in Excepted Off-Campus Provider-Based
Departments (PBDs), contact Elise Barringer via email at
[email protected].
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga
via email at [email protected].
No Cost/Full Credit and Partial Credit Devices, contact Scott
Talaga via email at [email protected].
OPPS Brachytherapy, contact Scott Talaga via email at
[email protected].
OPPS Data (APC Weights, Conversion Factor, Copayments, Cost-to-
Charge Ratios (CCRs), Data Claims, Geometric Mean Calculation, Outlier
Payments, and Wage Index), contact Erick Chuang
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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].
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 and Critical Access Hospital Conditions of
Participation (CoP) Issues, contact Kianna Banks 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 Hospital (REH) Physician Self-Referral Law Update
Issues, contact Lisa O. Wilson via email at [email protected] or
Meredith Larson 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: https://www.regulations.gov. Follow the search instructions on that website to
view public comments. CMS will not post on Regulations.gov public
comments that make threats to individuals or institutions or suggest
that the individual will take actions to harm the individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Addenda Available Only Through the Internet on the CMS Website
In the past, a majority of the Addenda referred to in our OPPS/ASC
proposed and final rules were published in the Federal Register as part
of the annual rulemakings. However, beginning with the CY 2012 OPPS/ASC
proposed rule, all of the Addenda no longer appear in the Federal
Register as part of the annual OPPS/ASC proposed and final rules to
decrease administrative burden and reduce costs associated with
publishing lengthy tables. Instead, these Addenda are published and
available only on the CMS website. The Addenda relating to the OPPS are
available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices. The Addenda relating to the ASC payment system are available
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.
Current Procedural Terminology (CPT) Copyright Notice
Throughout this final rule with comment period, we use CPT codes
and descriptions to refer to a variety of services. We note that CPT
codes and descriptions are copyright 2021 American Medical Association
(AMA). All Rights Reserved. CPT is a registered trademark of the AMA.
Applicable Federal Acquisition Regulations and Defense Federal
Acquisition Regulations 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 2023 OPPS/ASC Proposed
Rule
G. Public Comments Received on the CY 2022 OPPS/ASC Final Rule
With Comment Period
II. Updates Affecting OPPS Payments
A. Recalibration of APC Relative Payment Weights
B. Conversion Factor Update
C. Wage Index Changes
D. Proposed Statewide Average Default Cost-to-Charge Ratios
(CCRs)
E. Adjustment for Rural Sole Community Hospitals (SCHs) and
Essential Access Community Hospitals (EACHs) Under Section
1833(t)(13)(B) of the Act for CY 2023
F. Payment Adjustment for Certain Cancer Hospitals for CY 2023
G. Hospital Outpatient Outlier Payments
H. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
I. Beneficiary Copayments
III. OPPS Ambulatory Payment Classification (APC) Group Policies
A. OPPS Treatment of New and Revised HCPCS Codes
B. OPPS Changes--Variations Within APCs
C. New Technology APCs
D. Universal Low Volume APC Policy for Clinical and
Brachytherapy APCs
E. APC-Specific Policies
IV. OPPS Payment for Devices
A. Pass-Through Payment for Devices
B. Proposal to Publicly Post OPPS Device Pass-Through
Applications
C. Device-Intensive Procedures
V. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs
of Drugs, Biologicals, and Radiopharmaceuticals
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Payment Status
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C. Requirement in the Physician Fee Schedule CY 2023 Proposed
and Final Rule for HOPDs and ASCs To Report Discarded Amounts of
Certain Single-Dose or Single-Use Package Drugs
D. Inflation Reduction Act--Section 11101 Regarding Beneficiary
Co-Insurance
VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Amount of Additional Payment and Limit on Aggregate Annual
Adjustment
B. Estimate of Pass-Through Spending for CY 2023
VII. OPPS Payment for Hospital Outpatient Visits and Critical Care
Services
VIII. Payment for Partial Hospitalization Services
A. Background
B. PHP APC Update for CY 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. Services That Will Be Paid Only as Inpatient Services
A. Background
B. 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
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 Devices and Studies
G. OPPS Payment for Software as a Service
H. Payment Adjustments Under the IPPS and OPPS for Domestic
NIOSH-Approved Surgical N95 Respirators
I. Exemption of 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. CY 2023 OPPS Payment Status and Comment Indicators
A. CY 2023 OPPS Payment Status Indicator Definitions
B. CY 2023 Comment Indicator Definitions
XII. MedPAC Recommendations
A. OPPS Payment Rates Update
B. ASC Conversion Factor Update
C. ASC Cost Data
XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
B. ASC Treatment of New and Revised Codes
C. Update to the List of ASC Covered Surgical Procedures and
Covered Ancillary Services
D. Update and Payment for ASC Covered Surgical Procedures and
Covered Ancillary Services
E. ASC Payment System Policy for Non-Opioid Pain Management
Drugs and Biologicals That Function as Surgical Supplies
F. New Technology Intraocular Lenses (NTIOLs)
G. ASC Payment and Comment Indicators
H. 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. 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, and 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 Law
Updates
A. Rural Emergency Hospitals (REH) Payment Policies
B. REH Conditions of Participation (CoP) and Critical Access
Hospital (CAH) CoP Updates (CMS-3419-F)
C. REH Provider Enrollment
D. Use of the Medicare Outpatient Observation Notice by REHs
E. Physician Self-Referral Law Update
XIX. Request for Information on Use of CMS Data To Drive Competition
in Healthcare Marketplaces
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. Finalization of Certain COVID-19 Interim Final Rules With
Comment Period Provisions
A. Medicare and Medicaid Programs; Policy and Regulatory
Revisions in Response to the COVID-19 Public Health Emergency (CMS-
1744-IFC)
B. Medicare and Medicaid Programs, Basic Health Program, and
Exchanges; Additional Policy and Regulatory Revisions in Response to
the COVID-19 Public Health Emergency and Delay of Certain Reporting
Requirements for the Skilled Nursing Facility Quality Reporting
Program (CMS-5531-IFC)
C. OPPS Separate Payment for New COVID-19 Treatments Policy for
the Remainder of the PHE (CMS-9912-IFC)
XXIII. Files Available to the Public via the internet
XXIV. Collection of Information Requirements
A. Statutory Requirement for Solicitation of Comments
B. ICRs for the Hospital OQR Program
C. ICRs for the ASCQR Program
D. ICRs for 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 Payment Adjustments for Domestic NIOSH-Approved
Surgical N95 Respirators
G. ICRs for REH Provider Enrollment Requirements
H. ICRs for Rural Emergency Hospitals and CAHs CoPs
XXV. Response to Comments
XXVI. Economic Analyses
A. Statement of Need
B. Overall Impact of Provisions of This Final Rule With Comment
Period
C. Detailed Economic Analyses
D. Regulatory Review Costs
E. Regulatory Flexibility Act (RFA) Analysis
F. Unfunded Mandates Reform Act Analysis
G. Conclusion
H. Federalism Analysis
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I. Congressional Review
I. Summary and Background
A. Executive Summary of This Document
1. Purpose
In this final rule with comment period, we are updating the payment
policies and payment rates for services furnished to Medicare
beneficiaries in hospital outpatient departments (HOPDs) and ambulatory
surgical centers (ASCs), beginning January 1, 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
final rule with comment period also includes additional policy changes
made in accordance with our experience with the OPPS and the ASC
payment system and recent changes in our statutory authority. We
describe these and various other statutory authorities in the relevant
sections of this final rule with comment period. In addition, this rule
updates and refines the requirements for the Hospital Outpatient
Quality Reporting (OQR) Program and the ASC Quality Reporting (ASCQR)
Program. We also make 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 REHs. In
addition, we are finalizing the Conditions of Participation that REHs
must meet in order to participate in the Medicare and Medicaid
programs. This rule also finalizes changes to the Critical Access
Hospitals (CAH) CoPs for the location and distance requirements,
patient's rights requirements, and flexibilities for CAHs that are part
of a larger health system. We thank commenters for submitting comment
on the use of CMS data to drive competition in healthcare marketplaces,
and the request for information on an alternative methodology for
counting organs. Finally, we are finalizing as implemented, a number of
provisions included in the COVID-19 interim final rules with comment
period (IFCs).
2. Summary of the Major Provisions
OPPS Update: For 2023, we are increasing the payment rates
under the OPPS by an Outpatient Department (OPD) fee schedule increase
factor of 3.8 percent. This increase factor is based on the final
hospital inpatient market basket percentage increase of 4.1 percent for
inpatient services paid under the hospital inpatient prospective
payment system (IPPS) reduced by a final productivity adjustment of 0.3
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 $86.5 billion, an increase of
approximately $6.5 billion compared to estimated CY 2022 OPPS payments.
We are continuing to implement the statutory 2.0 percentage point
reduction in payments for hospitals that fail to meet the hospital
outpatient quality reporting requirements by applying a reporting
factor of 0.9807 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. However, cost report
data usually lags the claims data by a year and we believe that the CY
2020 cost report data are not the best overall approximation of
expected outpatient hospital service costs 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 are
utilizing 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 service ratesetting purposes. As a result, we
are utilizing the CY 2021 claims data 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 are using
the hospital-based PHP (HB PHP) geometric mean per diem costs
consistent with our existing methodology. In addition, we are
finalizing our proposal to use the latest available CY 2021 claims data
and to continue to use the cost data that was available for the CY 2021
rulemaking. Based on public comments, and in order to pay appropriately
and protect access to PHP services in CMHCs, for CY 2023 but not for
subsequent years, we are applying an equitable adjustment, under the
authority set forth in section 1833(t)(2)(E) of the Act, to the CY 2023
CMHC APC payment rate. For CY 2023, we are maintaining the CY 2022 CMHC
APC payment rate of $142.70 as the CY 2023 CMHC APC final payment rate.
Changes to the Inpatient Only (IPO) List: For 2023, we are
finalizing our proposal, with modification, to remove eleven services
from the Inpatient Only list.
340B-Acquired Drugs: For CY 2023, in light of the Supreme
Court decision in American Hospital Association v. Becerra, 142 S. Ct.
1896 (2022), we are applying the default rate, generally average sales
price (ASP) plus 6 percent, to 340B acquired drugs and biologicals in
this final rule with comment period for CY 2023 and removing the
increase to the conversion factor that was made in CY 2018 to implement
the 340B policy in a budget neutral manner.
We are still evaluating how to apply the Supreme Court's decision
to prior calendar years. In the CY 2023 OPPS/ASC proposed rule, we
solicited public comments on the best way to craft any potential
remedies affecting cost years 2018-2022, and we will take these
comments into consideration for separate rulemaking that will be
published in advance of the CY 2024 OPPS/ASC proposed rule.
Device Pass-Through Payment Applications: For CY 2023, we
received 8 applications for device pass-through payments. We solicited
public comment on these applications and are making final
determinations on these applications in this final rule with comment
period. Beginning for OPPS device pass-through applications received on
or after March 1, 2023, we are publicly posting online the completed
application forms and related materials that we receive from
applicants, excluding certain copyrighted or other materials that
[[Page 71752]]
applicants indicate cannot otherwise be released to the public.
Cancer Hospital Payment Adjustment: For CY 2023, we are
continuing to provide additional payments to cancer hospitals so that a
cancer hospital's payment-to-cost ratio (PCR) after the additional
payments is equal to the weighted average PCR for the other OPPS
hospitals using the most recently submitted or settled cost report
data. However, section 16002(b) of the 21st Century Cures Act requires
that this weighted average PCR be reduced by 1.0 percentage point.
Based on the data and the required 1.0 percentage point reduction, we
are using a target PCR of 0.89 to determine the CY 2023 cancer hospital
payment adjustment to be paid at cost report settlement. That is, the
payment adjustments will be the additional payments needed to result in
a PCR equal to 0.89 for each cancer hospital.
ASC Payment Update: For CYs 2019 through 2023, we adopted
a policy to update the ASC payment system using the hospital market
basket update. Using the hospital market basket methodology, for CY
2023, we are increasing payment rates under the ASC payment system by
3.8 percent for ASCs that meet the quality reporting requirements under
the ASCQR Program. This increase is based on a hospital market basket
percentage increase of 4.1 percent reduced by a productivity adjustment
of 0.3 percentage point. Based on this update, we estimate that total
payments to ASCs (including beneficiary cost-sharing and estimated
changes in enrollment, utilization, and case-mix) for CY 2023 will be
approximately $5.3 billion, an increase of approximately $230 million
compared to estimated CY 2022 Medicare payments.
Changes to the List of ASC Covered Surgical Procedures:
For CY 2023, we are finalizing our proposal, with modification, to add
four procedures, to the ASC covered procedures list (CPL) based upon
existing criteria at Sec. 416.166.
Hospital Outpatient Quality Reporting (OQR) Program: For
the Hospital OQR Program measure set, we are finalizing our proposals
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 also requested 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 finalizing our
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. We also requested 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.
Organ acquisition payment policy: We issued 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 are finalizing our proposal to exclude research
organs from the ratio used to calculate Medicare's share of organ
acquisition costs and are modifying our requirement to offset costs by
allowing providers to follow their accounting practices of adjusting
costs, offsetting revenue or establishing a non-reimbursable cost
center, which will maintain or lower the cost of procuring and
providing research organs to the research community. Finally, we are
finalizing our proposal to cover as organ acquisition costs certain
hospital services provided to donors whose death is imminent, to
promote organ procurement and enhance equity.
Rural Emergency Hospitals (REH) and Critical Access
Hospital Conditions of Participation (CoP): We are finalizing the
Conditions of Participation that REHs must meet in order to participate
in the Medicare and Medicaid programs. This rule also finalizes changes
to the Critical Access Hospitals (CAH) CoPs for the location and
distance requirements, patient's rights requirements, and flexibilities
for CAHs that are part of a larger health system.
Rural Emergency Hospitals (REH): Provider Enrollment: We
are outlining provider enrollment requirements for REHs. The most
important of these are that REHs: (1) must comply with all applicable
provider enrollment provisions in 42 CFR part 424, subpart P, in order
to enroll in Medicare; and (2) may submit a Form CMS-855A change of
information application (rather than an initial enrollment application)
to convert to an REH.
Rural Emergency Hospitals (REH) Physician Self-Referral
Law Update: We are finalizing revisions to certain existing exceptions
to make them applicable to compensation arrangements to which an REH is
a party. We are not finalizing the proposed exception for ownership or
investment interests in an REH.
Rural Emergency Hospital Quality Reporting (REHQR)
Program: For the REHQR Program, we are finalizing our proposal 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. Also, we requested 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) requested comments on rural telehealth,
behavioral and mental health, maternal health services, emergency
services, and health equity.
Overall Hospital Quality Star Ratings: For the Overall
Hospital Quality Star Ratings, we are finalizing amending 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
previous 12 months (instead of the ``previous year'').
REH Payment Policy: Section 125 of the Consolidated
Appropriations Act of 2021 (CAA) established a new provider type called
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
[[Page 71753]]
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 finalizing all covered outpatient department services, other
than inpatient hospital services as described in section
1833(t)(1)(B)(ii) of the Act, 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. Also, we
are finalizing our proposal 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 will not receive the
additional 5 percent payment increase that CMS will apply to REH
services.
Finally, we are finalizing that REHs would receive a monthly
facility payment of $272,866. After the initial payment is established
in CY 2023, the monthly facility payment amount will increase in
subsequent years by the hospital market basket percentage increase.
Addition of a New Service Category for Hospital Outpatient
Department Prior Authorization Process: We are adding 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 July 1, 2023.
Mental Health Services Furnished Remotely by Hospital
Staff to Beneficiaries in Their Homes: For CY 2023, we are considering
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 have created
OPPS-specific coding for these services. We are finalizing our proposal
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
clarifying that the requirement that an in-person visit occur within 6
months prior to the initial mental health telehealth service does not
apply to beneficiaries who began receiving mental health telehealth
services in their homes during the PHE or during the 151-day period
after the end of the PHE. We are also finalizing our proposal 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 are finalizing our proposal to replace cross-
references at Sec. Sec. 410.27(a)(1)(iv)(A) and (B) and 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
are finalizing our proposal to revise Sec. 410.28(e) for clarity so
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 finalizing our proposal 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 Healthcare Common Procedure Coding System (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).
Final Payment Adjustments under the IPPS and OPPS for
Domestic National Institute for Occupational Safety and Health (NIOSH)-
Approved Surgical N95 Respirators: As discussed in section X.H of this
final rule with comment period, 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 finalizing our
proposal 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 payment adjustments will account for
these additional resource costs.
We believe the payment adjustments will 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
finalizing our proposal that the payment adjustments will commence for
cost reporting periods beginning on or after January 1, 2023.
Finalization of Certain COVID-19 Interim Final Rules With
Comment Period Provisions: In this final rule with comment period, we
are responding to public comments and stating our final policies for
certain provisions in the IFCs titled ``Medicare and Medicaid Programs;
Policy and Regulatory Revisions in Response to the COVID-19 Public
Health Emergency'' (CMS-5531-IFC), ``Medicare and Medicaid Programs,
Basic Health Program, and Exchanges; Additional Policy and Regulatory
Revisions in Response to the COVID-19 Public Health Emergency and Delay
of Certain Reporting Requirements for the Skilled Nursing Facility
Quality Reporting Program'' (CMS-5531-IFC), and ``Additional Policy and
Regulatory Revisions in Response to the COVID-19 Public Health
Emergency'' (CMS-9912-IFC).
3. Summary of Costs and Benefits
In section XXV of this final rule with comment period, we set forth
a detailed analysis of the regulatory and federalism impacts that the
changes will have on affected entities and beneficiaries. Key estimated
impacts are described below.
a. Impacts of All OPPS Changes
Table 110 in section XXV.C of this final rule with comment period
displays the distributional impact of all the OPPS changes on various
groups of hospitals and CMHCs for CY 2023 compared to all
[[Page 71754]]
estimated OPPS payments in CY 2022. We estimate that the policies in
this final rule with comment period will result in a 4.5 percent
overall increase in OPPS payments to providers. We estimate that total
OPPS payments for CY 2023, including beneficiary cost-sharing, to the
approximately 3,500 facilities paid under the OPPS (including general
acute care hospitals, children's hospitals, cancer hospitals, and
CMHCs) will increase by approximately $3.0 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 no change in CY 2023 payments to
CMHCs relative to their CY 2022 payments, based on our final policy of
maintaining the CY 2022 OPPS payment rates in CY 2023.
b. Impacts of the Updated Wage Indexes
We estimate that our update of the wage indexes based on the fiscal
year (FY) 2023 IPPS final rule wage indexes will result in a 0.2
percent increase for urban hospitals under the OPPS and no change for
rural hospitals. These wage indexes include the continued
implementation of the Office of Management and Budget (OMB) labor
market area delineations based on 2010 Decennial Census data, with
updates, as discussed in section II.C of this final rule with comment
period.
c. Impacts of the Rural Adjustment and the Cancer Hospital Payment
Adjustment
There are no significant impacts of our CY 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 3.8 percent and applying that increase factor to the
conversion factor for CY 2023. As a result of the OPD fee schedule
increase factor and other budget neutrality adjustments, we estimate
that urban hospitals will experience an increase in payments of
approximately 5.3 percent and that rural hospitals would experience an
increase in payments of 2.7 percent. Classifying hospitals by teaching
status, we estimate nonteaching hospitals will experience an increase
in payments of 3.4 percent, minor teaching hospitals would experience
an increase in payments of 4.6 percent, and major teaching hospitals
would experience an increase in payments of 7.2 percent. We also
classified hospitals by the type of ownership. We estimate that
hospitals with voluntary ownership would experience an increase of 5.2
percent in payments, while hospitals with government ownership would
experience an increase of 6.3 percent in payments. We estimate that
hospitals with proprietary ownership will experience an increase of 1.6
percent in payments.
We estimate that the effect of paying for drugs acquired under the
340B program at ASP plus 6 percent and removing the increase to the
conversion factor that was added in CY 2018 to implement the 340B
payment policy in a budget neutral manner will have varying effects
across different provider categories. We note that while urban
hospitals are estimated to have a 1.2 percent increase in payments,
rural hospitals overall are estimated to have a 1.0 percent decrease in
payments as a result of these changes.
e. Impacts of the Final 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 will increase payments by $230
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
[[Page 71755]]
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; the Consolidated Appropriations Act, 2021 (Pub. L. 116-260),
enacted on December 27, 2020; and the Inflation Reduction Act, 2022
(Pub. L. 117-169), enacted on August 16, 2022.
Under the OPPS, we generally pay for hospital Part B services on a
rate-per-service basis that varies according to the APC group to which
the service is assigned. We use the Healthcare Common Procedure Coding
System (HCPCS) (which includes certain Current Procedural Terminology
(CPT) codes) to identify and group the services within each APC. The
OPPS includes payment for most hospital outpatient services, except
those identified in section I.C of this final rule. Section
1833(t)(1)(B) of the Act provides for payment under the OPPS for
hospital outpatient services designated by the Secretary (which
includes partial hospitalization services furnished by CMHCs), and
certain inpatient hospital services that are paid under Medicare Part
B.
The OPPS rate is an unadjusted national payment amount that
includes the Medicare payment and the beneficiary copayment. This rate
is divided into a labor-related amount and a nonlabor-related amount.
The labor-related amount is adjusted for area wage differences using
the hospital inpatient wage index value for the locality in which the
hospital or CMHC is located.
All services and items within an APC group are comparable
clinically and with respect to resource use, as required by section
1833(t)(2)(B) of the Act. In accordance with section 1833(t)(2)(B) of
the Act, subject to certain exceptions, items and services within an
APC group cannot be considered comparable with respect to the use of
resources if the highest median cost (or mean cost, if elected by the
Secretary) for an item or service in the APC group is more than 2 times
greater than the lowest median cost (or mean cost, if elected by the
Secretary) for an item or service within the same APC group (referred
to as the ``2 times rule''). In implementing this provision, we
generally use the cost of the item or service assigned to an APC group.
For new technology items and services, special payments under the
OPPS may be made in one of two ways. Section 1833(t)(6) of the Act
provides for temporary additional payments, which we refer to as
``transitional pass-through payments,'' for at least 2 but not more
than 3 years for certain drugs, biological agents, brachytherapy
devices used for the treatment of cancer, and categories of other
medical devices. For new technology services that are not eligible for
transitional pass-through payments, and for which we lack sufficient
clinical information and cost data to appropriately assign them to a
clinical APC group, we have established special APC groups based on
costs, which we refer to as New Technology APCs. These New Technology
APCs are designated by cost bands which allow us to provide appropriate
and consistent payment for designated new procedures that are not yet
reflected in our claims data. Similar to pass-through payments, an
assignment to a New Technology APC is temporary; that is, we retain a
service within a New Technology APC until we acquire sufficient data to
assign it to a clinically appropriate APC group.
C. Excluded OPPS Services and Hospitals
Section 1833(t)(1)(B)(i) of the Act authorizes the Secretary to
designate the hospital outpatient services that are paid under the
OPPS. While most hospital outpatient services are payable under the
OPPS, section 1833(t)(1)(B)(iv) of the Act excludes payment for
ambulance, physical and occupational therapy, and speech-language
pathology services, for which payment is made under a fee schedule. It
also excludes screening mammography, diagnostic mammography, and
effective January 1, 2011, an annual wellness visit providing
personalized prevention plan services. The Secretary exercises the
authority granted under the statute to also exclude from the OPPS
certain services that are paid under fee schedules or other payment
systems. Such excluded services include, for example, the professional
services of physicians and nonphysician practitioners paid under the
Medicare Physician Fee Schedule (MPFS); certain laboratory services
paid under the Clinical Laboratory Fee Schedule (CLFS); services for
beneficiaries with end-stage renal disease (ESRD) that are paid under
the ESRD prospective payment system; and services and procedures that
require an inpatient stay that are paid under the hospital IPPS. In
addition, section 1833(t)(1)(B)(v) of the Act does not include
applicable items and services (as defined in subparagraph (A) of
paragraph (21)) that are furnished on or after January 1, 2017 by an
off-campus outpatient department of a provider (as defined in
subparagraph (B) of paragraph (21)). We set forth the services that are
excluded from payment under the OPPS in regulations at 42 CFR 419.22.
Under Sec. 419.20(b) of the regulations, we specify the types of
hospitals that are excluded from payment under the OPPS. These excluded
hospitals are:
Critical access hospitals (CAHs);
Hospitals located in Maryland and paid under Maryland's
All-Payer or Total Cost of Care Model;
Hospitals located outside of the 50 States, the District
of Columbia, and Puerto Rico; and
Indian Health Service (IHS) hospitals.
D. Prior Rulemaking
On April 7, 2000, we published in the Federal Register a final rule
with comment period (65 FR 18434) to implement a prospective payment
system for hospital outpatient services. The hospital OPPS was first
implemented for services furnished on or after August 1, 2000. Section
1833(t)(9)(A) of the Act requires the Secretary to review certain
components of the OPPS, not less often than 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.
[[Page 71756]]
E. Advisory Panel on Hospital Outpatient Payment (the HOP Panel or the
Panel)
1. Authority of the Panel
Section 1833(t)(9)(A) of the Act, as amended by section 201(h) of
Public Law 106-113, and redesignated by section 202(a)(2) of Public Law
106-113, requires that we consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
annually review (and advise the Secretary concerning) the clinical
integrity of the payment groups and their weights under the OPPS. In CY
2000, based on section 1833(t)(9)(A) of the Act, the Secretary
established the Advisory Panel on Ambulatory Payment Classification
Groups (APC Panel) to fulfill this requirement. In CY 2011, based on
section 222 of the Public Health Service Act (the PHS Act), which gives
discretionary authority to the Secretary to convene advisory councils
and committees, the Secretary expanded the panel's scope to include the
supervision of hospital outpatient therapeutic services in addition to
the APC groups and weights. To reflect this new role of the panel, the
Secretary changed the panel's name to the Advisory Panel on Hospital
Outpatient Payment (the HOP Panel or the Panel). The HOP Panel is not
restricted to using data compiled by CMS, and in conducting its review,
it may use data collected or developed by organizations outside the
Department.
2. Establishment of the Panel
On November 21, 2000, the Secretary signed the initial charter
establishing the Panel, and, at that time, named the APC Panel. This
expert panel is composed of appropriate representatives of providers
(currently employed full-time, not as consultants, in their respective
areas of expertise) who review clinical data and advise CMS about the
clinical integrity of the APC groups and their payment weights. Since
CY 2012, the Panel also is charged with advising the Secretary on the
appropriate level of supervision for individual hospital outpatient
therapeutic services. The Panel is technical in nature, and it is
governed by the provisions of the Federal Advisory Committee Act
(FACA). The current charter specifies, among other requirements, that
the Panel--
May advise on the clinical integrity of Ambulatory Payment
Classification (APC) groups and their associated weights;
May advise on the appropriate supervision level for
hospital outpatient services;
May advise on OPPS APC rates for ASC covered surgical
procedures;
Continues to be technical in nature;
Is governed by the provisions of the FACA;
Has a Designated Federal Official (DFO); and
Is chaired by a Federal Official designated by the
Secretary.
The Panel's charter was amended on November 15, 2011, renaming the
Panel and expanding the Panel's authority to include supervision of
hospital outpatient therapeutic services and to add critical access
hospital (CAH) representation to its membership. The Panel's charter
was also amended on November 6, 2014 (80 FR 23009), and the number of
members was revised from up to 19 to up to 15 members. The Panel's
current charter was approved on November 20, 2020, for a 2-year period.
The current Panel membership and other information pertaining to
the Panel, including its charter, Federal Register notices, membership,
meeting dates, agenda topics, and meeting reports, can be viewed on the
CMS website at: https://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/AdvisoryPanelonAmbulatoryPaymentClassificationGroups.html.
3. Panel Meetings and Organizational Structure
The Panel has held many meetings, with the last meeting taking
place on August 22, 2022. Prior to each meeting, we publish a notice in
the Federal Register to announce the meeting, new members, and any
other changes of which the public should be aware. Beginning in CY
2017, we have transitioned to one meeting per year (81 FR 31941). In CY
2018, we published a Federal Register notice requesting nominations to
fill vacancies on the Panel (83 FR 3715). CMS is currently accepting
nominations at: https://mearis.cms.gov. 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 22, 2022, 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 https://facadatabase.gov.
Comment: One commenter requested that CMS include at least one
representative from the ASC community in the membership of the advisory
Panel. The commenter explained that decisions regarding the clinical
integrity of payment groups and relative payment weights impact ASC
payments and, therefore, are of critical importance to ASCs.
Response: We thank the commenter for their suggestion. This expert
panel is composed of appropriate representatives of providers
(currently employed full-time by hospitals or hospital systems, 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. Beginning in 2019, the Panel may also
include a representative of a provider with ASC expertise, who advises
CMS only on OPPS APC rates, as appropriate, impacting ASC covered
procedures within the context and purview of the Panel's scope.
Interested individuals, including those with relevant ASC expertise,
are encouraged to apply to serve on the Panel. Nominations for the
Panel are currently being accepted in the new electronic application
system, Medicare Electronic Application Request Information
SystemTM (MEARIS). Interested individuals may submit
nominations for themselves or others on https://mearis.cms.gov.
[[Page 71757]]
F. Public Comments Received on the CY 2023 OPPS/ASC Proposed Rule
We received approximately 1,599 timely pieces of correspondence on
the CY 2023 OPPS/ASC proposed rule that appeared in the Federal
Register on July 27, 2022 (87 FR 44502) from individuals, elected
officials, providers and suppliers, practitioners, and advocacy groups.
We provide summaries of the public comments and our responses are set
forth in the various sections of this final rule with comment period
under the appropriate headings.
G. Public Comments Received on the CY 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. Updates Affecting OPPS Payments
A. 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
section X.D of the CY 2023 OPPS/ASC proposed rule (87 FR 44680 through
44682), 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.B.
of this final rule with comment period, we are finalizing our proposal
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 Ambulatory Payment Classifications (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 proposed 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 proposed to
recalibrate the relative payment weights for each APC based on claims
and cost report data for hospital outpatient department (HOPD) services
to construct a database for calculating APC group weights.
For the purpose of recalibrating the proposed APC relative payment
weights for CY 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: https://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: https://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 proposed 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 the CY 2023 OPPS/ASC proposed rule. HCPCS codes that we
proposed to add for CY 2023 are identified by asterisks (*) in the
fourth column of Addendum N.
We did not receive any public comments on our general proposal to
recalibrate the relative payment weights for each APC based on claims
and cost report data for HOPD services or on our proposed bypass code
process. We are adopting as final the proposed ``pseudo'' single claims
process and the final CY 2023 list of bypass codes, as displayed in
Addendum N to this final rule with comment period (which is available
via the internet on the CMS website). For this final rule with comment
period, for the purpose of recalibrating the final APC relative payment
weights for CY 2023, we used approximately 93 million final actions
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. For exact numbers of
claims used and additional details on the claims accounting process, we
refer readers to the claims accounting narrative under supporting
documentation for this final rule with comment period on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
c. Calculation and Use of Cost-to-Charge Ratios (CCRs)
For CY 2023, we proposed to continue to use the hospital-specific
overall ancillary and departmental cost-to-charge ratios (CCRs) to
convert charges to estimated costs through application of a revenue
code-to-cost center crosswalk. 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 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 believed 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.
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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 proposed 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
ratesetting purposes. We discuss this proposal, the public comments we
received, as well as our final policy in Section X.B. of this final
rule with comment period.
To calculate the APC costs on which the CY 2023 APC payment rates
are based, we proposed 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 proposed 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:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
Comment: One commenter requested that we revise our revenue code-
to-cost center crosswalk to provide consistency with the National
Uniform Billing Committee (NUBC) definitions and to improve the
accuracy of cost data for OPPS ratesetting with respect to chimeric
antigen receptor therapy (CAR-T) administration services. The commenter
suggested the following changes:
Revising revenue code 0871 from Reserved to describe
``cell collection'' and that revenue code 0871 be mapped to a primary
cost center 6000 for clinic;
Revising revenue codes 0872 and 0873 from Reserved to
describe ``cell processing'' and remapping revenue codes 0872 and 0873
to a primary cost center 3350 for laboratory/hematology;
Map revenue codes 0874 or 0875 to cost center 4800 for
intravenous therapy in the revenue code-to-cost center crosswalk;
Map revenue code 089x series to cost center 5600 (drugs
charged to patients), or, at the very least, only map revenue codes
0891 and 0892 to cost center 5600.
Response: We appreciate the commenter's recommendation for changes
to our revenue code-to-cost center crosswalk. While we believe the
current APC assignment and payment rate for CPT code 0540T (Chimeric
antigen receptor t-cell (car-t) therapy; car-t cell administration,
autologous) is appropriate, we intend to explore the implications of
the commenter's recommendation further and may revisit these changes in
future rulemaking.
In accordance with our longstanding policy, we proposed to
calculate CCRs for the standard cost centers--cost centers with a
predefined label--and nonstandard cost centers--cost centers defined by
a hospital--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 proposed not to include the nonstandard cost centers
reported in this way in the OPPS ratesetting database construction. We
solicited 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 final rule with comment period.
Comment: One commenter supported our proposal and recommended that
we not use current nonstandard lines in determining OPPS payment rates
for CY 2023 without further understanding of the revenues and expenses
going into those nonstandard lines.
Response: We thank the commenter for their support. While we did
not receive any specific concerns from commenters with regards to the
data from these nonstandard cost center lines, we agree that additional
context for and analyses into these nonstandard lines would be
beneficial before including them in OPPS ratesetting.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, not to include
nonstandard cost centers on cost report lines that do not correspond to
the cost center number.
2. Final Data Development and Calculation of Costs Used for Ratesetting
In this section of this final rule with comment period, we discuss
the use of claims to calculate the OPPS payment
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rates for CY 2023. The Hospital OPPS page on the CMS website on which
this final rule with comment period is posted (https://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,
https://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 the final rule with comment period.
Previously, the OPPS established the scaled relative weights on
which payments are based using APC median costs, a process described in
the CY 2012 OPPS/ASC final rule with comment period (76 FR 74188).
However, as discussed in more detail in section II.A.2.f of the CY 2013
OPPS/ASC final rule with comment period (77 FR 68259 through 68271), we
finalized the use of geometric mean costs to calculate the relative
weights on which the CY 2013 OPPS payment rates were based. While this
policy changed the cost metric on which the relative payments are
based, the data process in general remained the same under the
methodologies that we used to obtain appropriate claims data and
accurate cost information in determining estimated service cost.
We used the methodology described in sections II.A.2.a through
II.A.2.c of this final rule with comment period to calculate the costs
we used to establish the proposed relative payment weights used in
calculating the OPPS payment rates for CY 2023 shown in Addenda A and B
to this final rule with comment period (which are available via the
internet on the CMS website at: https://www.cms.gov/Medicare/Medicare-Feefor-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html). We refer readers to section II.A.4 of
this final rule with comment period for a discussion of the 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
will continue to remove claim lines with modifier ``PN'' from the
ratesetting process.
For details of the claims accounting process used in this final
rule with comment period, we refer readers to the claims accounting
narrative under supporting documentation for this final rule with
comment period on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
a. Calculation of Single Procedure APC Criteria-Based Costs
(1) Blood and Blood Products
Since the implementation of the OPPS in August 2000, we have made
separate payments for blood and blood products through APCs rather than
packaging payment for them into payments for the procedures with which
they are administered. Hospital payments for the costs of blood and
blood products, as well as for the costs of collecting, processing, and
storing blood and blood products, are made through the OPPS payments
for specific blood product APCs.
We proposed in the CY 2023 OPPS/ASC proposed rule to continue to
establish payment rates for blood and blood products using our blood-
specific CCR methodology, which utilizes actual or simulated CCRs from
the most recently available hospital cost reports to convert hospital
charges for blood and blood products to costs. This methodology has
been our standard ratesetting methodology for blood and blood products
since CY 2005. It was developed in response to data analysis indicating
that there was a significant difference in CCRs for those hospitals
with and without blood-specific cost centers, and past public comments
indicating that the former OPPS policy of defaulting to the overall
hospital CCR for hospitals not reporting a blood-specific cost center
often resulted in an underestimation of the true hospital costs for
blood and blood products. Specifically, to address the differences in
CCRs and to better reflect hospitals' costs, we proposed to continue to
simulate blood CCRs for each hospital that does not report a blood cost
center by calculating the ratio of the blood-specific CCRs to
hospitals' overall CCRs for those hospitals that do report costs and
charges for blood cost centers. We also proposed to apply this mean
ratio to the overall CCRs of hospitals not reporting costs and charges
for blood cost centers on their cost reports to simulate blood-specific
CCRs for those hospitals. We proposed to calculate the costs upon which
the proposed CY 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
proposed to continue to apply the blood-specific CCR methodology
described in this section when calculating the costs of the blood and
blood products that appear on claims with services assigned to the C-
APCs. Because the costs of blood and blood products would be reflected
in the overall costs of the C-APCs (and, as a result, in the proposed
payment rates of the C-APCs), we proposed not to make
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separate payments for blood and blood products when they appear on the
same claims as services assigned to the C-APCs (we refer readers to the
CY 2015 OPPS/ASC final rule with comment period (79 FR 66795 through
66796) for more information about our policy not to make separate
payments for blood and blood products when they appear on the same
claims as services assigned to a C-APC).
We refer readers to Addendum B to the CY 2023 OPPS/ASC 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 proposed to continue to establish payment rates for
blood and blood products using our blood-specific CCR methodology. We
did not receive any comments on our proposal to establish payment rates
for blood and blood products using our blood-specific CCR methodology
and we are finalizing this policy as proposed. Please refer to Addendum
B to this final rule with comment period (which is available via the
internet on the CMS website) for the final CY 2023 payment rates for
blood and blood products.
(2) Brachytherapy Sources
Section 1833(t)(2)(H) of the Act mandates the creation of
additional groups of covered OPD services that classify devices of
brachytherapy--cancer treatment through solid source radioactive
implants--consisting of a seed or seeds (or radioactive source)
(``brachytherapy sources'') separately from other services or groups of
services. The statute provides certain criteria for the additional
groups. For the history of OPPS payment for brachytherapy sources, we
refer readers to prior OPPS final rules, such as the CY 2012 OPPS/ASC
final rule with comment period (77 FR 68240 through 68241). As we have
stated in prior OPPS updates, we believe that adopting the general OPPS
prospective payment methodology for brachytherapy sources is
appropriate for a number of reasons (77 FR 68240). The general OPPS
methodology uses costs based on claims data to set the relative payment
weights for hospital outpatient services. This payment methodology
results in more consistent, predictable, and equitable payment amounts
per source across hospitals by averaging the extremely high and low
values, in contrast to payment based on hospitals' charges adjusted to
costs. We believe that the OPPS methodology, as opposed to payment
based on hospitals' charges adjusted to cost, also would provide
hospitals with incentives for efficiency in the provision of
brachytherapy services to Medicare beneficiaries. Moreover, this
approach is consistent with our payment methodology for the vast
majority of items and services paid under the OPPS. We refer readers to
the CY 2016 OPPS/ASC final rule with comment period (80 FR 70323
through 70325) for further discussion of the history of OPPS payment
for brachytherapy sources.
For CY 2023, except where otherwise indicated, we proposed 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 proposed 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 the CY 2023 OPPS/ASC proposed rule
(87 FR 44568 through 44569), we proposed to base the payment rates for
brachytherapy sources on the geometric mean unit costs for each source,
consistent with the methodology that we propose for other items and
services paid under the OPPS, as discussed in section II.A.2. of the CY
2023 OPPS/ASC proposed rule (87 FR 44512 through 44513). We also
proposed to continue the other payment policies for brachytherapy
sources that we finalized and first implemented in the CY 2010 OPPS/ASC
final rule with comment period (74 FR 60537). We proposed to pay for
the stranded and nonstranded not otherwise specified (NOS) codes, HCPCS
codes C2698 (Brachytherapy source, stranded, not otherwise specified,
per source) and C2699 (Brachytherapy source, non-stranded, not
otherwise specified, per source), at a rate equal to the lowest
stranded or nonstranded prospective payment rate for such sources,
respectively, on a per-source basis (as opposed to, for example, per
mCi), which is based on the policy we established in the CY 2008 OPPS/
ASC final rule with comment period (72 FR 66785). We also proposed to
continue the policy we first implemented in the CY 2010 OPPS/ASC final
rule with comment period (74 FR 60537) regarding payment for new
brachytherapy sources for which we have no claims data, based on the
same reasons we discussed in the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66786; which was delayed until January 1, 2010,
by section 142 of Pub. L. 110-275). Specifically, this policy is
intended to enable us to assign new HCPCS codes for new brachytherapy
sources to their own APCs, with prospective payment rates set based on
our consideration of external data and other relevant information
regarding the expected costs of the sources to hospitals. The proposed
CY 2023 payment rates for brachytherapy sources are included on
Addendum B to the CY 2023 OPPS/ASC proposed rule (which is available
via the internet on the CMS website) and identified with status
indicator ``U''.
For CY 2018, we assigned status indicator ``U'' (Brachytherapy
Sources, Paid under OPPS; separate APC payment) to HCPCS code C2645
(Brachytherapy planar source, palladium-103, per square millimeter) in
the absence of claims data and established a payment rate using
external data (invoice price) at $4.69 per mm\2\. For CY 2019, in the
absence of sufficient claims data, we continued to establish a payment
rate for C2645 at $4.69 per mm\2\. Our CY 2018 claims data available
for the CY 2020 OPPS/ASC final rule with comment period included two
claims with a geometric mean cost for HCPCS code C2645 of $1.02 per
mm\2\. In response to comments from interested parties, 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
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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 proposed to use our equitable adjustment authority under
section 1833(t)(2)(E) of the Act to maintain the CY 2019 payment rate
of $4.69 per mm\2\ for HCPCS code C2645 for CY 2023.
Additionally, for CY 2022 and subsequent calendar years, we adopted
a Universal Low Volume APC policy for clinical and brachytherapy APCs.
As discussed in further detail in section X.C of the CY 2022 OPPS/ASC
final rule with comment period (86 FR 63743 through 63747), we adopted
this policy to mitigate wide variation in payment rates that occur from
year to year for APCs with low utilization. Such volatility in payment
rates from year to year can result in even lower utilization and
potential barriers to access. For these Low Volume APCs, which had
fewer than 100 CY 2021 single claims used for ratesetting purposes in
the CY 2023 OPPS/ASC proposed rule, we used up to four 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 calculated 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 four years.
For CY 2023, we proposed to designate 4 brachytherapy APCs as Low
Volume APCs as these APCs meet our criteria to be designated as a Low
Volume APC. For more information on the brachytherapy APCs we proposed
to designate as Low Volume APCs, see section III.D of the CY 2023 OPPS/
ASC proposed rule (87 FR 44568 through 44569). In section III.D. of
this final rule with comment period, we are finalizing our proposal to
designate four brachytherapy APCs as Low Volume APCs for CY 2023.
Comment: One commenter supported our proposal 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.
Response: We thank the commenter for their support of our proposal.
After consideration of the public comment we received, we are
finalizing our proposal, without modification, to use our equitable
adjustment authority under section 1833(t)(2)(E) of the Act to maintain
the CY 2019 payment rate of $4.69 per mm\2\ for HCPCS code C2645 for CY
2023. Additionally, we are finalizing our proposal to continue to set
the payment rates for other brachytherapy sources that are not
otherwise assigned to designated Low Volume APCs for CY 2023 using our
established prospective payment methodology.
The final CY 2023 payment rates for brachytherapy sources are
included in Addendum B to this final rule with comment period (which is
available via the internet on the CMS website) and are identified with
status indicator ``U''.
We continue to invite interested parties 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 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. One example of a primary service would be a partial mastectomy
and an example of a secondary service packaged into that primary
service would be a radiation therapy procedure.
Services excluded from the C-APC policy under the OPPS include
services that are not covered OPD services, services that cannot by
statute be paid for under the OPPS, and services that are required by
statute to be separately paid. This includes certain mammography and
ambulance services that are not covered OPD services in accordance with
section 1833(t)(1)(B)(iv) of the Act; brachytherapy seeds, which also
are required by statute to receive separate payment under section
1833(t)(2)(H) of the Act; pass-through payment drugs and devices, which
also require separate payment under section 1833(t)(6) of the Act;
self-administered drugs (SADs) that are not otherwise packaged as
supplies because they are not covered under Medicare Part B under
section 1861(s)(2)(B) of the Act; and certain preventive services (78
FR 74865 and 79 FR 66800 through 66801). A list of services excluded
from the C-APC policy is included in Addendum J to this final rule with
comment period (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
[[Page 71762]]
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 Food and Drug
Administration (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).
Please see section XXIII.C. for additional details regarding our
finalized policy, which will end when the PHE ends.
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'',\1\
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.
---------------------------------------------------------------------------
\1\ Status indicator ``J1'' denotes Hospital Part B Services
Paid Through a Comprehensive APC. Further information can be found
in CY 2023 Addendum D1.
---------------------------------------------------------------------------
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''.\2\ Specifically, we make a payment through C-
APC 8011 for a claim that:
---------------------------------------------------------------------------
\2\ Status indicator ``J2'' denotes Hospital Part B Services
That May Be Paid Through a Comprehensive APC. Further information
can be found in CY 2023 Addendum D1.
---------------------------------------------------------------------------
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 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, such as speech language
pathology, 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
[[Page 71763]]
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.\3\
---------------------------------------------------------------------------
\3\ https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/bp102c15.pdf.
---------------------------------------------------------------------------
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 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
[[Page 71764]]
qualify for a complexity adjustment for CY 2023, we proposed to apply
the frequency and cost criteria thresholds discussed above, testing
claims reporting one unit of a single primary service assigned to
status indicator ``J1'' and any number of units of a single add-on code
for the primary ``J1'' service. If the frequency and cost criteria
thresholds for a complexity adjustment are met and reassignment to the
next higher cost APC in the clinical family is appropriate (based on
meeting the criteria outlined above), we make a complexity adjustment
for the code combination; that is, we reassign the primary service code
reported in conjunction with the add-on code to the next higher cost C-
APC within the same clinical family of C-APCs. As previously stated, we
package payment for add-on codes into the C-APC payment rate. If any
add-on code reported in conjunction with the ``J1'' primary service
code does not qualify for a complexity adjustment, payment for the add-
on service continues to be packaged into the payment for the primary
service and is not reassigned to the next higher cost C-APC. We list
the complexity adjustments for ``J1'' and add-on code combinations for
CY 2023, along with all of the other final complexity adjustments, in
Addendum J to this final rule comment period (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 final rule with comment period 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 final rule with comment period 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 will be reassigned to the next
higher cost C-APC within the clinical family. The combined statistics
for all final 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 final 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 will be reassigned to C-APC 5224 when CPT code 33208
is the primary code. Providing the information contained in Addendum J
to the CY 2023 OPPS/ASC final rule allows interested parties the
opportunity to better assess the impact associated with the assignment
of claims with each of the paired code combinations eligible for a
complexity adjustment.
Comment: Multiple commenters requested that CMS apply a complexity
adjustment to additional code combinations. The specific C-APC
complexity adjustment code combinations requested by the commenters for
CY 2023 are listed in Table 1 below.
BILLING CODE 4120-01-P
[[Page 71765]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.001
[[Page 71766]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.002
BILLING CODE 4120-01-C
Response: We reviewed the requested code combinations suggested by
commenters, listed in Table 1, against our complexity adjustment
criteria. The code combination for primary HCPCS code 52000 with
secondary HCPCS code C9738 met our cost and frequency criteria,
qualifying for a complexity adjustment for CY 2023. The remaining code
combinations failed to meet our cost or frequency criteria and do not
qualify for complexity adjustments for CY 2023. Addendum J to the CY
2023 OPPS/ASC final rule with comment period includes the cost
statistics for each code combination that was evaluated for a
complexity adjustment.
We note that one code combination, HCPCS 20902 and HCPCS 28740,
requested by comments was already proposed in the CY 2023 OPPS/ASC
proposed rule and is being finalized in
[[Page 71767]]
this final rule with comment period as a qualifying complexity
adjustment. Additionally, one code combination commenters requested,
HCPCS 37243 and HCPCS C1983, does not qualify for a complexity
adjustment because the secondary code, C1983, is not an add-on code and
does not have a J1 status indicator. Accordingly, this code combination
was not evaluated for a CY 2023 complexity adjustment.
Comment: We also received support from commenters for a variety of
existing and proposed complexity adjustments, including neurostimulator
procedures as well as fusion and bunion surgery procedures.
Response: We thank the commenters for their support.
Comment: Several commenters requested that CMS modify or eliminate
the established C-APC complexity adjustment eligibility criteria of 25
or more claims reporting the code combination (frequency) and a
violation of the 2 times rule in the originating C-APC (cost) to allow
additional code combinations to qualify for complexity adjustments.
Some commenters expressed concern that CMS' methodology for determining
complexity adjustments is unnecessarily restrictive, particularly the
25-claim threshold, and suggested that CMS implement a complexity
adjustment whenever a code pair exceeds the cost threshold.
Several commenters reiterated their request to allow clusters of
procedures, consisting of a ``J1'' code pair and multiple other
associated add-on codes used in combination with that ``J1'' code pair
to qualify for complexity adjustments, stating that this may allow for
more accurate reflection of medical practice when multiple procedures
are performed together or there are certain complex procedures that
include numerous add-on codes. Commenters also requested that CMS
continue to monitor and report on the impact of complexity adjustments.
Response: We appreciate these comments. At this time, we do not
believe changes to the C-APC complexity adjustment criteria are
necessary or that we should make exceptions to the criteria to allow
claims with the code combinations suggested by the commenters to
receive complexity adjustments. As we stated in the CY 2017 OPPS/ASC
final rule (81 FR 79582), we believe that the complexity adjustment
criteria, which require a frequency of 25 or more claims reporting a
code combination and a violation of the 2 times rule in the originating
C-APC, are appropriate to determine if a combination of procedures
represents a complex, costly subset of the primary service that should
qualify for the adjustment and be paid at the next higher paying C-APC
in the clinical family. As we previously stated in the CY 2020 OPPS/ASC
final rule with comment period (84 FR 61161), a minimum of 25 claims is
already a very low threshold for a national payment system. Lowering
the minimum of 25 claims further could lead to unnecessary complexity
adjustments for service combinations that are rarely performed.
As we explained in the CY 2019 OPPS/ASC final rule with comment
period (83 FR 58843), we do not believe that it is necessary to adjust
the complexity adjustment criteria to allow claims that include more
than two ``J1'' procedures or procedures that are not assigned to C-
APCs to qualify for a complexity adjustment. As previously mentioned,
we believe the current criteria are adequate to determine if a
combination of procedures represents a complex, costly subset of the
primary service. We will continue to monitor the application of the
complexity adjustment criteria.
After consideration of the public comments we received on the
proposed complexity adjustment policy, we are finalizing the C-APC
complexity adjustment policy for CY 2023 as proposed. We are also
finalizing the proposed complexity adjustments with the addition of the
one new code combination, primary HCPCS code 52000 with secondary HCPCS
code C9738, that meet our complexity adjustment criteria.
(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'' when they are included on a claim with a ``J2''
service (84 FR 61167). We proposed to continue to exclude payment for
any procedure that is assigned to a New Technology APC (APCs 1491
through 1599 and APCs 1901 through 1908) from being packaged when
included on a claim with a ``J1'' or ``J2'' service assigned to a C-
APC. We did not receive any public comments on this policy and are
finalizing it as proposed.
(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
[[Page 71768]]
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 proposed
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 final CY 2023
comprehensive APC payment policy exclusions.
We also included a corresponding proposal in section XI ``Proposed
CY 2023 OPPS Payment Status and Comment Indicators'' of the CY 2023
OPPS/ASC proposed rule (87 FR 44698), to add a new definition to status
indicator ``A'' to include unclassified drugs and biologicals that are
reportable with HCPCS code C9399. The definition, found in Addendum D1
to the CY 2023 OPPS/ASC 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.
Comment: Interested parties expressed support of the proposal to
exclude C9399 from ``J1'' and ``J2'' claims and to add a new definition
to status indicator ``A'' to include unclassified drugs and biologicals
that are reportable with C9399.
Response: We thank commenters for their support.
After consideration of the public comments we received, 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 are finalizing, without modification, our proposal
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 the section titled ``CY 2023 OPPS
Payment Status and Comment Indicators'' of this CY 2023 OPPS/ASC final
rule with comment period for details regarding the new definition of
status indicator ``A''.
(4) Additional C-APCs for CY 2023
For CY 2023, we proposed to continue to apply the C-APC payment
policy methodology. We refer readers to the CY 2017 OPPS/ASC final rule
with comment period (81 FR 79583) for a discussion of the C-APC payment
policy methodology and revisions.
Each year, in accordance with section 1833(t)(9)(A) of the Act, we
review and revise the services within each APC group and the APC
assignments under the OPPS. As a result of our annual review of the
services and the APC assignments under the OPPS, we proposed to add one
C-APC under the existing C-APC payment policy in CY 2023: C-APC 5372
(Level 2 Urology and Related Services). This APC was proposed because,
similar to other C-APCs, this APC included 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 were
previously converted to C-APCs.
Comment: Commenters supported the creation of the new proposed C-
APC, based on resource cost and clinical characteristics.
Response: We appreciate the commenters' support.
Comment: Several commenters were concerned that the C-APC
methodology lacks the charge capture mechanisms to accurately reflect
the cost of radiation oncology services, particularly the delivery of
brachytherapy for the treatment of cervical cancer. They stated that
this type of cancer disproportionately impacts minorities, women, and
rural populations and that undervaluing brachytherapy procedures risks
exacerbating existing disparities in treatment. These commenters
suggested that CMS discontinue the C-APC payment policy for all
brachytherapy insertion codes and allow these procedures to be reported
through
[[Page 71769]]
traditional APCs, move brachytherapy procedures (CPT codes 57155 and
58346) to higher paying C-APCs, or pay separately for preparation and
planning services to more fully account for the costs associated with
these procedures.
Response: We appreciate the comments. The calculations provided by
commenters as to the cost of these services do not match how we
calculate C-APC costs. We believe that the current C-APC methodology is
appropriately applied to these surgical procedures and is accurately
capturing costs, particularly as the brachytherapy sources used for
these procedures are excluded from C-APC packaging and are separately
payable. This methodology also enables hospitals to manage their
resources with maximum flexibility by monitoring and adjusting the
volume and efficiency of services themselves.
We also reviewed the request by commenters to move brachytherapy
procedures, CPT code 57155 and CPT code 58346, to a higher paying C-
APC. For CPT code 57155, the claims data in the two times rule
evaluation show that this code is being paid at the appropriate level
in C-APC 5415 (Level 5 Gynecologic Procedures). For CPT code 53846,
given that this code has less than 100 claims, it does not meet the
significance threshold of the two times rule evaluation and we do not
believe the few claims available provide an accurate reflection of the
service's cost sufficient to move this procedure to a higher C-APC. We
will continue to examine these concerns and will determine if any
modifications to this policy are warranted in future rulemaking.
After consideration of the public comments we received, we are
finalizing as proposed C-APC 5372 (Level 2 Urology and Related
Services) for CY 2023. Table 2 lists the final C-APCs for CY 2023. All
C-APCs are displayed in Addendum J to this CY 2023 OPPS/ASC final rule
with comment period (which is available via the internet on the CMS
website). Addendum J to this final rule with comment period also
contains all of the data related to the C-APC payment policy
methodology, including the list of complexity adjustments and other
information for CY 2023.
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c. Calculation of Composite APC Criteria-Based Costs
As discussed in the CY 2008 OPPS/ASC final rule with comment period
(72 FR 66613), we believe it is important that the OPPS enhance
incentives for hospitals to provide necessary, high quality care as
efficiently as possible. For CY 2008, we developed composite APCs to
provide a single payment for groups of services that are typically
performed together during a single clinical encounter and that result
in the provision of a complete service. Combining payment for multiple,
independent services into a single OPPS payment in this way enables
hospitals to manage their resources with maximum flexibility by
monitoring and adjusting the volume and efficiency of services
themselves. An additional advantage to the composite APC model is that
we can use data from correctly coded multiple procedure claims to
calculate payment rates for the specified combinations of services,
rather than relying upon single procedure claims which may be low in
volume and/or incorrectly coded. Under the OPPS, we currently have
composite policies for mental health services and multiple imaging
services. We refer readers to the CY 2008 OPPS/ASC final rule with
comment period (72 FR 66611 through 66614 and 66650 through 66652) for
a full discussion of the development of the composite APC methodology,
and the CY 2012 OPPS/ASC final rule with comment period (76 FR 74163)
and the CY 2018 OPPS/ASC final rule with comment period (82 FR 59241
through 59242 and 59246 through 52950) for more recent background.
(1) Mental Health Services Composite APC
We proposed to continue our longstanding policy of limiting the
aggregate payment for specified less resource-intensive mental health
services furnished on the same date to the payment for a day of partial
hospitalization services provided by a hospital, which we consider to
be the most resource-intensive of all outpatient mental health
services. We refer readers to the April 7, 2000 OPPS final rule with
comment period (65 FR 18452 through 18455) for the initial discussion
of this longstanding policy and the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74168) for more recent background.
In the CY 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 Integrated OCE (I/OCE) will
continue to determine whether to pay for these specified mental health
services individually, or to make a single payment at the same payment
rate established for APC 5863 for all of the specified mental health
services furnished by the hospital on that single date of service. We
continue to believe that the costs associated with administering a
partial hospitalization program at a hospital represent the most
resource intensive of all outpatient mental health services. Therefore,
we do not believe that we should pay more for mental health services
under the OPPS than the highest partial hospitalization per diem
payment rate for hospitals.
We proposed that when the aggregate payment for specified mental
health services provided by one hospital to a single beneficiary on a
single date of service, based on the payment rates associated with the
APCs for the individual services, exceeds the maximum per diem payment
rate for partial hospitalization services provided by a hospital, those
specified mental health services would be paid through composite APC
8010 for CY 2023. In addition, we proposed to set the payment rate for
composite APC 8010 at the same payment rate that we proposed for APC
5863, which is the maximum partial hospitalization per diem payment
rate for a hospital, and that the hospital continue to be paid the
proposed payment rate for composite APC 8010.
Comment: Several commenters recommended that CMS change the status
indicator for two neuropsychological testing codes (HCPCS 96133 and
96137) from SI = N to SI = Q3 to allow separate payment for additional
hours of testing on the same date or increase the payment rate for the
primary testing procedure code. The commenters noted that the payment
rate for Composite APC 8010, which is capped at the maximum per diem
partial hospitalization rate, is lower than the individual HCPCS code
APC payment rates and does not provide sufficient payment for these
procedures.
Response: After reviewing this issue, we believe the Composite APC
methodology is being appropriately applied in this case, as packaging
multiple testing services performed on a single date of service creates
incentives for hospitals to provide these services in the most cost-
efficient manner. We will continue to examine these concerns and will
determine if any modifications to this policy are warranted in future
rulemaking.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, that when the aggregate
payment for specified mental health services provided by one hospital
to a single beneficiary on a single date of service, based on the
payment rates associated with the APCs for the individual services,
exceeds the maximum per diem payment rate for partial hospitalization
services provided by a hospital, those specified mental health services
would be paid through composite APC 8010 for CY 2023. In addition, we
are finalizing our proposal to set the payment rate for composite APC
8010 for CY 2023 at the same payment rate that we set for APC 5863,
which is the maximum partial hospitalization per diem payment rate for
a hospital.
(2) Multiple Imaging Composite APCs (APCs 8004, 8005, 8006, 8007, and
8008)
Effective January 1, 2009, we provide a single payment each time a
hospital submits a claim for more than one imaging procedure within an
imaging family on the same date of service, to reflect and promote the
efficiencies hospitals can achieve when performing multiple imaging
procedures during a single session (73 FR 41448 through 41450). We
utilize three imaging families based on imaging modality for purposes
of this methodology: (1) ultrasound; (2) computed tomography (CT) and
computed tomographic angiography (CTA); and (3) magnetic resonance
imaging (MRI) and magnetic resonance angiography (MRA). The HCPCS codes
subject to the multiple imaging composite policy and their respective
families are listed in Table 3 below.
While there are three imaging families, there are five multiple
imaging
[[Page 71773]]
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 proposed to continue to pay for all multiple
imaging procedures within an imaging family performed on the same date
of service using the multiple imaging composite APC payment
methodology. We continue to believe that this policy would reflect and
promote the efficiencies hospitals can achieve when performing multiple
imaging procedures during a single session.
For CY 2023, except where otherwise indicated, we proposed 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 the CY 2023 OPPS/ASC 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
have used 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 final rule (which is available via the internet on
the CMS website \4\) and are discussed in more detail in section
II.A.1.b of this final rule with comment period.
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\4\ CY 2023 Medicare Hospital Outpatient Prospective Payment
System and Ambulatory Surgical Center Payment System Proposed Rule
(CMS-1772-P); Notice of Final Rulemaking. Available at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
---------------------------------------------------------------------------
In the CY 2023 OPPS/ASC proposed rule, for CY 2023, we were 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 3
of the CY 2023 OPPS/ASC final rule with comment period lists the final
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.
We did not receive any public comments on this policy. We are
finalizing continuing the use of multiple imaging composite APCs to pay
for services providing more than one imaging procedure from the same
family on the same date, without modification. Table 3 below lists the
HCPCS codes that will be subject to the multiple imaging composite APC
policy and their respective families and approximate composite APC
final geometric mean costs for CY 2023.
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3. Changes to Packaged Items and Services
a. Background and Rationale for Packaging in the OPPS
Like other prospective payment systems, the OPPS relies on the
concept of averaging to establish a payment rate for services. The
payment may be more or less than the estimated cost of providing a
specific service or a bundle of specific services for a particular
beneficiary. The OPPS packages
[[Page 71778]]
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. Policy 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 did not propose any changes to the overall
packaging policy previously discussed. We proposed to continue to
conditionally package the costs of selected newly identified ancillary
services into payment for a primary service where we believe that the
packaged item or service is integral, ancillary, supportive, dependent,
or adjunctive to the provision of care that was reported by the primary
service HCPCS code.
While we did not propose any changes to the overall packaging
policy above, we solicited comments on potential modifications to our
packaging policy, as described in section XIII.E.5 of the CY 2023 OPPS/
ASC proposed rule (87 FR 44717). Specifically, we solicited 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 section XIII.E of this final rule
with comment period.
We did not receive any public comments on our overall OPPS
packaging policy and therefore, we are continuing the OPPS packaging
policy for CY 2023 without modification. Specific packaging concerns
are discussed in detail in their respective sections throughout this
final rule with comment period.
As discussed above and in the proposed rule, we solicited 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 section XIII.E of this final rule
with comment period. Below is a summary of the comments received in
response to the comment solicitation.
Comment: Many commenters suggested CMS extend the policy described
at Sec. 416.174 to also encompass the HOPD setting. Generally,
commenters believed these products serve a valuable clinical purpose
and their use should be encouraged in all settings of care. Several
commenters provided data regarding how packaging negatively impacted
the utilization of their products in the HOPD. Some commenters conceded
that it is reasonable to think that the average hospital outpatient
department would be able to absorb the extra costs; however, they
believe that does not mean that every hospital outpatient department
would be able to do so.
Commenters also presented data showing potential access barriers
affecting underserved communities. Commenters believed that the HOPD
setting is more accessible to vulnerable and underserved populations
relative to the ASC setting. Commenters stated that these are the
populations that are also most negatively impacted by opioids.
Response: We thank commenters for their comments on the comment
solicitation to expand the non-opioid drug or biological payment policy
to the HOPD setting. We will take these comments into consideration for
future rulemaking. We remind interested parties that we are not
modifying our policy at Sec. 416.174 or creating new policies in
response to these comment solicitations. Any change to or expansion of
the policy described at Sec. 416.174 would be done through notice and
comment rulemaking.
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
[[Page 71779]]
with comment period (86 FR 63466 through 63483). For CY 2023, as we did
for CY 2022, we proposed 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 Evaluation or Assessment and Management (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 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 discussed 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
proposed to apply the same process using the estimated CY 2023 unscaled
relative payment weights rather than scaled relative payment weights.
We proposed 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 NFRM OPPS Claims Accounting
(PDF)''.
We proposed 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 proposed to adjust the calculated CY 2023 unscaled
relative payment weights for purposes of budget neutrality. We proposed
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 the CY 2023 OPPS/ASC proposed rule (which are
available via the internet on the CMS website) are scaled and
incorporate the recalibration adjustments discussed in sections II.A.1
and II.A.2 of this CY 2023 OPPS/ASC proposed rule (87 FR 44510 through
44525).
Section 1833(t)(14) of the Act provides the payment rates for
certain specified covered outpatient drugs (SCODs). Section
1833(t)(14)(H) of the Act provides that additional expenditures
resulting from this paragraph shall not be taken into account in
establishing the conversion factor, weighting, and other adjustment
factors for 2004 and 2005 under paragraph (9), but shall be taken into
account for subsequent years. Therefore, the cost of those SCODs (as
discussed in section V.B.2 of the CY 2023 OPPS/ASC proposed rule (87 FR
44644 through 44646)) is included in the budget neutrality calculations
for the CY 2023 OPPS.
We did not receive any public comments on the proposed weight
scalar calculation. Therefore, we are finalizing our proposal to use
the calculation process described in the proposed rule, without
modification, for CY 2023. For CY 2023, as we did for CY 2022, we will
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 2023, as we did for CY 2022, we will assign APC
[[Page 71780]]
5012 a relative payment weight of 1.00 and we will 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. To comply with this
requirement concerning the APC changes, we will compare the estimated
aggregate weight using the CY 2022 scaled relative payment weights to
the estimated aggregate weight using the CY 2023 unscaled relative
payment weights.
Using updated final rule claims data, we are updating the estimated
CY 2023 unscaled relative payment weights by multiplying them by a
weight scalar of 1.4122 to ensure that the final CY 2023 relative
payment weights are scaled to be budget neutral. The final CY 2023
relative payments weights listed in Addenda A and B of this final rule
with comment period (which are available via the internet on the CMS
website) were scaled and incorporate the recalibration adjustments
discussed in sections II.A.1 and II.A.2 of this final rule with comment
period.
B. Conversion Factor Update
Section 1833(t)(3)(C)(ii) of the Act requires the Secretary to
update the conversion factor used to determine the payment rates under
the OPPS on an annual basis by applying the OPD 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/Long Term Care
Hospital (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 noted in the proposed rule that under
our regular process for the CY 2023 OPPS/ASC final rule, we would 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 different
than the market basket used for the proposed rule, the CY 2023 OPPS/ASC
final rule OPD rate increase factor would reflect that different market
basket estimate.
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 proposed that the MFP adjustment for the CY 2023 OPPS
would be 0.4 percentage point. We also proposed that if more recent
data become subsequently available after the publication of the CY 2023
OPPS/ASC proposed rule (for example, a more 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.
We note that section 1833(t)(3)(F) of the Act provides that
application of this subparagraph may result in the OPD fee schedule
increase factor under section 1833(t)(3)(C)(iv) of the Act being less
than 0.0 percent for a year, and may result in OPPS payment rates being
less than rates for the preceding year. As described in further detail
below, we proposed for CY 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 proposed that hospitals that fail to meet the Hospital OQR
Program reporting requirements would be subject to an additional
reduction of 2.0 percentage points from the OPD fee schedule increase
factor adjustment to the conversion factor that would be used to
calculate the OPPS payment rates for their services, as required by
section 1833(t)(17) of the Act. For further discussion of the Hospital
OQR Program, we refer readers to section XIV of the CY 2023 OPPS/ASC
proposed rule.
To set the OPPS conversion factor for 2023, we proposed 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 proposed 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 proposed 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.
We note that we did not include a budget neutrality factor for the
proposed rule to account for the adjustment for drugs purchased under
the 340B Program because we formally proposed to continue paying such
drugs at ASP minus 22.5 percent, which was the same payment rate as in
CY 2022. Given the timing of the Supreme Court's decision in American
Hospital Association v. Becerra, 142 S. Ct. 1896 (2022), we lacked the
necessary time to fully incorporate the adjustments to our budget
neutrality calculations to account for that decision before issuing the
CY 2023 OPPS/ASC proposed rule. Instead, we included alternative files
with the proposed rule that detailed the impact of removing the 340B
policy for CY 2023. The final budget neutrality factor for the 340B
policy is discussed later in this section and section V.B.6. of this
final rule with comment period.
For the CY 2023 OPPS, we proposed to maintain the current rural
adjustment policy, as discussed in section II.E. of the CY 2023 OPPS/
ASC proposed rule. Therefore, the proposed budget neutrality factor for
the rural adjustment was 1.0000.
We proposed to continue previously established policies for
implementing the cancer hospital payment adjustment described in
section 1833(t)(18) of the Act, as discussed in section II.F of the CY
2023 OPPS/ASC proposed rule. We proposed 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
[[Page 71781]]
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 proposed to apply a budget neutrality adjustment factor
of 1.0000 to the conversion factor for the cancer hospital payment
adjustment. In accordance with section 1833(t)(18)(C) of the Act, as
added by section 16002(b) of the 21st Century Cures Act (Pub. L. 114-
255), we applied a budget neutrality factor calculated as if the
proposed cancer hospital adjustment target payment-to-cost ratio was
0.90, not the 0.89 target payment-to-cost ratio we applied as stated in
section II.F of the CY 2023 OPPS/ASC proposed rule.
We estimated 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 estimated for the CY
2023 OPPS/ASC 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 proposed 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 the CY 2023 OPPS/ASC proposed rule.
For CY 2023, we also proposed that hospitals that fail to meet the
reporting requirements of the Hospital OQR Program would continue to be
subject to a further reduction of 2.0 percentage points to the OPD fee
schedule increase factor. For hospitals that fail to meet the
requirements of the Hospital OQR Program, we proposed to make all other
adjustments discussed above, but use a reduced OPD fee schedule update
factor of 0.7 percent (that is, the proposed OPD fee schedule increase
factor of 2.7 percent further reduced by 2.0 percentage points). This
would result in a proposed reduced conversion factor for CY 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 proposed 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 proposed 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 resulted in
a proposed conversion factor for CY 2023 of $86.785.
Comment: Many commenters believed that the proposed OPD rate
increase of 2.7 percent substantially underestimated the increases in
costs for labor, equipment, and supplies that hospitals are facing.
Commenters also asserted that the adjusted inpatient hospital rate
increase of 3.8 percent that was implemented for the IPPS and
calculated using more current economic data is also inadequate to
address the large cost increases faced by hospitals. Many commenters
raised concerns about sharply rising labor costs, especially the cost
of nursing care. Commenters stated that during the COVID-19 pandemic,
hospitals greatly increased their use of contract nurses whose wages
and support costs were substantially higher than nurses regularly
employed by hospitals. Commenters had serious concerns about whether
the market basket data that measures labor costs were measuring the
increased hospital labor costs. Commenters also were in favor of
eliminating or substantially reducing the productivity adjustment from
the OPD rate update. They believe that disruptions caused by the
pandemic, inflation, and supply-chain issues have inhibited
productivity growth, and that the proposed adjustment overestimates
productivity efficiencies in the hospital sector of the economy.
Commenters had several suggested actions or sources of information
that could be used to measure and compensate for the increased costs
hospitals face. Some commenters suggested using different measures of
changes in costs and of inflation, including Medicare cost reports and
the Consumer Price Index (CPI). Many commenters support a one-time
Medicare payment rate increase in addition to the proposed OPD rate
increase to meet current sharply rising costs and remedy what
commenters said were inadequate increases to OPD rates in prior years.
One commenter contended that we do not have to accept the adjusted
inpatient hospital rate increase for the final OPD rate increase,
pointing out that section 1833(t)(3)(C)(iv) of the Act states that ``.
. . the `OPD fee schedule increase factor' for services furnished in a
year is equal to the market basket percentage increase applicable under
section 1886(b)(3)(B)(iii) . . .'' The commenter explained that section
1886(b)(3)(B)(iii) of the Act defines the IPPS market basket percentage
increase that section 1833(t)(3)(C)(iv) requires to be adopted by the
OPPS. The commenter believes that section 1886(d)(5)(I)(i) of the Act,
which states that ``(t)he Secretary shall provide by regulation for
such other exceptions and adjustments to such payment amounts under
this subsection as the Secretary deems appropriate . . . ,'' gives CMS
flexibility to identify adjustments that could update the IPPS market
basket to better reflect rapidly increasing input costs for hospitals.
Response: Section 1833(t)(3)(C)(iv) of the Act requires that the
OPD fee schedule increase factor equal the IPPS market basket
percentage increase. The IPPS authority in section 1886(d)(5)(I)(i) of
the Act gives the Secretary authority to make exceptions and
adjustments to IPPS payment amounts under subsection (d) of section
1886; it does not give the Secretary authority to adjust OPPS payment
amounts. Section 1833(t)(3)(C)(iv) does give the Secretary discretion
to substitute for the market basket percentage increase an annual
percentage increase that is computed and applied with respect to
covered OPD services furnished in a year in the same manner as the
market basket
[[Page 71782]]
increase is determined and applied to inpatient hospital services for
discharges occurring in a fiscal year, but we did not propose to
substitute a covered OPD services-specific increase for the market
percentage increase factor for CY 2023. Where CMS does not substitute
this alternative, the OPD fee schedule increase factor must equal the
market basket percentage increase. And as we noted in the FY 2023 IPPS/
LTCH PPS final rule, the final IPPS market basket growth rate of 4.1
percent would be the highest market basket update implemented in an
IPPS final rule since FY 1998 (87 FR 49052).
Comment: Several commenters supported our proposed OPD rate
increase of 2.7 percent updated based on more current market basket
information for this final rule. Some of the commenters noted that our
proposed increase was the minimum amount needed to reflect hospitals'
higher costs and they encouraged us to implement an OPD rate increase
larger than the proposed 2.7 percent OPD rate increase.
Response: We appreciate the commenter's support for our proposed
OPD rate increases. After reviewing the public comments that we
received, we are finalizing these proposals with modification.
For CY 2023, we proposed to continue previously established
policies for implementing the cancer hospital payment adjustment
described in section 1833(t)(18) of the Act (discussed in section II.F
of this final rule with comment period). Based on the final rule
updated data used in calculating the cancer hospital payment adjustment
in section II.F. of this final rule with comment period, the target
payment-to-cost ratio for the cancer hospital payment adjustment, which
was 0.90 for CY 2022, is 0.90 for CY 2023. As a result, we are applying
a budget neutrality adjustment factor of 1.0000 to the conversion
factor for the cancer hospital payment adjustment.
For this CY 2023 OPPS/ASC final rule with comment period, based on
more recent data available for the FY 2023 IPPS/LTCH PPS final rule (87
FR 49056) (that is, IHS Global Inc.'s (IGI's) second quarter 2022
forecast of the 2018-based IPPS market basket rate-of-increase with
historical data through the first quarter of 2022), the hospital market
basket update for CY 2023 is 4.1 percent and the productivity
adjustment for FY 2023 is 0.3 percent.
We note that as a result of the modifications in final policy for
the CY 2023 wage index we are also including a change to the wage index
budget neutrality adjustment so that the final overall budget
neutrality factor of 0.9998 would apply for wage index changes. This
adjustment is comprised of a 1.0002 budget neutrality adjustment, using
our standard calculation of comparing proposed total estimated payments
from our simulation model using the final 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 as well as a 0.9996 budget neutrality
adjustment for the final CY 2023 5-percent cap on wage index decreases
(as discussed in section II.C of this final rule with comment period),
requiring application of the 5-percent cap on CY 2022 wage indexes, to
ensure that this wage index is implemented in a budget neutral manner.
As a result of these finalized policies, the OPD fee schedule
increase factor for the CY 2023 OPPS is 3.8 percent (which reflects the
4.1 percent final estimate of the hospital inpatient market basket
percentage increase with a -0.3 percentage point productivity
adjustment). For CY 2023, we are using a conversion factor of $84.177
in the calculation of the national unadjusted payment rates for those
items and services for which payment rates are calculated using
geometric mean costs; that is, the OPD fee schedule increase factor of
3.8 percent for CY 2023, the required wage index budget neutrality
adjustment of 0.9998, the adjustment to account for the change in
policy for drugs purchased under the 340B Program of 0.9691, and the
adjustment of 0.16 percentage point of projected OPPS spending for the
difference in pass-through spending that results in a conversion factor
for CY 2023 of $85.585. This information is listed in Table 4.
[GRAPHIC] [TIFF OMITTED] TR23NO22.009
C. Wage Index Changes
Section 1833(t)(2)(D) of the Act requires the Secretary to
determine a wage adjustment factor to adjust the portion of payment and
coinsurance attributable to labor-related costs for relative
differences in labor and labor-related costs across geographic regions
in a budget neutral manner (codified at 42 CFR 419.43(a)). This portion
of the OPPS payment rate is called the OPPS labor-related share. Budget
neutrality is discussed in section II.B of the CY 2023 OPPS/ASC
proposed rule (87 FR 44528).
The OPPS labor-related share is 60 percent of the national OPPS
payment. This labor-related share is based on a regression analysis
that determined that, for all hospitals, approximately 60 percent of
the costs of services paid under the OPPS were attributable to wage
costs. We confirmed that this labor-related share for outpatient
services is appropriate during our regression analysis for the payment
adjustment for rural hospitals in the CY 2006 OPPS final rule with
comment period (70 FR 68553). In the CY 2023 OPPS/ASC proposed rule, we
proposed to continue this policy for the CY 2023 OPPS. We referred
readers to section II.H of the CY 2023 OPPS/ASC proposed rule (87 FR
44535 through 44536) for a description and an example of how the wage
index for a particular hospital is used to determine payment for the
hospital.
We did not receive any public comments on our proposal, and we are
finalizing our proposal without modification.
[[Page 71783]]
As discussed in the claims accounting narrative included with the
supporting documentation for this final rule (which is available via
the internet on the CMS website (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices)), for estimating APC costs, we 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. In the
CY 2023 OPPS/ASC proposed rule, we proposed to implement this provision
in the same manner as we have since CY 2011. Under this policy, the
frontier State hospitals would receive a wage index of 1.00 if the
otherwise applicable wage index (including reclassification, the rural
floor, and rural floor budget neutrality) is less than 1.00. Because
the HOPD receives a wage index based on the geographic location of the
specific inpatient hospital with which it is associated, the frontier
State wage index adjustment applicable for the inpatient hospital also
would apply for any associated HOPD. We referred readers to the FY 2011
through FY 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.
We did not receive any public comments on our proposal, and we are
finalizing our proposal without modification.
In addition to the changes required by the Affordable Care Act, we
noted in the CY 2023 OPPS/ASC proposed rule (87 FR 44529) 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 referred 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 noted 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.
Core Based Statistical Areas (CBSAs) are made up of one or more
constituent counties. Each CBSA and constituent county has its own
unique identifying codes. The FY 2018 IPPS/LTCH PPS final rule (82 FR
38130) discussed the two different lists of codes to identify counties:
Social Security Administration (SSA) codes and Federal Information
Processing Standard (FIPS) codes. Historically, CMS listed and used SSA
and FIPS county codes to identify and crosswalk counties to CBSA codes
for purposes of the IPPS and OPPS wage indexes. However, the SSA county
codes are no longer being maintained and updated, although the FIPS
codes continue to be maintained by the U.S. Census Bureau. The Census
Bureau's most current statistical area information is derived from
ongoing census data received since 2010; the most recent data are from
2015. The Census Bureau maintains a complete list of changes to
counties or county equivalent entities on the website at: https://www.census.gov/geo/reference/county-changes.html (which, as of May 6,
2019, migrated to: https://www.census.gov/programs-surveys/geography.html). In the FY 2018 IPPS/LTCH PPS final rule (82 FR 38130),
for purposes of crosswalking counties to CBSAs for the IPPS wage index,
we finalized our proposal to discontinue the use of the SSA county
codes and begin using only the FIPS county codes. Similarly, for the
purposes of crosswalking counties to CBSAs for the OPPS wage index, in
the CY 2018 OPPS/ASC final rule with comment period (82 FR 59260), we
finalized our proposal to discontinue the use of SSA county codes and
begin using only the FIPS county codes. For CY 2023, under the OPPS, we
are continuing to use only the FIPS county codes for purposes of
crosswalking counties to CBSAs.
In the CY 2023 OPPS/ASC proposed rule, we proposed 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. We stated that,
therefore, any policies and adjustments for the FY 2023 IPPS post-
reclassified wage index,
[[Page 71784]]
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 referred 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 referred readers to section II.B of the CY 2023 OPPS/ASC
proposed rule (78 FR 44528). We stated that we continue to believe that
using the IPPS post-reclassified wage index as the source of an
adjustment factor for the OPPS is reasonable and logical, given the
inseparable, subordinate status of the HOPD within the hospital
overall.
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. In the CY 2023 OPPS/ASC
proposed rule, we proposed to continue this policy for CY 2023 and
included 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 referred 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
noted 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 proposed to continue our policy of
allowing non-IPPS hospitals paid under the OPPS to qualify for the
outmigration adjustment if they are located in a section 505 out-
migration county (section 505 of the MMA). Furthermore, we proposed
that the wage index that would apply for CY 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. We stated that 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.
Comment: Multiple commenters supported our proposal for FY 2023 and
subsequent years 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. Commenters stated that the
proposal would provide payment stability for hospitals. Commenters also
requested that the proposed 5-percent cap policy be excluded from
budget neutrality, which would allow the cap to be applied while
avoiding decreases to the wage index in areas with high wage indexes.
Response: We appreciate the commenters' support of our proposal in
the FY 2023 IPPS/LTCH PPS proposed rule to apply a 5-percent cap on any
decrease to a hospital's wage index from its wage index in the prior
FY. We finalized this proposal and the associated proposed budget
neutrality adjustment in the FY 2023 IPPS/LTCH PPS final rule (87 FR
49018 through 49021) and agree that the policy will promote payment
stability for hospitals.
We refer readers to the FY 2023 IPPS/LTCH PPS final rule (87 FR
49018 through 49021) for a detailed discussion of the wage index cap
policy finalized for the FY 2023 IPPS wage index and for responses to
these and other comments relating to the wage index cap policy.
As we noted, in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49018
through 49021), for FY 2023 and subsequent years, we finalized an IPPS
wage index policy to apply a 5-percent cap on any decrease to a
hospital's wage index from its wage index in the prior fiscal year,
regardless of the circumstances causing the decline. A hospital's wage
index for FY 2023 will not be less than 95 percent of its final wage
index for FY 2022, and for subsequent years, a hospital's wage index
will not be less than 95 percent of its final wage index for the prior
fiscal year. Except for newly opened hospitals, we will apply the cap
for a fiscal year using the final wage index applicable to the hospital
on the last day of the prior fiscal year. A newly opened hospital would
be paid the wage index for the area in which it is geographically
located for its first full or partial fiscal year, and it would not
receive a cap for that first year because it would not have been
assigned a wage index in the prior year. We stated in the FY 2023 IPPS/
LTCH PPS final rule (87 FR 49021) that we will apply the cap in a
budget neutral manner through a national adjustment to the standardized
amount each fiscal year. Specifically, we will apply a budget
neutrality adjustment to ensure that estimated aggregate payments under
our wage index cap policy for hospitals that would have a decrease in
their wage indexes for the upcoming fiscal year of more than 5 percent
would equal what estimated aggregate payments would have been without
the wage index cap policy. We will apply a similar budget neutrality
adjustment in the OPPS for each calendar year. For the OPPS, section
1833(t)(2)(D) of the Act requires the Secretary to determine a wage
adjustment factor to adjust the portion of payment and coinsurance
attributable to labor related costs for relative differences in labor
and labor-related costs across geographic regions in a budget neutral
manner.
Comment: One commenter was opposed to our proposal to apply a 5-
percent cap on any decrease to a hospital's wage index from its wage
index in the prior FY. The commenter stated that our proposal goes
against the purpose of having a wage index, which the commenter
believes is to adjust payment rates to reflect the substantial
geographic differences in hospital labor costs.
Response: We appreciate the commenter's concerns. However, we
believe applying a 5-percent cap on all wage index decreases supports
increased predictability about OPPS payments for hospitals in the
upcoming calendar year, enabling them to more effectively budget and
plan their operations. That is, we proposed to cap decreases because we
believe that a hospital would be able to more effectively budget and
plan when there is predictability about its expected minimum level of
OPPS payments in the upcoming calendar year. We believe that any
potential difference in the wage index value hospitals in the same
labor market area receive would likely be minimal and temporary.
Comment: One commenter supported the application of the imputed
floor wage index policy, including the policy's definition of all-urban
states as well as its non-budget neutral application as required by
section 9831
[[Page 71785]]
of the American Rescue Plan Act of 2021. Another commenter opposed the
imputed floor policy, stating that it unfairly manipulates the wage
index to benefit a handful of only-urban states and territories.
Response: We appreciate the commenter's support of our application
of the imputed floor wage index policy. In response to the commenter
that opposed this policy, we underscore that the imputed floor was
established for the IPPS wage index by section 9831 of the American
Rescue Plan Act of 2021. As we stated in the CY 2022 OPPS/ASC final
rule (86 FR 63502), we continue to believe that it is appropriate to
apply the imputed floor policy in the OPPS in the same manner as under
the IPPS, given the inseparable, subordinate status of the HOPD within
the hospital overall.
Comment: Multiple commenters requested that rural emergency
hospitals (REHs) be eligible to be reclassified under Medicare
Geographic Classification Review Board (MGCRB) reclassification
process.
Response: Pursuant to section 1861(kkk)(2)(B) of the Act, REHs may
not provide acute care inpatient hospital services other than post-
hospital extended care services furnished by a distinct part unit
licensed as a skilled nursing facility. Therefore, REHs are considered
to be non-IPPS hospitals. Non-IPPS hospitals are not eligible for
Medicare Geographic Classification Review Board (MGCRB)
reclassification.
After consideration of the public comments we received, we are
finalizing our proposal without modification 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. Any policies and
adjustments for the FY 2023 IPPS post-reclassified wage index will be
reflected in the final CY 2023 OPPS wage index beginning on January 1,
2023, 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), 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, and a
5-percent cap on any decrease to a hospital's wage index from its wage
index in the prior FY. We refer readers to the FY 2023 IPPS/LTCH PPS
final rule (87 FR 48990 through 49021) and the FY 2023 hospital wage
index files posted on the CMS website at https://www.cms.gov/medicare/acute-inpatient-pps/fy-2023-ipps-final-rule-home-page. With regard to
budget neutrality for the CY 2023 OPPS wage index, we refer readers to
section II.B. of this CY 2023 OPPS/ASC final rule.
We also are finalizing our proposal without modification 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 also are finalizing our proposal without modification 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.
For CMHCs, for CY 2023, we proposed to continue to calculate the
wage index by using the post-reclassification IPPS wage index based on
the CBSA where the CMHC is located. Furthermore, we proposed that the
wage index that would apply to 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, we stated that 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 proposed
that the wage index that would apply to CMHCs would not include the
outmigration adjustment because that adjustment only applies to
hospitals.
We did not receive any public comments on these proposals, and we
are finalizing these proposals without modification.
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 final rule as Addendum L to this final rule, with
the addition of non-IPPS hospitals that would receive the section 505
outmigration adjustment under this final rule. Addendum L is available
via the internet on the CMS website. We refer readers to the CMS
website for the OPPS at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index. At this link, readers will
find a link to the final FY 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 (OMB NO: 0938-0050 for Form CMS-
2552-10) to determine outlier payments, payments for pass-through
devices, and monthly interim transitional corridor payments under the
OPPS during the PPS year. For certain hospitals, under the regulations
at 42 CFR 419.43(d)(5)(iii), we use the statewide average default CCRs
to determine the payments mentioned earlier if it is not possible to
determine an accurate CCR for a hospital in certain circumstances. This
includes hospitals that are new, hospitals that have not accepted
assignment of an existing hospital's provider agreement, and hospitals
that have not yet submitted a cost report. We also use the statewide
average default CCRs to determine payments for hospitals whose CCR
falls outside the predetermined ceiling threshold for a valid CCR or
for hospitals in which the most recent cost report reflects an all-
inclusive rate status (Medicare Claims Processing Manual (Pub. 100-04),
Chapter 4, Section 10.11).
We discussed our policy for using default CCRs, including setting
the ceiling threshold for a valid CCR, in the CY 2009 OPPS/ASC final
rule with comment period (73 FR 68594 through 68599) in the context of
our adoption of an outlier reconciliation policy for cost reports
beginning on or after January 1, 2009. For details on our process for
calculating the statewide average CCRs, we refer readers to the CY 2022
OPPS final rule Claims Accounting Narrative that is posted on our
website. Due to concerns with cost report data as a result of the
COVID-19 PHE, we proposed 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.D of
the CY 2023 OPPS/ASC proposed rule (87 FR 44680 through 44682).
We did not receive any public comments on our proposal and are
[[Page 71786]]
finalizing our proposal, without modification, 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.
We no longer publish a table in the Federal Register containing the
statewide average CCRs in the annual OPPS proposed rule and final rule
with comment period. These CCRs with the upper limit will be available
for download with each OPPS CY proposed rule and final rule on the CMS
website. We refer readers to our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html; click on the link on
the left of the page titled ``Hospital Outpatient Regulations and
Notices'' and then select the relevant regulation to download the
statewide CCRs and upper limit in the downloads section of the web
page.
E. Adjustment for Rural Sole Community Hospitals (SCHs) and Essential
Access Community Hospitals (EACHs) Under Section 1833(t)(13)(B) of the
Act for CY 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 proposed 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.
Comment: Two commenters requested that the 7.1 percent payment
adjustment be allowed for providers other than rural SCHs and EACHs.
The commenters suggested the following providers should receive the
adjustment: Medicare dependent hospitals, rural referral centers, urban
sole community hospitals, and rural hospitals with fewer than 100 beds
that cannot be classified as SCHs or CAHs because they do not meet the
mileage requirements for SCHs and CAHs.
Response: Our study of the difference in costs by APC between
hospitals in rural areas and hospitals in urban areas only showed a
significant difference in costs for rural SCHs. We did not identify
significant cost differences between hospitals in urban areas and
hospitals in rural areas for the types of hospitals described by the
commenters. Therefore, we are not expanding the types of hospitals
eligible for the 7.1 percent payment adjustment.
Comment: Multiple commenters are in favor of our policy to apply a
7.1 percent payment adjustment for rural SCHs, including EACHs.
Response: We appreciate the commenters' support of our policy.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to continue our current
policy of utilizing a budget neutral 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, devices
paid under the passthrough payment policy, and items paid at charges
reduced to costs.
F. 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 (OMB NO: 0938-0050), respectively), as applicable each year.
[[Page 71787]]
Section 1833(t)(7)(I) of the Act exempts TOPs from budget neutrality
calculations.
Section 3138 of the Affordable Care Act amended section 1833(t) of
the Act by adding a new paragraph (18), which instructs the Secretary
to conduct a study to determine if, under the OPPS, outpatient costs
incurred by cancer hospitals described in section 1886(d)(1)(B)(v) of
the Act with respect to APC groups exceed outpatient costs incurred by
other hospitals furnishing services under section 1833(t) of the Act,
as determined appropriate by the Secretary. Section 1833(t)(18)(A) of
the Act requires the Secretary to take into consideration the cost of
drugs and biologicals incurred by cancer hospitals and other hospitals.
Section 1833(t)(18)(B) of the Act provides that, if the Secretary
determines that cancer hospitals' costs are higher than those of other
hospitals, the Secretary shall provide an appropriate adjustment under
section 1833(t)(2)(E) of the Act to reflect these higher costs. In
2011, after conducting the study required by section 1833(t)(18)(A) of
the Act, we determined that outpatient costs incurred by the 11
specified cancer hospitals were greater than the costs incurred by
other OPPS hospitals. For a complete discussion regarding the cancer
hospital cost study, we refer readers to the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74200 through 74201).
Based on these findings, we finalized a policy to provide a payment
adjustment to the 11 specified cancer hospitals that reflects their
higher outpatient costs, as discussed in the CY 2012 OPPS/ASC final
rule with comment period (76 FR 74202 through 74206). Specifically, we
adopted a policy to provide additional payments to the cancer hospitals
so that each cancer hospital's final PCR for services provided in a
given calendar year is equal to the weighted average PCR (which we
refer to as the ``target PCR'') for other hospitals paid under the
OPPS. The target PCR is set in advance of the calendar year and is
calculated using the most recently submitted or settled cost report
data that are available at the time of final rulemaking for the
calendar year. The amount of the payment adjustment is made on an
aggregate basis at cost report settlement. We note that the changes
made by section 1833(t)(18) of the Act do not affect the existing
statutory provisions that provide for TOPs for cancer hospitals. The
TOPs are assessed, as usual, after all payments, including the cancer
hospital payment adjustment, have been made for a cost reporting
period. Table 5 displays the target PCR for purposes of the cancer
hospital adjustment for CY 2012 through CY 2022.
[GRAPHIC] [TIFF OMITTED] TR23NO22.010
2. 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 proposed 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 did not
propose an additional reduction beyond the 1.0 percentage point
reduction required by section 16002(b) of the 21st Century Cures Act
for CY 2023.
Under our established policy, to calculate the proposed CY 2023
target PCR, we used 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.D of the CY 2023 OPPS/ASC proposed
rule (87 FR 44510 through 44511 and 87 FR 44680 through 44682), we
proposed to use cost report data from the June 2020 HCRIS data set,
which does not
[[Page 71788]]
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 proposed 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).
Comment: One commenter supported our proposed target PCR of 0.89.
Response: We thank the commenter for their support.
After consideration of the public comment we received, we are
finalizing our proposal to continue to use the CY 2021 and CY 2022
target PCR of 0.89 for the 11 specified cancer hospitals for CY 2023
without modification.
Table 6 shows the 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 6 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 6 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.
[GRAPHIC] [TIFF OMITTED] TR23NO22.011
G. Hospital Outpatient Outlier Payments
1. Background
The OPPS provides outlier payments to hospitals to help mitigate
the financial risk associated with high-cost and complex procedures,
where a very costly service could present a hospital with significant
financial loss. As explained in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66832 through 66834), we set our projected target
for aggregate outlier payments at 1.0 percent of the estimated
aggregate total payments under the OPPS for the prospective year.
Outlier payments are provided on a service-by-service basis when the
cost of a service exceeds the APC payment amount multiplier threshold
(the APC payment amount multiplied by a certain amount) as well as the
APC payment amount plus a fixed-dollar amount threshold (the APC
payment plus a certain 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
[[Page 71789]]
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
final rule with comment period, is approximately 1.16 percent.
Therefore, for CY 2021, we estimate that we exceeded the outlier target
by 0.16 percent of total aggregated OPPS payments.
For this final rule with comment period, using CY 2021 claims data
and CY 2022 payment rates, we estimate that the aggregate outlier
payments for CY 2022 would be approximately 1.26 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 proposed to continue our policy of estimating
outlier payments to be 1.0 percent of the estimated aggregate total
payments under the OPPS. We proposed that a portion of that 1.0
percent, an amount equal to less than 0.01 percent of outlier payments
(or 0.0001 percent of total OPPS payments), would be allocated to CMHCs
for PHP outlier payments. This is the amount of estimated outlier
payments that would result from the proposed CMHC outlier threshold as
a proportion of total estimated OPPS outlier payments. We proposed to
continue our longstanding policy that if a CMHC's cost for partial
hospitalization services, paid under APC 5853 (Partial Hospitalization
for CMHCs), exceeds 3.40 times the payment rate for 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 final rule with comment period.
To ensure that the estimated CY 2023 aggregate outlier payments
would equal 1.0 percent of estimated aggregate total payments under the
OPPS, we proposed that the hospital outlier threshold be set so that
outlier payments would be triggered when a hospital's cost of
furnishing a service exceeds 1.75 times the APC payment amount and
exceeds the APC payment amount plus $8,350.
We calculated 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 proposed 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 proposed 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 proposed to use the April
2022 OPSF for purposes of estimating costs for the OPPS outlier
threshold calculation whereas in Section X.D. of the CY 2023 OPPS/ASC
proposed rule (87 FR 44680 through 44682) 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 stated that 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 explained that 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 the CY 2023 proposed rule,
we applied 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
[[Page 71790]]
multiplier threshold of 1.75 times the APC payment rate, would allocate
1.0 percent of aggregated total OPPS payments to outlier payments. For
CMHCs, we proposed that, if a CMHC's cost for partial hospitalization
services, paid under APC 5853, exceeds 3.40 times the payment rate for
APC 5853, the outlier payment would be calculated as 50 percent of the
amount by which the cost exceeds 3.40 times the APC 5853 payment rate.
Section 1833(t)(17)(A) of the Act, which applies to hospitals, as
defined under section 1886(d)(1)(B) of the Act, requires that hospitals
that fail to report data required for the quality measures selected by
the Secretary, in the form and manner required by the Secretary under
section 1833(t)(17)(B) of the Act, incur a 2.0 percentage point
reduction to their OPD fee schedule increase factor; that is, the
annual payment update factor. The application of a reduced OPD fee
schedule increase factor results in reduced national unadjusted payment
rates that 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 Outpatient Quality Reporting
(OQR) Program requirements. For hospitals that fail to meet the
Hospital OQR Program requirements, we proposed to continue the policy
that we implemented in CY 2010 that the hospitals' costs 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 the CY 2023 OPPS/ASC
proposed rule (87 FR 44726 through 44740).
Comment: Many commenters expressed concern about the proposed CY
2023 fixed-dollar threshold of $8,350 and its large increase from the
final CY 2022 fixed-dollar threshold of $6,175. Many commenters were
concerned that fewer cases would qualify for OPPS outlier payments,
potentially underfunding hospitals, and missing our 1.0 percent target.
Commenters also noted that, in the FY 2023 Inpatient Prospective
Payment System (IPPS)/Long Term Care Hospital (LTCH) Prospective
Payment System final rule, in response to stakeholder comments, we
finalized a lower fixed loss amount for IPPS outliers after blending
fixed loss amounts that were modeled with COVID inpatient admissions
and without COVID inpatient admissions. Commenters recommended that we
revisit our methodology for determining the CY 2023 OPPS fixed-dollar
threshold to be sure that we meet our 1.0 percent target.
Response: We appreciate the commenters' concerns regarding the
large increase in CY 2023 OPPS fixed-dollar threshold from CY 2022. We
have reviewed and analyzed our methodology as well as the most up to
date CCRs available in the July 2022 OPSF for determining estimated
outlier payments. We estimate that the increase in the fixed-dollar
threshold from CY 2022 to CY 2023 is largely attributable to an
increase in reported charges on hospital outpatient claims. Holding
CCRs constant, an increase in reported charges otherwise increases the
charges reduced to cost on hospital outpatient claims. An additional
contributing factor is an increase in hospital CCRs in the July 2022
OPSF when compared to the July 2021 OPSF. The increase in hospital CCRs
further increases the charges reduced to cost on hospital outpatient
claims. We believe the combination of these two factors has increased
hospital outpatient costs, thereby allowing more cases to qualify for
OPPS outlier payments. To counterbalance these increases, as described
in our final calculation below, our modeling estimates a large increase
in the OPPS fixed-dollar threshold is required to maintain a 1.0
percent OPPS outlier spending target. As discussed further in section
X.D of this final rule with comment period, we believe it is reasonable
to assume that there would 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 did not exclude such COVID-
19 cases for determining the CY 2023 fixed-dollar threshold.
As described in our final calculation below, we do not believe
modification to the underlying methodology is warranted at this time.
Therefore, we are finalizing our proposal to determine a fixed-dollar
threshold, combined with the proposed multiplier threshold of 1.75
times the APC payment rate, that would allocate 1.0 percent of
aggregated total OPPS payments to outlier payments.
3. Final Outlier Calculation
Historically, we have used updated data for the outlier fixed-
dollar threshold calculation for the final rule. However, as discussed
in the CY 2022 OPPS/ASC final rule with comment period (86 FR 63510),
we finalized our proposal to not use the most recent CCRs in the OPSF
as they may be significantly impacted by the PHE. As we discussed in
the CY 2023 OPPS/ASC proposed rule (87 FR 44533 through 44534), we
believe the updated OPSF data for modeling the outlier fixed dollar
threshold in the CY 2023 OPPS/ASC proposed rule provides a more
accurate data source for estimating CY 2023 aggregate outlier payments.
Similarly, we believe using updated OPSF data for this final rule with
comment period provides the best source of CCRs for OPPS outlier
calculations. For CY 2023, we are applying the overall ancillary CCRs
from the July 2022 OPSF file after adjustment (using the CCR inflation
adjustment factor 0.974495 to approximate CY 2023 CCRs) to charges on
CY 2021 claims that were adjusted using a charge inflation factor of
1.13218 to approximate CY 2023 charges. These are the same CCR
adjustment and charge inflation factors that were used to model IPPS
outlier payments and to determine the final IPPS fixed-loss threshold
for the FY 2023 IPPS/LTCH PPS final rule (87 FR 49427). We simulated
aggregated CY 2023 hospital outlier payments using these costs for
several different fixed-dollar thresholds, holding the 1.75 multiple-
threshold constant and assuming that outlier payments will continue to
be made at 50 percent of the amount by which the cost of furnishing the
service would exceed 1.75 times the APC payment amount, until the total
outlier payment equaled 1.0 percent of aggregated estimated total CY
2023 OPPS payments. We estimated that a fixed-dollar threshold of
$8,625 combined with the multiple-threshold of 1.75 times the APC
payment rate, will allocate 1.0 percent of aggregated total OPPS
payments to outlier payments. For example, in CY 2023, if 1.75 times
the APC amount is $5,000 and the applicable costs on the claim totaled
$10,000 (which also exceeds our CY 2023 fixed-dollar threshold of
$8,625), the hospital would receive an outlier payment of $2,500
(($10,000-$5,000) * 0.50). However, if the applicable cost on the claim
totaled $8,000, which does not exceed our CY 2023 fixed-dollar
threshold, no outlier payment would be made.
For CMHCs, if a CMHC's cost for partial hospitalization services,
paid under APC 5853, exceeds 3.40 times the payment rate, the outlier
payment will be calculated as 50 percent of the amount by which the
cost exceeds 3.40 times APC 5853.
H. Calculation of an Adjusted Medicare Payment From the National
Unadjusted Medicare Payment
The national unadjusted payment rate is the is payment rate for
most APC's before accounting for the wage index
[[Page 71791]]
adjustment or any applicable adjustments. 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 OPPS/ASC final rule with comment period, the
payment rate for most services and procedures for which payment is made
under the OPPS is the product of the conversion factor calculated in
accordance with section II.B of this final rule with comment period and
the relative payment weight described in section II.A of this final
rule with comment period. The national unadjusted payment rate for most
APCs contained in Addendum A to this final rule with comment period
(which is available via the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Addendum-A-and-Addendum-B-Updates) and for most HCPCS codes to which
separate payment under the OPPS has been assigned in Addendum B to this
final rule with comment period (which is available on the CMS website
link above) is calculated by multiplying the final 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 final rule with comment period.
We demonstrated the steps used to determine the APC payments that
will be made in a CY under the OPPS to a hospital that fulfills the
Hospital OQR Program requirements and to a hospital that fails to meet
the Hospital OQR Program requirements for a service that has any of the
following status indicator assignments: ``J1'', ``J2'', ``P'', ``Q1'',
``Q2'', ``Q3'', ``Q4'', ``R'', ``S'', ``T'', ``U'', or ``V'' (as
defined in Addendum D1 to this final rule with comment period, 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 final
rule with comment period (which are available via the internet on the
CMS website) should follow the formulas presented in the following
steps. For purposes of the payment calculations below, we refer to the
national unadjusted payment rate for hospitals that meet the
requirements of the Hospital OQR Program as the ``full'' national
unadjusted payment rate. We refer to the national unadjusted payment
rate for hospitals that fail to meet the requirements of the Hospital
OQR Program as the ``reduced'' national unadjusted payment rate. The
reduced national unadjusted payment rate is calculated by multiplying
the reporting ratio of 0.9807 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 are continuing 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 final rule
with comment period.
Step 3. Adjust the wage index of hospitals located in certain
qualifying counties that have a relatively high percentage of hospital
employees who reside in the county, but who work in a different county
with a higher wage index, in accordance with section 505 of Public Law
108-173. Addendum L to this final rule with comment period (which is
available via the internet on the CMS website) contains the qualifying
counties and the associated wage index increase developed for the final
FY 2023 IPPS wage index, which are listed in Table 3 associated with
the FY 2023 IPPS final rule and available via the internet on the CMS
website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html. (Click on the link on the left
side of the screen titled ``FY 2023 IPPS Final Rule Home Page'' and
select ``FY 2023 Final Rule Tables.'') This step is to be followed only
if the hospital is not reclassified or redesignated under section
1886(d)(8) or section 1886(d)(10) of the Act.
Step 4. Multiply the applicable wage index determined under Steps 2
and 3 by the amount determined under Step 1 that represents the labor-
related portion of the national unadjusted payment rate.
The formula below is a mathematical representation of Step 4 and
adjusts the
[[Page 71792]]
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 = labor-portion of the 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).
Step 6. If a provider is an SCH, as set forth in the regulations at
Sec. 412.92, or an EACH, which is considered to be an SCH under
section 1886(d)(5)(D)(iii)(III) of the Act, and located in a rural
area, as defined in Sec. 412.64(b), or is treated as being located in
a rural area under Sec. 412.103, multiply the wage index adjusted
payment rate by 1.071 to calculate the total payment.
The formula below is a mathematical representation of Step 6 and
applies the rural adjustment for rural SCHs.
Adjusted Medicare Payment (SCH or EACH) = Adjusted Medicare Payment *
1.071.
Step 7. The adjusted payment rate is the sum the wage adjusted
labor-related portion of the national unadjusted payment rate and the
nonlabor-related portion of the national unadjusted payment rate.
Xa is the labor-related portion of the national unadjusted payment rate
(wage adjusted).
Y is the nonlabor-related portion of the national unadjusted payment
rate.
Adjusted Medicare Payment = Xa + Y
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 $648.97. The reduced
national adjusted payment rate for APC 5071 for a hospital that fails
to meet the Hospital OQR Program requirements is $636.44. This reduced
rate is calculated by multiplying the reporting ratio of 0.9807 by the
full unadjusted payment rate for APC 5071.
Step 1. The labor-related portion of the full national unadjusted
payment is approximately $389.38 (.60 * $648.97). The labor-related
portion of the reduced national adjusted payment is approximately
$381.86 (.60 * $636.44).
Step 2 & 3. The FY 2023 wage index for a provider located in CBSA
35614 in New York, which includes the adoption of IPPS 2023 wage index
policies, is 1.3329.
Step 4. The wage adjusted labor-related portion of the full
national unadjusted payment is approximately $519.00 ($389.38 *
1.3329). The wage adjusted labor-related portion of the reduced
national adjusted payment is approximately $508.98 ($381.86 * 1.3329).
Step 5. The nonlabor-related portion of the full national
unadjusted payment is approximately $259.59 (.40 * $648.97). The
nonlabor-related portion of the reduced national adjusted payment is
approximately $254.58 (.40 * $636.44).
Step 6. For this example of a provider located in Brooklyn, New
York, the rural adjustment for rural SCHs does not apply.
Step 7. The sum of the labor-related and nonlabor-related portions
of the full national unadjusted payment is approximately $778.59
($519.00 + $259.59). The sum of the portions of the reduced national
adjusted payment is approximately $763.56 ($508.98 + $254.58).
[GRAPHIC] [TIFF OMITTED] TR23NO22.012
We did not receive any public comments on our proposal and
therefore, we are finalizing it as proposed.
I. Beneficiary Copayments
1. Background
Section 1833(t)(3)(B) of the Act requires the Secretary to set
rules for determining the unadjusted copayment amounts to be paid by
beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of
the Act specifies that the Secretary must reduce the national
unadjusted copayment amount for a covered OPD service (or group of such
services) furnished in a year in a manner so that the effective
copayment rate (determined on a national unadjusted basis) for that
service in the year does not exceed a specified percentage. As
specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective
copayment rate for a covered OPD service paid under the OPPS in CY
2006, and in CYs thereafter, shall not exceed 40 percent of the APC
payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered
OPD service (or group of such services) furnished in a year, the
national unadjusted copayment amount cannot be less than 20 percent of
the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the
Act limits the amount of beneficiary copayment that may be collected
for a procedure (including items such as drugs and biologicals)
performed in a year to the amount of the inpatient hospital deductible
for that year.
Section 4104 of the Affordable Care Act eliminated the Medicare
Part B coinsurance for preventive services furnished on and after
January 1, 2011, that meet certain requirements, including flexible
sigmoidoscopies and screening colonoscopies, and waived the Part B
deductible for screening colonoscopies that become diagnostic during
the procedure. For a discussion of the changes made by the Affordable
Care Act with regard to copayments for preventive services furnished on
and after January 1, 2011, we refer readers to section XII.B of the CY
2011 OPPS/ASC final rule with comment period (75 FR 72013).
[[Page 71793]]
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).
On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) (Pub.
L. 117-169) was signed into law. Section 11101 of the Inflation
Reduction Act requires a Part B inflation rebate for a Part B rebatable
drug if the ASP of the drug rises at a rate that is faster than the
rate of inflation. Section 11101(b) of the IRA amended sections 1833(i)
and 1833(t)(8) by adding a new paragraph (9) and subparagraph (F),
respectively, that specifies coinsurance under the ASC and OPPS payment
systems. Section 1833(i)(9) requires that under the ASC payment system
that beneficiary coinsurance for a Part B rebatable drug that is not
packaged to be calculated using the inflation-adjusted amount when that
amount is less than the otherwise applicable payment amount for the
drug furnished on or after April 1, 2023. Section 1833(t)(8)(F)
requires that under the OPPS payment system that beneficiary copayment
for a Part B rebatable drug (except for a drug that has no copayment
applied under subparagraph (E) of such section or packaged into the
payment for a procedure) is to be calculated using the inflation-
adjusted amount when that amount is less than ASP plus 6 percent
beginning April 1, 2023. Sections 1833(i)(9) and 1833(t)(8)(F)
reference sections 1847A(i)(5) for the computation of the beneficiary
coinsurance and 1833(a)(1)(EE) for the computation of the payment to
the ASC or provider and state that the computations would be done in
the same manner as described in such provisions. The computation of the
coinsurance is described in section 1847A(i), specifically, in
computing the amount of any coinsurance applicable under Part B to an
individual to whom such Part B rebatable drug is furnished, the
computation of such coinsurance shall be equal to 20 percent of the
inflation-adjusted payment amount determined under section
1847A(i)(3)(C) for such part B rebatable drug. The calculation of the
payment to the provider or ASC is described in section 1833(a)(1)(EE),
and the provider or ASC would be paid the difference between the
beneficiary coinsurance or copayment of the inflation-adjusted amount
and ASP plus 6 percent. We wish to make readers aware of this statutory
change that begins April 1, 2023. We wish to make readers of this OPPS/
ASC final rule aware of this statutory change. There are no regulatory
changes reflecting this provision of the Act in this final rule.
Additionally, we refer readers to the full text of the IRA.\5\
Additional details on the implementation of section 11101 of the IRA
are forthcoming and will be communicated through a vehicle other than
the OPPS/ASC regulation.
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\5\ H.R. 5376 available online at: https://www.congress.gov/bill/117th-congress/house-bill/5376/text.
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2. OPPS Copayment Policy
For CY 2023, we proposed to determine copayment amounts for new and
revised APCs using the same methodology that we implemented beginning
in CY 2004. (We refer readers to the November 7, 2003 OPPS final rule
with comment period (68 FR 63458).) In addition, we proposed to use the
same standard rounding principles that we have historically used in
instances where the application of our standard copayment methodology
would result in a copayment amount that is less than 20 percent and
cannot be rounded, under standard rounding principles, to 20 percent.
(We refer readers to the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66687) in which we discuss our rationale for applying
these rounding principles.) The final 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 the CY 2023 OPPS/ASC
final rule (which are available via the internet on the CMS website).
As discussed in section XIV.E of the CY 2023 proposed rule (87 FR
44536) and this final rule with comment period, 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 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
[[Page 71794]]
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).
We did not receive any public comments on our proposal and
therefore, we are finalizing our proposal to determine copayment
amounts for new and revised APCs using the same methodology that we
implemented beginning in CY 2004. In addition, we are finalizing the
use of 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 finalized 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 the CY
2023 OPPS/ASC final rule (which are available via the internet on the
CMS website).
3. Calculation of an Adjusted Copayment Amount for an APC Group
Individuals interested in calculating the national copayment
liability for a Medicare beneficiary for a given service provided by a
hospital that met or failed to meet its Hospital OQR Program
requirements should follow the formulas presented in the following
steps.
Step 1. Calculate the beneficiary payment percentage for the APC by
dividing the APC's national unadjusted copayment by its payment rate.
For example, using APC 5071, $129.79 is approximately 20 percent of the
full national unadjusted payment rate of $648.97. For APCs with only a
minimum unadjusted copayment in Addenda A and B to this final rule with
comment period (which are available via the internet on the CMS
website), the beneficiary payment percentage is 20 percent.
The formula below is a mathematical representation of Step 1 and
calculates the national copayment as a percentage of national payment
for a given service.
B is the beneficiary payment percentage.
B = National unadjusted copayment for APC/national unadjusted payment
rate for APC.
Step 2. Calculate the appropriate wage-adjusted payment rate for
the APC for the provider in question, as indicated in Steps 2 through 4
under section II.H of this final rule with comment period. Calculate
the rural adjustment for eligible providers, as indicated in Step 6
under section II.H of this final rule with comment period.
Step 3. Multiply the percentage calculated in Step 1 by the payment
rate calculated in Step 2. The result is the wage-adjusted copayment
amount for the APC.
The formula below is a mathematical representation of Step 3 and
applies the beneficiary payment percentage to the adjusted payment rate
for a service calculated under section II.H of this final rule with
comment period, with and without the rural adjustment, to calculate the
adjusted beneficiary copayment for a given service.
Wage-adjusted copayment amount for the APC = Adjusted Medicare Payment
* B.
Wage-adjusted copayment amount for the APC (SCH or EACH) = (Adjusted
Medicare Payment * 1.071) * B.
Step 4. For a hospital that failed to meet its Hospital OQR Program
requirements, multiply the copayment calculated in Step 3 by the
reporting ratio of 0.9807.
The unadjusted copayments for services payable under the OPPS that
will be effective January 1, 2023 are shown in Addenda A and B to this
final rule with comment period (which are available via the CMS
website). We note that the national unadjusted payment rates and
copayment rates shown in Addenda A and B to this final rule with
comment period reflect the CY 2023 OPD increase factor discussed in
section II.B of this final rule with comment period.
In addition, as noted earlier, section 1833(t)(8)(C)(i) of the Act
limits the amount of beneficiary copayment that may be collected for a
procedure performed in a year to the amount of the inpatient hospital
deductible for that year.
III. OPPS Ambulatory Payment Classification (APC) Group Policies
A. OPPS Treatment of New and Revised HCPCS Codes
Payments for OPPS procedures, services, and items are generally
based on medical billing codes, specifically, HCPCS codes, that are
reported on HOPD claims. 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 PLA CPT codes. Level II, which is established and 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 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 (MAAA);
[[Page 71795]]
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 final rule with comment
period, specifically, the ``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 status
indicators and their definitions in Addendum D1 to this final rule with
comment period.
1. HCPCS Codes That Were Effective for April 2022 for Which We
Solicited Public Comments in the CY 2023 OPPS/ASC 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. We solicited public comments on the proposed APC and status
indicator assignments for the codes listed in Table 5 (New HCPCS Codes
Effective April 1, 2022) of the CY 2023 OPPS/ASC proposed rule (87 FR
44539-44541), which are also displayed in Table 7.
We received some public comments on the proposed OPPS APC and SI
assignments for the new Level II HCPCS codes implemented in April 2022.
The comments and our responses are addressed in their respective
sections of this final rule with comment period, which include, but are
not limited to: sections III.C. (New Technology APCs), III.E. (OPPS
APC-Specific Policies), and IV. (OPPS Payment for Devices). For those
April 2022 codes for which we received no comments, we are finalizing
the proposed APC and status indicator assignments. We note that several
of the temporary HCPCS C-codes have been replaced with permanent HCPCS
J-codes, effective January 1, 2023.\6\ Their replacement codes are
listed in Table 7. In addition, in prior years we included the final
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 7. Therefore, readers are
advised to refer to the OPPS Addendum B for the final OPPS status
indicators, APC assignments, and payment rates for all codes reportable
under the hospital OPPS. These new codes that were effective April 1,
2022, were assigned to comment indicator ``NP'' in Addendum B to the CY
2023 OPPS/ASC proposed rule to indicate that the codes are assigned to
an interim APC assignment and comments would be accepted on their
interim APC assignments. The complete list of status indicators and
definitions used under the OPPS can be found in Addendum D1 to this
final rule with comment period, while the complete list of comment
indicators and definitions can be found in Addendum D2 to this final
rule with comment period. 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.
---------------------------------------------------------------------------
\6\ HCPCS C-codes are temporary billing codes that describe
items and services for hospital outpatient use, including pass-
through devices, pass-through drugs and biologicals, brachytherapy
sources, new technology procedures, and certain other services.
HCPCS J-codes are permanent billing codes that describe drugs.
---------------------------------------------------------------------------
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2. HCPCS Codes That Were Effective July 1, 2021, for Which We Solicited
Public Comments in the CY 2023 OPPS/ASC 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. We solicited
public comments on the proposed APC and status indicator assignments
for the codes listed in Table 6 (New HCPCS Codes Effective July 1,
2022) of the CY 2023 OPPS/ASC proposed rule, which are also listed in
Table 8 below.
We received some public comments on the proposed OPPS APC and SI
assignments for the new Level II HCPCS codes implemented in July 1,
2022. The comments and our responses are addressed in their respective
sections of this final rule with comment period, which include, but are
not limited to: sections III.C (New Technology APCs), III.E (OPPS APC-
Specific Policies), and IV (OPPS Payment for Devices). For those July
1, 2022, codes for which we received no comments, we are finalizing the
proposed APC and status indicator assignments. We note that several of
the HCPCS C-codes have been replaced with HCPCS J-codes and one with a
HCPCS Q-code. Their replacement codes are listed in Table 8 below. We
note that in prior years we included the final 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 8 below. Therefore, readers are advised to refer to the
OPPS Addendum B for the final OPPS status indicators, APC assignments,
and payment rates for all codes reportable under the hospital OPPS.
These new codes that were effective July 1, 2022, were assigned to
comment indicator ``NP'' in Addendum B to the CY 2023 OPPS/ASC proposed
rule to indicate that the codes are assigned to an interim APC
assignment and comments would be accepted on their interim APC
assignments. The complete list of status indicators and definitions
used under the OPPS can be found in Addendum D1 to this final rule with
comment period, while the
[[Page 71799]]
complete list of comment indicators and definitions can be found in
Addendum D2 to this final rule with comment period. 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.
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[[Page 71802]]
3. October 2022 HCPCS Codes for Which We Are Soliciting Public Comments
in This CY 2023 OPPS/ASC Final Rule With Comment Period
As has been our practice in the past, we are soliciting comments on
the new CPT and Level II HCPCS codes that became effective October 1,
2022, in this 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 proposed 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 invite
public comments in this final rule with comment period on the status
indicator and APC assignments for these codes, which would 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 Are Soliciting Public Comments
in This CY 2023 OPPS/ASC Final Rule With Comment Period
Consistent with past practice, we are soliciting comments on the
new Level II HCPCS codes that will be effective January 1, 2023, in
this 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 the CY 2023 OPPS/ASC proposed rule, most Level II HCPCS codes are
not released until sometime around November to be effective January 1.
Because these codes are not available until November, we are unable to
include them in the OPPS/ASC proposed rules. Consequently, for CY 2023,
we proposed 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 are finalizing our process of
continuing our established policy of assigning comment indicator ``NI''
in Addendum B to this 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 are inviting public comments in this final rule with
comment period on the status indicator and APC assignments for these
codes, which would be finalized in the CY 2024 OPPS/ASC final rule with
comment period.
b. CPT Codes for Which We Solicited Public Comments in the CY 2023
OPPS/ASC Proposed Rule
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66841
through 66844), we finalized a revised process of assigning APC and
status indicators for new and revised Category I and III CPT codes that
would be effective January 1. Specifically, for the new/revised CPT
codes that we receive in a timely manner from the AMA's CPT Editorial
Panel, we finalized our proposal to include the codes that would be
effective January 1 in the OPPS/ASC proposed rules, along with proposed
APC and status indicator assignments for them, and to finalize the APC
and status indicator assignments in the OPPS/ASC final rules beginning
with the CY 2016 OPPS update. For those new/revised CPT codes that were
received too late for inclusion in the OPPS/ASC proposed rule, we
finalized our proposal to establish and use HCPCS G-codes that mirror
the predecessor CPT codes and retain the current APC and status
indicator assignments for a year until we can propose APC and status
indicator assignments in the following year's rulemaking cycle. We note
that even if we find that we need to create HCPCS G-codes in place of
certain CPT codes for the PFS proposed rule, we do not anticipate that
these HCPCS G-codes will always be necessary for OPPS purposes. We will
make every effort to include proposed APC and status indicator
assignments for all new and revised CPT codes that the AMA makes
publicly available in time for us to include them in the proposed rule,
and to avoid resorting to use of HCPCS G-codes and the resulting delay
in utilization of the most current CPT codes. Also, we finalized our
proposal to make interim APC and status indicator assignments for CPT
codes that are not available in time for the proposed rule and that
describe wholly new services (such as new technologies or new surgical
procedures), to solicit public comments in the final rule, and to
finalize the specific APC and status indicator assignments for those
codes in the following year's final rule.
For the CY 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 reminded readers that the CPT code descriptors that
appear in Addendum B are short descriptors and do not accurately
describe the complete procedure, service, or item described by the CPT
code. Therefore, we included the 5-digit placeholder codes and their
long descriptors for the new and revised CY 2023 CPT codes in Addendum
O to the proposed rule (which is available via the internet on the CMS
website) so that the public could adequately comment on the proposed
APCs and SI assignments. The 5-digit placeholder codes were included in
Addendum O, specifically under the column labeled ``CY 2023 OPPS/ASC
Proposed Rule 5-Digit AMA Placeholder Code,'' to the proposed rule. We
noted that the final CPT code numbers would be included in this CY 2023
OPPS/ASC final rule with comment period. We also noted that not every
code listed in Addendum O is subject to public comment. For the new and
revised Category I and III CPT codes, we requested public comments on
only those codes that are assigned comment indicator ``NP''.
In summary, in the CY 2023 OPPS/ASC proposed rule, we solicited
public comments on the proposed CY 2023 SI and APC assignments for the
new and revised Category I and III CPT codes that will be effective
January 1, 2023. The CPT codes were listed in Addendum B to the
proposed rule with short descriptors only. We listed them again in
Addendum O to the proposed rule with long descriptors. We also proposed
to finalize the SI 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 SI and APC assignments for these codes were
included in
[[Page 71803]]
Addendum B to the proposed rule (which is available via the internet on
the CMS website).
We received comments on several of the new CPT codes that were
assigned to comment indicator ``NP'' in Addendum B to the CY 2023 OPPS/
ASC proposed rule. We have responded to those public comments in
sections III.C (New Technology APCs), III.E (OPPS APC-Specific
Policies), and IV (OPPS Payment for Devices) of this final rule with
comment period.
The final SIs, APC assignments, and payment rates for the new CPT
codes that are effective January 1, 2023, can be found in Addendum B to
this final rule with comment period. In addition, the SI meanings can
be found in Addendum D1 (OPPS Payment Status Indicators for CY 2023) to
this final rule with comment period. Both Addendum B and D1 are
available via the internet on the CMS website.
Finally, Table 9 below, which is a reprint of Table 7 from the CY
2023 OPPS/ASC proposed rule (87 FR 44548), shows the comment timeframe
for new and revised HCPCS codes. Table 9 provides information on our
current process for updating codes through our OPPS quarterly update
CRs, seeking public comments, and finalizing the treatment of these
codes under the OPPS.
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B. OPPS Changes--Variations Within APCs
1. Background
Section 1833(t)(2)(A) of the Act requires the Secretary to develop
a classification system for covered hospital outpatient department
services. Section 1833(t)(2)(B) of the Act provides that the Secretary
may establish groups of covered OPD services within this classification
system, so that services classified within each group are comparable
clinically and with respect to the use of resources. In accordance with
these provisions, we developed a grouping classification system,
referred to as Ambulatory Payment Classifications (APCs), as set forth
in regulations at 42 CFR 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
[[Page 71804]]
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 rule.
Under the OPPS, we generally pay for covered hospital outpatient
department services on a rate-per-service basis, where the service may
be reported with one or more HCPCS codes. Payment varies according to
the APC group to which the independent service or combination of
services is assigned. In the CY 2023 OPPS/ASC proposed rule (87 FR
44548), for CY 2023, we proposed that each APC relative payment weight
represents the hospital cost of the services included in that APC,
relative to the hospital cost of the services included in APC 5012
(Clinic Visits and Related Services). The APC relative payment weights
are scaled to APC 5012 because it is the hospital clinic visit APC and
clinic visits are among the most frequently furnished services in the
hospital outpatient setting.
2. Application of the 2 Times Rule
Section 1833(t)(9)(A) of the Act requires the Secretary to review,
not less often than annually, and revise the APC groups, the relative
payment weights, and the wage and other adjustments described in
paragraph (2) to take into account changes in medical practice, changes
in technology, the addition of new services, new cost data, and other
relevant information and factors. Section 1833(t)(9)(A) of the Act also
requires the Secretary to consult with an expert outside advisory panel
composed of an appropriate selection of representatives of providers to
review (and advise the Secretary concerning) the clinical integrity of
the APC groups and the relative payment weights. We note that the
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 this final rule with comment period.
In addition, section 1833(t)(2) of the Act provides that, subject
to certain exceptions, the items and services within an APC group
cannot be considered comparable with respect to the use of resources if
the highest cost for an item or service in the group is more than 2
times greater than the lowest cost for an item or service within the
same group (referred to as the ``2 times rule''). The statute
authorizes the Secretary to make exceptions to the 2 times rule in
unusual cases, such as for low-volume items and services (but the
Secretary may not make such an exception in the case of a drug or
biological that has been designated as an orphan drug under section 526
of the Federal Food, Drug, and Cosmetic Act). 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). For an example of significant procedure codes, refer to the
discussion on cardiac computed tomography angiography (CCTA),
specifically as it relates to CPT codes 75572 and 75574, which are
discussed in section III.E. (Cardiac Computed Tomography Angiography
(CCTA) (APC 5571)) of this final rule with comment period. This
longstanding definition of when a procedure code is significant for
purposes of the 2 times rule was selected because we believe that a
subset of 1,000 or fewer claims is negligible within the set of
approximately 100 million single procedure or single session claims we
use for establishing costs. Similarly, a procedure code for which there
are fewer than 99 single claims and that comprises less than 2 percent
of the single major claims within an APC will have a negligible impact
on the APC cost (75 FR 71832). In the CY 2023 OPPS/ASC proposed rule,
for CY 2023, we proposed to make exceptions to this limit on the
variation of costs within each APC group in unusual cases, such as for
certain low-volume items and services.
For the CY 2023 OPPS update, we identified the APCs with violations
of the 2 times rule and we proposed changes to the procedure codes
assigned to these APCs (with the exception of those APCs for which we
proposed a 2 times rule exception) in Addendum B to the CY 2023 OPPS/
ASC proposed rule. We note that Addendum B does not appear in the
printed version of the Federal Register as part of this final rule with
comment period. 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 did not propose a 2 times rule
exception, we proposed to reassign these procedure codes to new APCs
that contain services that are similar with regard to both their
clinical and resource characteristics. Refer to section III.E (APC-
Specific Policies) of this final rule with comment period for examples
of various APC reassignments. In many cases, the proposed procedure
code reassignments and associated APC reconfigurations for CY 2023
included in the CY 2023 OPPS/ASC 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 the CY 2023 OPPS/ASC
proposed rule identifies with a comment indicator ``CH'' those
procedure codes for which we proposed a change to the APC assignment or
status indicator, or both, that were initially assigned in the July 1,
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. APC Exceptions to the 2 Times Rule
Taking into account the APC changes that we proposed 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 the CY 2023 OPPS/ASC
proposed rule, we found 23 APCs with violations of the 2 times rule. We
applied the criteria as described above to identify the APCs for which
we proposed to make exceptions under the 2 times rule for CY 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 the CY 2023 OPPS/ASC proposed rule. We note that, on an
annual basis, based on our analysis of the latest claims data, we
identify
[[Page 71805]]
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 10 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 the CY 2023 OPPS/ASC proposed rule listed the 23 APCs
for which we proposed 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: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html.
Based on the updated final rule CY 2021 claims data used for this
CY 2023 final rule with comment period, we found a total of 25 APCs
with violations of the 2 times rule. Of these 25 total APCs, 22 were
identified in the proposed rule and three are newly identified APCs.
The three newly identified APCs with violations of the 2 times rule are
the following:
APC 5341 (Abdominal/Peritoneal/Biliary and Related Procedures)
APC 5361 (Level 1 Laparoscopy and Related Services)
APC 5723 (Level 3 Diagnostic Tests and Related Services)
Although we did not receive any comments on Table 8 of the CY 2023
OPPS/ASC proposed rule (87 FR 44550), we did receive comments on APC
assignments for specific HCPCS codes. The comments, and our responses,
can be found in section III.D. (OPPS APC-Specific Policies) of this
final rule with comment period.
After considering the public comments we received on APC
assignments and our analysis of the CY 2021 costs from hospital claims
and cost report data available for this CY 2023 OPPS/ASC final rule
with comment period, we are finalizing our proposals with some
modifications. Specifically, we are finalizing our proposal to except
22 of the 23 proposed APCs from the 2 times rule for CY 2021 and also
excepting three additional APCs (APCs 5341, 5361, and 5723) for a total
of 25 APCs.
In summary, Table 10 below lists the 25 APCs that we are excepting
from the 2 times rule for CY 2023 based on the criteria described
earlier and a review of updated claims data for dates of service
between January 1, 2021, and December 31, 2021, that were processed on
or before June 30, 2022, and updated CCRs, if available. We note that,
for cases in which a recommendation by the HOP Panel appears to result
in or allow a violation of the 2 times rule, we generally accept the
HOP Panel's recommendation because those recommendations are based on
explicit consideration of resource use, clinical homogeneity, site of
service, and the quality of the claims data used to determine the APC
payment rates. The geometric mean costs for hospital outpatient
services for these and all other APCs that were used in the development
of this final rule with comment period can be found on the CMS website
at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
BILLING CODE 4120-01-P
[[Page 71806]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.020
BILLING CODE 4120-01-C
C. New Technology APCs
1. Background
In the CY 2002 OPPS final rule (66 FR 59903), we finalized changes
to the time period in which a service can be eligible for payment under
a New Technology APC. Beginning in CY 2002, we retain services within
New Technology APC groups until we gather sufficient claims data to
enable us to assign the service to an appropriate clinical APC. This
policy allows us to move a service from a New Technology APC in less
than 2 years if sufficient data are available. It also allows us to
retain a service in a New Technology APC for more than 2 years if
sufficient data upon which to base a decision for reassignment have not
been collected.
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
[[Page 71807]]
MEARISTM 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 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 included the proposed payment rates for New Technology APCs 1491 to
1599 and 1901 through 1908 in Addendum A to the CY 2023 OPPS/ASC
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.
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
[[Page 71808]]
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 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. In the
CY 2023 OPPS/ASC proposed rule, we proposed 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.
We did not receive any public comments on our proposed methodology
for assigning low volume new technology procedures to New Technology
APCs and, therefore, we are finalizing our proposal without
modification.
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 proposed to
retain services within New Technology APC groups until we obtain
sufficient claims data to justify reassignment of the service to an
appropriate clinical APC. The flexibility associated with this policy
allows us to reassign a service from a New Technology APC in less than
2 years if we have 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).
We did not receive any public comments on our proposal 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, and we are finalizing our proposal without modification.
The procedures assigned to the New Technology APCs are discussed below.
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/ASC final rule with comment period (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 proposed 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
[[Page 71809]]
Argus[supreg] II device or the device implantation procedure. These
changes are described in Table 11.
We did not receive any public comments on our proposal and,
therefore, we are finalizing our proposal without modification.
[GRAPHIC] [TIFF OMITTED] TR23NO22.021
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 CPT 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 ($3001-$3500)). This code may be used to describe
the administration of HCPCS 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 ($3001-$3500))
for HCPCS code C9770 (86 FR 63531 through 63532).
HCPCS 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.\7\ 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.''
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\7\ Luxturna. FDA Package Insert. Available: https://www.fda.gov/media/109906/download.
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Interested parties, including the manufacturer of Luxturna[supreg],
recommended CPT code 67036 (Vitrectomy, mechanical, pars plana
approach) for the administration of the gene therapy.\8\ However, the
manufacturer previously contended the administration was not accurately
described by any existing codes as CPT code 67036 (Vitrectomy,
mechanical, pars plana approach) does not account for the
administration itself.
---------------------------------------------------------------------------
\8\ 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 CPT 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 CPT 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 CPT code 67036. The placeholder
code C97X1 was replaced by HCPCS code C9770. For CY 2021, we finalized
our proposal to create HCPCS code C9770 (Vitrectomy, mechanical, pars
plana approach, with subretinal injection of pharmacologic/biologic
agent), and we assigned this code to APC 1561 (New Technology--Level 24
($3001-$3500)) using the geometric mean cost of CPT code 67036. For CY
2022, we continued to assign HCPCS code C9770 to APC 1561 (New
Technology--Level 24 ($3001-$3500)) using the geometric mean cost of
CPT 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 CPT code 67036. Given the low number of claims for this
procedure, we proposed to
[[Page 71810]]
designate HCPCS code 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 HCPCS code 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 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 ($3501-$4000)). Therefore, we proposed to assign
HCPCS code C9770 to APC 1562 for CY 2023.
Please refer to Table 12 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 the CY
2023 OPPS/ASC proposed rule (87 FR 44502).
[GRAPHIC] [TIFF OMITTED] TR23NO22.022
Comment: We received a comment in support of the proposal to
reassign HCPCS code C9770 to APC 1562 based on the most recent claims
data.
Response: We thank this commenter for their support. After
consideration of the public comment we received, we are finalizing our
policy as proposed. Specifically, we are finalizing our proposal to
base the payment rate of HCPCS code C9770 on claims data for that code
rather than on the geometric mean cost of CPT code 67036. We are also
finalizing our proposal to designate HCPCS code 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 HCPCS code C9770 to a New Technology APC.
Based on updated claims data available for this final rule with
comment period, we have 13 single frequency claims available for
ratesetting. Based on this updated claims data, we found the geometric
mean cost for the service to be approximately $3,358, the arithmetic
mean cost to be approximately $3,489, and the median cost to be
approximately $3,770. 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 ($3501-$4000)). Therefore, we are
assigning HCPCS code C9770 to APC 1562 for CY 2023.
Please refer to Table 13 below for the final OPPS New Technology
APC and status indicator assignments for HCPCS code C9770 for CY 2023.
The final CY 2023 payment rates can be found in Addendum B to this
final rule with comment period.
[GRAPHIC] [TIFF OMITTED] TR23NO22.023
[[Page 71811]]
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 ($3501-$4000)). Therefore, we assigned
HCPCS code C9751 to APC 1562 for CY 2021.
In CY 2022, we again used 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 proposed 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 ($3501-$4000)). Therefore, we proposed to continue
to assign HCPCS code C9751 to APC 1562 (New Technology--Level 25
($3501-$4000)), with a proposed payment rate of $3,750.50 for CY 2023.
Details regarding HCPCS code C9751 are included in Table 14 below.
Comment: One commenter supported our assignment of HCPCS code C9751
to New Technology APC 1562.
Response: We appreciate the support of the commenter for our
policy. After consideration of the public comment we received, we are
implementing our proposal without modification.
[[Page 71812]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.024
d. Cardiac Positron Emission Tomography (PET)/Computed Tomography (CT)
Studies (APCs 1520, 1521, 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 ($2001-$2500)) with a payment rate
of $2,250.50. CPT codes 78432 and 78433 were assigned to APC 1523 (New
Technology--Level 23 ($2501-$3000)) with a payment rate of $2,750.50.
We did not receive any claims data for these services for 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 ($2001-$2500)) 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 ($2501-$3000)) with a payment rate of
$2,750.50.
For CY 2023, we proposed 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 ($2001-
$2500)), where the procedure is currently assigned. We proposed, for CY
2023, that CPT code 78431 be reassigned to APC 1523 (New Technology--
Level 23 ($2501-$3000)) with a payment rate of $2,750.50. Please refer
to Table 15 below for the proposed New Technology APC and status
indicator assignments for CPT code 78431.
There were only five 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 proposed 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 4
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 proposed, for CY 2023, to assign CPT code 78432
to APC 1520 (New Technology--Level 20 ($1801-$1900)) with a payment
rate of $1,850.50. Please refer to Table 15 for the proposed 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 ($2501-$3000)), where the procedure is
currently assigned. We proposed, for CY 2023, that CPT code 78433 be
reassigned to APC 1521 (New Technology--Level 21 ($1901-$2000)) with a
payment rate of $1,950.50.
Comment: Multiple commenters supported the assignment of CPT code
78431 to APC 1523. However, these commenters also requested that CPT
codes 78432 and 78433 also be assigned to APC 1523. The commenters felt
that the number of claims available to estimate the cost of CPT codes
78432 and 78433 was not enough to accurately calculate the costs of
those services, and that the current cost estimates for the services
underestimate the services' actual costs.
Response: We appreciate the commenters' support of our assignment
of CPT code 78431 to APC 1523. CPT code 78431 has a geometric mean of
approximately $2,532 and will continue to be assigned to APC 1523 (New
Technology--Level 23 ($2501-$3000)).
Regarding the assignments for CPT codes 78432 and 78433, since CY
2019 we have had in place a policy to estimate the cost of services
assigned to
[[Page 71813]]
new technology APCs with a low volume of claims. The threshold for the
low volume policy to apply to a service is 100 separately payable
claims. We have identified 1,034 separately payable claims for CPT code
78433, which is well above the threshold for the low volume
methodology. Therefore, we use the geometric mean to calculate the cost
of the service described by CPT code 78433, and that cost is
approximately $1,998. That cost falls in the cost range for APC 1521 of
$1,901 to $2,000, and therefore, we believe APC 1521 is the appropriate
APC assignment for this service.
Regarding CPT code 78432, there continues to be only five
separately payable claims for the service. Therefore, we use the new
technology low volume policy to determine the appropriate APC
assignment for this service. We 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 4 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 $1,900, 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 of
approximately $1,900, and therefore, the appropriate APC assignment for
the service is APC 1520 (New Technology--Level 20 ($1801-$1900)).
After consideration of the public comments we received, we are
implementing our proposal without modification to assign CPT code 78431
to APC 1523, CPT code 78432 to APC 1520, and CPT code 78433 to APC
1521.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR23NO22.025
[[Page 71814]]
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 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 with comment period. 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
proposed to continue to assign HCPCS code C9758 to New Technology APC
1590 with a payment rate of $17,500.50 for CY 2023.
Comment: One commenter supported our assignment of HCPCS code C9758
to APC 1590.
Response: We appreciate the commenter's support for our proposal.
After consideration of the public comment we received, we are
finalizing our proposal without modification. The final New Technology
APC and status indicator assignments for HCPCS code C9758 are shown in
Table 16.
[[Page 71815]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.026
f. Corvia Medical Interatrial Shunt Procedure (APC 1592)
Corvia Medical has conducted 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.\9\ 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
payment for the implantation of the Corvia Medical interatrial shunt.
---------------------------------------------------------------------------
\9\ 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
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 proposed 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 proposed to continue to assign HCPCS code C9760 to New
Technology APC 1592.
Comment: One commenter, the manufacturer, supported our proposal to
assign HCPCS code C9760 to APC 1592.
Response: We appreciate the commenter's support for our proposal.
After consideration of the public comment we received, we are
finalizing our proposal without modification. The final New Technology
APC and status
[[Page 71816]]
indicator assignments for HCPCS code C9760 are shown in Table 17.
[GRAPHIC] [TIFF OMITTED] TR23NO22.027
g. Supervised Visits for Esketamine Self-Administration (APCs 1512 and
1516)
On March 5, 2019, FDA approved SpravatoTM (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 esketamine nasal spray 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 esketamine nasal spray
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
2 hours after receiving their esketamine nasal spray 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 nasal spray self-administration
(84 FR 63102 through 63105).
To facilitate prompt beneficiary access to the new, potentially
life-saving treatment for TRD using esketamine, we created two new
HCPCS G codes, G2082 and G2083, effective January 1, 2020. HCPCS code
G2082 is for an outpatient visit for the evaluation and management of
an established patient that requires the supervision of a physician or
other qualified health care professional and provision of up to 56 mg
of esketamine through nasal self-administration and includes 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 proposed to use CY 2021 claims data to determine
the payment rates for HCPCS codes G2082 and G2083. Therefore, for CY
2023, we
[[Page 71817]]
proposed to assign these two HCPCS codes to New Technology APCs based
on the codes' geometric mean costs. Specifically, we proposed to assign
HCPCS code G2082 to New Technology APC 1511 (New Technology--Level 11
($901-$1000)) based on its geometric mean cost of $995.47. We also
proposed to assign HCPCS code G2083 to New Technology APC 1516 (New
Technology--Level 16 ($1401-$1500)) 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 18. The proposed
CY 2023 payment rates for these HCPCS codes can be found in Addendum B
to the CY 2023 OPPS/ASC proposed rule (87 FR 44502).
[GRAPHIC] [TIFF OMITTED] TR23NO22.028
Comment: Commenters were generally in favor of this proposal.
Commenters welcomed efforts to make this treatment more available to
beneficiaries and were supportive of CMS's proposed change to reassign
HCPCS codes G2082 and G2083 to New Technology APCs 1511 and 1516,
respectively.
Response: We thank commenters for their support. After
consideration of the public comments we received, for CY 2023, we are
finalizing our proposal to assign HCPCS codes G2082 and G2083 to New
Technology APCs based on the codes' geometric mean costs. However, we
note the geometric mean costs have changed since the proposal rule.
Based on updated claims data available for this final rule, the
approximate geometric mean cost for HCPCS code G2082 is $1,056. Based
on this geometric mean cost, we are assigning HCPCS code G2082 to APC
1512 (New Technology--Level 12 ($1001-$1100)) for CY 2023. We proposed
to assign HCPCS code G2082 to APC 1511 (New Technology--Level 11 ($901-
$1000)) based on the claims data available for the proposed rule, which
reflected an approximate geometric mean of $995. Due to updated claims
data for this final rule with comment period, we are assigning HCPCS
code G2082 to APC 1512 (New Technology--Level 12 ($1001-$1100) CY 2023.
Based on updated claims data available for this final rule with
comment period, the approximate geometric mean cost for HCPCS code
G2083 is $1,496. Based on this geometric mean cost, we are finalizing
our proposal to assign HCPCS code G2083 to APC 1516 (New Technology--
Level 16 ($1401--$1500)) for CY 2023.
Details about the New Technology APC and status indicator
assignments for HCPCS codes G2082 and G2083 are shown in Table 19
below. The final CY 2023 payment rates for these HCPCS codes can be
found in Addendum B to this CY 2023 OPPS/ASC final rule with comment
period.
[[Page 71818]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.029
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 proposed to continue assigning CPT code
0693T to New Technology APC 1505.
We did not receive any public comments on our proposal and are
finalizing our proposal without modification. The final New Technology
APC and status indicator assignments for CPT code 0693T are found in
Table 20.
[[Page 71819]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.030
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.\10\ 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.
---------------------------------------------------------------------------
\10\ 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 proposed to continue assigning CPT code
0686T to New Technology APC 1575.
We did not receive any public comments on our proposal and are
finalizing our proposal without modification. The final New Technology
APC and status indicator assignments for CPT code 0686T are found in
Table 21.
[GRAPHIC] [TIFF OMITTED] TR23NO22.031
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
[[Page 71820]]
standardized, quantitative imaging biomarkers for the characterization
and assessment of inflammation, hepatocyte ballooning, and fibrosis, as
well as steatosis, and iron accumulation. The SaaS receives MR images
acquired from patients' providers and analyzes the images using their
proprietary Artificial Intelligence (AI) algorithms. The SaaS then
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
proposed to continue assigning CPT code 0648T to New Technology APC
1511.
We did not receive any public comments on our proposal and are
finalizing continuing to assign CPT code 0648T to New Technology APC
1511. The final New Technology APC and status indicator assignments for
CPT code 0648T are found in Table 22.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR
63542), we finalized that the service represented by CPT code 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); single organ (list
separately in addition to code for primary procedure) is a packaged
service per the OPPS packaging policy for add-on code procedures. In
this final rule with comment period, however, we are adopting a policy
that Software as a Service (SaaS) add-on codes are not among the
``certain services described by add-on codes'' for which we package
payment with the related procedures or services under the regulation at
42 CFR 419.2(b)(18). Instead, SaaS CPT add-on codes will be assigned to
identical APCs and have the same status indicator assignments as their
standalone codes. Therefore, we are assigning CPT code 0649T to the
same APC as CPT code 0648T, specifically, New Technology APC 1511. We
direct readers to section X.G. (OPPS Payment for Software as a Service)
of this final rule with comment period for a more detailed discussion
of our final payment policy for SaaS.
The final New Technology APC and status indicator assignments for
CPT codes 0648T and 0649T are found in Table 22. In addition, the final
CY 2023 OPPS payment rates for CPT codes 0648T and 0649T can be found
in Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addenda B
and D1 are available via the internet on the CMS website, specifically
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
[GRAPHIC] [TIFF OMITTED] TR23NO22.032
[[Page 71821]]
k. Minimally Invasive Glaucoma Surgery (MIGS) (APC 1563)
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 anterior 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 1563 (New Technology--Level 26 ($4001-
$4500)). We stated that we believed that the change in coding for MIGS
is significant in that it changes longstanding billing for the service
from reporting two separate CPT codes to reporting a single bundled
code. Without claims data, and given the magnitude of the coding
change, we 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 the CY 2023 OPPS/ASC 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
proposed to continue assigning CPT codes 66989 and 66991 to New
Technology APC 1563 for CY 2023. The proposed New Technology APC and
status indicator assignments for CPT codes 66989 and 66991 are found in
Table 23. Regrettably, we inadvertently misidentified the APC
assignment for CPT codes 66989 and 66991 as APC 1526, rather than APC
1563, in the preamble to the proposed rule.
[[Page 71822]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.033
We did not receive any public comments on our proposal and are
finalizing our proposal without modification. The final New Technology
APC and status indicator assignments
[[Page 71823]]
for CPT codes 66989 and 66991 are found in Table 24.
[GRAPHIC] [TIFF OMITTED] TR23NO22.034
[[Page 71824]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.035
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 proposed to continue assigning CPT code
0662T to New Technology APC 1520.
We did not receive any public comments on our proposal and are
finalizing our proposal without modification. The final New Technology
APC and status indicator assignments for CPT code 0662T are found in
Table 25.
[GRAPHIC] [TIFF OMITTED] TR23NO22.036
m. Optellum 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 payable under 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 proposed
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 26.
[[Page 71825]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.037
Comment: A commenter, the manufacturer of Optellum LCP, requested
that we revise the description to the produced risk score to ``The
physician uses the risk score to quantify the risk of lung cancer and
to help determine what the next management step should be for the
patient (e.g., CT surveillance versus invasive procedure).'' The
commenter also supported the continual assignment of CPT code 0721T to
New Technology APC 1508 and stated a lower payment would disincentivize
its use.
Response: We appreciate the commenter's input on the Optellum LCP
produced risk score and agree with the suggested revision.
After consideration of the public comment, we are finalizing our
proposal without modification. Specifically, we are assigning CPT code
0721T to APC 1508 for CY 2023.
We note that the Optellum LCP service is also represented by CPT
code 0722T, which is an add-on code. In this final rule with comment
period, we are adopting a policy that SaaS add-on codes are not among
the ``certain services described by add-on codes'' for which we package
payment with the related procedures or services under the regulation at
42 CFR 419.2(b)(18). Instead, SaaS CPT add-on codes will be assigned to
identical APCs and have the same status indicator assignments as their
standalone codes. Therefore, we are assigning CPT code 0722T to New
Technology APC 1508. We direct readers to section X.G. (OPPS Payment
for Software as a Service) of this final rule with comment period for a
more detailed.
The final New Technology APC and status indicator assignments for
CPT codes 0721T and 0722T are found in Table 27.
The final CY 2023 OPPS payment rates for CPT codes 0721T and 0722T
can be found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the SI meanings for all codes reported under the
OPPS. Both Addenda B and D1 are available via the internet on the CMS
website, specifically at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
[[Page 71826]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.038
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 New
Technology APC 1511 (New Technology--Level 11($900-$1,000)).
This service became payable under 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 proposed 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 28.
[[Page 71827]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.039
Comment: A commenter, the manufacturer of QMRCP, supported the
continual assignment of CPT 0723T to New Technology APC 1511.
Response: We thank the commenter for their input on the assignment
of CPT 0723T to New Technology APC 1511.
After consideration of the public comment, we are finalizing our
proposal without modification. Specifically, we are assigning CPT code
0723T to APC 1511 for CY 2023.
We note that the QMRCP service is also represented by CPT code
0724T, which is an add-on code. In this final rule with comment period,
we are adopting a policy that SaaS add-on codes are not among the
``certain services described by add-on codes'' for which we package
payment with the related procedures or services under the regulation at
42 CFR 419.2(b)(18). Instead, SaaS CPT add-on codes will be assigned to
identical APCs and have the same status indicator assignments as their
standalone codes. Therefore, we are assigning CPT code 0724T to New
Technology APC 1511. We direct readers to section X.G. (OPPS Payment
for Software as a Service) of this final rule with comment period for a
more detailed discussion.
The final New Technology APC and status indicator assignments for
CPT codes 0723T and 0724T are found in Table 29.
The final CY 2023 OPPS payment rates for CPT codes 0723T and 0724T
can be found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the SI meanings for all codes reported under the
OPPS. Both Addenda B and D1 are available via the internet on the CMS
website, specifically at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
[[Page 71828]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.040
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 \11\ and the CardiAMP Cell Therapy Heart
Failure Trial.\12\ 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. We direct readers to
section X.F. (Coding and Payment for Category B Investigational Device
Exemption Clinical Devices and Studies) of this final rule with comment
period for a more detailed discussion of coding and payment for
Category B IDE devices and studies.
---------------------------------------------------------------------------
\11\ 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.
\12\ 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.
---------------------------------------------------------------------------
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. (Pass-Through Payment for
Devices) of this final rule with comment period for a more detailed
discussion of the transitional device pass-through applications.
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 proposed
to assign HCPCS code C9782 to New Technology APC 1590 with a status
indication of ``T''.
We did not receive any public comments on our proposal and are
finalizing our proposal to assign HCPCS code C9782 to New Technology
APC 1590 with a status indication of ``T''. The final New Technology
APC and
[[Page 71829]]
status indicator assignments for HCPCS code C9782 are found in Table
30.
[GRAPHIC] [TIFF OMITTED] TR23NO22.041
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 the CY 2023
OPPS/ASC 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 four 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 the CY 2023 OPPS/ASC proposed
rule, we proposed 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 CY 2023
OPPS/ASC proposed rule.
Table 31 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 APC's designation as a low volume APC; and
the statistical methodology we proposed to use to determine the APC's
cost for ratesetting purposes for CY 2023. For APC 5494 (Level 4
Intraocular Procedures) and APC 5495 (Level 5 Intraocular Procedures),
we are finalizing an APC cost metric based on
[[Page 71830]]
the median cost, the greatest of the cost metrics, using up to four
years of claims data. For all other Low Volume APCs, we are finalizing
an APC cost metric based on the arithmetic mean cost, the greatest of
the cost metrics, using up to four years of claims data. 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.
Comment: Some commenters supported our proposed use of the Low
Volume APC methodology for the clinical and brachytherapy APCs with
fewer than 100 claims available for ratesetting. One commenter was
concerned about the proposed payment rate for APC 5495 (Level 5
Intraocular Procedures), which would represent a 32 percent reduction
from the CY 2022 payment rate for CPT code 0308T (Insertion of ocular
telescope prosthesis including removal of crystalline lens or
intraocular lens prosthesis). The commenter recommended that we use the
equitable adjustment authority to apply a cap of 10 percent on the
reduction in relative weights for Low Volume APCs in CY 2023. The
commenter noted that a similar 10 percent cap on the decline in the
relative weight for a Medicare Severity-adjusted Diagnosis-Related
Group (MS-DRG) is applied under the IPPS.
Response: We appreciate commenters' support for our proposal to
utilize our Low Volume APC methodology for APCs with fewer than 100
claims available for ratesetting. While we acknowledge the CY 2023
payment rate for APC 5495 represents a sizeable reduction from the CY
2022 payment rate, and that CPT code 0308T was the only procedure
assigned to this APC in CY 2022, we believe the CY 2023 payment rate
represents the historical tendency for this procedure as shown in Table
31 below.
Nonetheless, as discussed in section III.C of this final rule with
comment period, we are accepting commenters' recommendation and
assigning CPT code 0616T (Insertion of iris prosthesis, including
suture fixation and repair or removal of iris, when performed; without
removal of crystalline lens or intraocular lens, without insertion of
intraocular lens) to APC 5495. The reassignment of CPT code 0616T to
APC 5495 increases the CY 2023 APC cost metric from the proposed
$16,711.80 to $18,602.90 and increases the OPPS payment rate from
$16,564.54 to $18,089.98.
After re-evaluating the APC 5495 cost metric following the
reassignment of 0616T to APC 5495, given the increase in the OPPS
payment rate from the proposed to the final rule and the historical
payment rates for this APC, we are not accepting the commenter's
recommendation to limit a Low Volume APC's decline in relative weights
to no more than 10 percent. However, given the low claims volume for
these APCs, as well as the high cost of many of these APCs, we will
continue to monitor the costs and payment rates for procedures assigned
to Low Volume APCs to determine if additional changes or refinements to
our current policy are needed.
[GRAPHIC] [TIFF OMITTED] TR23NO22.042
After consideration of the public comments we received, based on
claims data for this final rule with comment period, for CY 2023, we
are finalizing our proposal to continue to use up to 4 years of claims
data to calculate Low Volume APCs' costs based on the greater of the
median cost, arithmetic mean cost, or geometric mean cost. We note that
APC 5881 (Ancillary Outpatient Services When Patient Dies) had at least
100 claims for ratesetting based on claims data available for this
final rule with comment period, whereas for the CY 2023 OPPS/ASC
proposed rule only 71 claims were available. Despite not meeting our
threshold for fewer than 100 claims, we are finalizing our proposal to
designate APC 5881 as a Low Volume APC since stakeholders would not
have had an opportunity to comment on the significant change in payment
for this APC if we were to not apply our Low Volume APC methodology.
Therefore, we are finalizing the APCs described in Table 32 as Low
Volume APCs for CY 2023 and determining their payment rates using the
Low Volume APC methodology. These four brachytherapy APCs and four
clinical APCs are the same eight APCs we proposed to designate as Low
Volume APCs in the CY 2023 OPPS/ASC proposed rule (87 FR 44568 through
44569).
[[Page 71831]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.043
E. APC-Specific Policies
1. Abdominal Hernia Repair (APCs 5341 and 5361)
For CY 2023, the CPT Editorial Panel deleted 18 abdominal hernia
repair codes that were established in 1984 and 2009 and replaced them
with 15 new codes. The 18 abdominal hernia repair codes will be deleted
December 31, 2022, and replaced with new CPT codes effective January 1,
2023.
As listed in Table 33, the predecessor/deleted codes were assigned
to one of the following APCs for CY 2022:
APC 5341: Abdominal/Peritoneal/Biliary and Related Procedures
APC 5361: Level 1 Laparoscopy and Related Services
APC 5362: Level 2 Laparoscopy and Related Services
[[Page 71832]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.044
Based on our evaluation of the new codes and because the
predecessor codes are not a one-to-one match to the new CPT codes, we
proposed to assign the new codes to APC 5341, as shown in Table 34 for
CY 2023. Specifically,
[[Page 71833]]
we proposed to assign six of the 15 new codes to inpatient-only status,
one to packaged/bundled status because the code describes an add-on
procedure, and eight codes to APC 5341 with a proposed payment rate of
$3,235.68. We indicated in the CY 2023 OPPS/ASC proposed rule that the
final 5-digit CPT codes were not available when we published the
proposed rule, so we included the placeholder codes in OPPS Addendum B.
We also note that the predecessor and new codes were included in OPPS
Addendum B with only the short descriptors. Because the short
descriptors do not adequately describe the complete procedure, we
included the 5-digit placeholder codes and long descriptors in Addendum
O so that the public could adequately comment on the proposed APC and
SI assignments. The 5-digit placeholder codes were included in Addendum
O, specifically under the column labeled ``CY 2023 OPPS/ASC Proposed
Rule 5-Digit AMA/CMS Placeholder Code.'' We further stated in the
proposed rule that the final CPT code numbers would be included in this
CY 2023 OPPS/ASC final rule with comment period.
[[Page 71834]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.045
[[Page 71835]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.046
[[Page 71836]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.047
At the August 22, 2022, HOP Panel Meeting, a presenter provided
information to the Panel on the APC assignments for the predecessor
codes as well as the proposed APC assignments for the new codes. Based
on the information presented at the meeting, the Panel made no
recommendation on the APC assignments for the new codes.
Comment: Some commenters disagreed with the proposed assignment to
APC 5341 for the eight separately payable codes, and provided their
recommendations on the APC
[[Page 71837]]
reassignments. They stated that the proposed APC assignment for the new
codes would be insufficient to cover the cost of furnishing the
procedures, and would impact beneficiary access. The commenters stated
that the predecessor codes are not a one-to-match to the new codes, and
that some of the predecessor codes crosswalk to multiple new codes.
They also noted that the geometric mean cost for the predecessor codes
exceed the proposed payment rate of $3,235, and assignment of the new
codes to APC 5341 would result in significant underpayment for the
procedures. Based on the geometric mean cost for the predecessor codes,
several of the commenters recommended reassignment of the new codes to
the Level 1 and Level 2 laparoscopy APCs, specifically, APCs 5361 and
5362, and noted that many of the new codes are laparoscopic in nature.
A few commenters identified the specific codes that should be
crosswalked to APCs 5361 and 5362. Other commenters recommended
establishing a new APC by grouping the new codes based on the length of
the hernia or by length of the hernia, recurrence, and whether the
hernia is incarcerated or strangulated. Some commenters suggested
reassigning the eight codes to the Level 1 Laparoscopy APC,
specifically, APC 5361, while another recommended assignment to New
Technology APC 1566 (New Technology--Level 29 ($5501-$6000); proposed
payment of $5,750.50). Some commenters favored establishing a new APC
for the eight separately payable codes and suggested establishing the
cost for the new APC based on the cost data from the predecessor codes.
A few commenters specifically suggested establishing a new Level 2
Abdominal/Peritoneal/Biliary and Related Procedures APC.
Response: We appreciate the feedback and the many suggestions on
the APC reassignments. Of the 15 new codes, 12 codes describe the
repair of anterior abdominal hernias, specifically, epigastric,
incisional, ventral, umbilical, and spigelian hernias that are
performed via an open, laparoscopic, and robotic approach. Based on our
review of the new codes, we noted that the eight new codes proposed to
APC 5341 have one consistent feature in their code descriptions,
specifically, that they are described as either ``reducible'' or
``incarcerated/strangulated.'' This characteristic of ``reducible'' and
``incarcerated/strangulated'' is also present in the predecessor/
deleted codes. The descriptions of ``reducible'' and ``incarcerated/
strangulated'' appear in both the predecessor and new codes, and
because we have claims data for the predecessor codes, we believe that
establishing the APCs based on this distinction provides us with more
appropriate payments for the new codes.
As stated above, the predecessor codes are not a one-to-match to
the new codes, however, based on the various recommendations on the APC
reassignment, further deliberation on the issue, and input from our
medical advisors, we believe that assigning the new codes to APCs 5341
and 5361 is the best option at this time. Consequently, we reconfigured
APCs 5341 and 5361 by mapping the predecessor and new codes described
as ``reducible'' to APC 5341 and the more complex and extensive
``incarcerated/strangulated'' procedures to APC 5361. We note that we
mapped predecessor CPT code 49590, which is not described as either
``reducible'' or ``incarcerated/strangulated'' to APC 5341 since its
geometric mean cost of about $4,134 is more consistent with the
geometric mean cost of about $3,642 for APC 5341, rather than the
geometric mean cost of approximately $5,360 for APC 5361. Based on our
reconfiguration, the geometric mean cost for APC 5341 is approximately
$3,642 while the geometric mean cost for APC 5361 is about $5,360. We
believe the APC reconfigurations for APCs 5341 and 5361 will result in
more appropriate payments for the new abdominal hernia repair codes and
improves the clinical and resource homogeneity within the groupings.
As stated above, we received many suggestions on the APC
reassignments for the new codes. We evaluated the recommendations,
modeled the suggestions, and analyzed the cost results of each
suggestion. Based on our analysis, we believe that assignment of the
new codes to APCs 5341 and 5361 is the best option at this time. We
note that we review our claims data on an annual basis to establish the
OPPS payment rates. We will reevaluate the APC assignments for the
eight separately payable codes once we have claims data. The list below
provides the various recommendations on the APC reassignments and our
concerns associated with each suggestion.
Suggestion #1: Assign the new CPT codes to APCs based on procedure
complexity considering the length of the hernia, recurrence, and
whether the hernia is incarcerated/strangulated.
CMS Concern: The predecessor codes, on which we have claims data,
do not describe the length of the hernia. This description only applies
to the new codes.
Suggestion #2: Assign the new CPT codes to APCs based on length of
hernia.
CMS Concern: The predecessor codes, on which we have claims data,
do not describe the length of the hernia. This description only applies
to the new codes.
Suggestion #3: Reassign the new codes to APC 5361 (Level 1
Laparoscopy and Related Services).
CMS Concern: As stated previously, the predecessor codes are not a
one-to-one match to the new CPT codes, and many of the predecessor
codes on which we have claims data are not laparoscopy-related.
However, based on input from our medical advisors, we are reassigning
some of the new codes to APC 5361 from APC 5341, specifically, CPT
codes 49592, 49594, and 49614. We note that several of the new codes
describe various approaches of the procedure, specifically, they are
described as open, laparoscopic, and robotic. Because the new codes are
not an exact replacement for the predecessor codes, we believe that we
should acquire claims data for the rest of new codes before assigning
all eight codes to APC 5361. Once we have claims data, we will
determine whether the codes should be reassigned to more appropriate
APCs, or whether the establishment of new APCs is necessary.
Suggestion #4: Reassign the new codes to APC 5361 (Level 1
Laparoscopy and Related Services) and APC 5362 (Level 2 Laparoscopy and
Related Services).
CMS Concern: As stated above, the predecessor codes are not a one-
to-one match to the new CPT codes, and many of predecessor codes on
which we have claims data are not laparoscopy-related. The new codes
describe various approaches of the procedure, specifically, they are
described as open, laparoscopic, and robotic. Because the new codes are
not an exact replacement for the predecessor codes, we do not believe
that assigning the new codes to these two APCs would be appropriate. We
want to pay accurately for the new codes; however, we believe that we
should acquire claims data for the new codes before assigning them to
APCs 5361 and 5362. Once we have claims data, we will determine whether
the codes should be reassigned to more appropriate APCs, or whether the
establishment of new APCs is necessary.
Suggestion #5: Establish a new APC.
CMS Concern: While we have claims data for several codes, the
predecessor codes are not a one-to-one match to the new CPT codes. To
ensure that we pay accurately for these new codes, we
[[Page 71838]]
believe that we should acquire claims data before establishing a new
APC.
Suggestion #6: Reassign the new codes to New Technology APC 1566.
CMS Concern: We do not believe this would be appropriate given that
several of the predecessor codes have been in existence since 1984, and
we have many years' of claims data for them.
With respect to the concern of beneficiary access, we believe that
assignment of the new codes to APCs 5341 and 5361 appropriately
provides access to the abdominal hernia repair procedures. In light of
the various suggestions on the APC reassignment and because there is
not a one-to-one match between the predecessor codes and the new codes,
we believe that assignment to APCs 5341 and 5361 is the best approach
at this time. We reiterate that we view our claims data on an annual
basis to establish the OPPS payment rates. Once we have data, we will
reevaluate and, if necessary, reassign the codes to appropriate APCs
based on the latest claims data.
After carefully considering all of the comments that we received,
we are finalizing our proposal with modification. Specifically, we are
finalizing our proposal to assign CPT codes 49591, 49593, 49595, 49613,
and 49615 to APC 5341, and assigning CPT codes 49592, 49594, and 49614
to APC 5361. In addition, we are finalizing our proposal for CPT codes
49596, 49616-49618, and 49621-49622, and assigning them to status
indicator ``C'' to indicate that the codes are designated as
``inpatient-only'' status for CY 2023. Further, we are finalizing our
proposal for CPT code 49623 and assigning the code to status indicator
``N'' for CY 2023 to indicate that the code is packaged since it is an
add-on service to the primary code, and its payment is included in the
primary service code. Refer to Table 35 for the final APC and SI
assignments for the abdominal hernia repair codes for CY 2023. The
final payment rates for the codes can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR23NO22.048
[[Page 71839]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.049
[[Page 71840]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.050
BILLING CODE 4120-01-C
2. Administration of Lacrimal Ophthalmic Insert Into Lacrimal
Canaliculus (APC 5503)
Dextenza, which is described by HCPCS code J1096 (Dexamethasone,
lacrimal ophthalmic insert, 0.1 mg), is a drug indicated for ``the
treatment of ocular inflammation and pain following ophthalmic
surgery'' and for ``the treatment of ocular itching associated with
allergic conjunctivitis.'' \13\ Interested parties previously asserted
that this drug is administered and described by CPT code 0356T
(Insertion of drug-eluting implant (including punctal dilation and
implant removal when performed) into lacrimal canaliculus, each).
Interested parties also previously stated that Dextenza is inserted in
a natural opening in the eyelid (called the punctum) and that the drug
is designed to deliver a tapered dose of dexamethasone to the ocular
surface for up to 30 days. CPT code 0356T was deleted December 31,
2021, and replaced with CPT code 68841 (Insertion of drug-eluting
implant, including punctal dilation when performed, into lacrimal
canaliculus, each), effective January 1, 2022.
---------------------------------------------------------------------------
\13\ Dextenza. FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf.
---------------------------------------------------------------------------
For CY 2022, HCPCS code J1096 is assigned to APC 9308 (Dexametha
opth insert 0.1 mg) with a status indicator of ``G'' (Pass-Through
Drugs and Biologicals) to indicate that the drug has pass-through
status under the OPPS. Refer to section V.A.5. of this final rule with
comment period for further information regarding the pass-through
status of HCPCS code J1096.
In addition, as discussed in the CY 2022 OPPS/ASC final rule with
comment period (86 FR 63544 through 63546), because of the clinical
similarity between the predecessor CPT code 0356T and its replacement
code, specifically, CPT code 68841, we proposed to assign CPT code
68841 to the same APC, status indicator, and payment indicator
assignments as CPT code 0356T. In the CY 2022 OPPS/ASC final rule,
after taking into consideration commenter feedback, we finalized our
proposal to assign CPT code 68841 to APC 5694 (Level 4 Drug
Administration) with OPPS status indicator ``Q1'' for CY 2022. We note
that CPT code 68841 was assigned to status indicator ``Q1'', indicating
conditionally packaged payment under the OPPS. Packaged payment applies
if a code assigned to status indicator ``Q1'' is billed on the same
claim as a HCPCS code assigned status indicator ``S'', ``T'', or ``V''.
Based on the OPPS status indicator assignment, CPT code 68841 was
assigned to payment indicator ``N1'' in the ASC setting, meaning a
packaged service/item.
For CY 2023, as indicated in Table 39 (Drugs and Biologicals for
Which Pass-through Payment Status or Separate Payment to Mimic Pass-
through Payment Will End on December 31, 2022) of the CY 2023 OPPS/ASC
proposed rule (87 FR 44628 and 44629), separate payment to mimic pass-
through status for Dextenza is expiring December 31, 2022. In addition,
as discussed in the CY 2023 OPPS/ASC
[[Page 71841]]
proposed rule (87 FR 44720), we proposed that HCPCS code J1096 is a
drug that functions as a surgical supply that meets the criteria
described at Sec. 416.174, and we proposed to make separate payment
for Dextenza as a non-opioid pain management drug that functions as a
supply in a surgical procedure under the ASC payment system for CY
2023. This means that, effective January 1, 2023, payment for Dextenza
will be packaged when furnished in the HOPD but paid separately when
furnished in an ASC. We proposed to package HCPCS code J1096 under the
OPPS and assign the code to a status indicator of ``N'' (packaged).
This is consistent with our packaging policy outlined at 42 CFR
419.2(b), which lists the types of items and services for which payment
is packaged under the OPPS. Specifically, Sec. 419.2(b)(16) includes
drugs and biologicals that function as supplies when used in a surgical
procedure as packaged costs. Historically, we have stated that we
consider all items related to the surgical outcome and provided during
the hospital stay in which the surgery is performed, including
postsurgical pain management drugs, to be part of the surgery for
purposes of our drug and biological surgical supply packaging policy
(79 FR 66875).
Although we have no data for CPT code 68841 because it is a new
code effective January 1, 2022, we have claims data for the predecessor
CPT code 0356T. Using cost data for the predecessor code, for CY 2023
we proposed to continue to assign CPT code 68841 to APC 5694 with a
proposed payment rate of $338.58. We also proposed to continue to
assign CPT code 68841 OPPS status indicator ``Q1'' and an ASC payment
indicator of ``N1.''
The issue of payment of CPT code 68841 was brought to the Advisory
Panel on Hospital Outpatient Payment (also known as HOP Panel) in 2022
for CY 2023 rulemaking and interested parties requested a new APC
placement. At the August 22, 2022 meeting, based on the information
presented, the Panel recommended that CMS assign CPT code 68841 to APC
5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures), with a
status indicator (SI) of ``J1''. We note that for CY 2023, APC 5503 has
a proposed payment rate of $2,140.55.
Comment: Several commenters stated that increased payment, and
separate payment, for CPT code 68841 was required in order to ensure
continued beneficiary access to the drug Dextenza (HCPCS code J1096) in
both the HOPD and ASC settings. Some commenters did not make a specific
suggestion as to the final APC assignment, but contended that the
proposed payment was inadequate. Commenters most frequently recommended
assignment to APC 5503 for CPT code 68841. Interested parties believed
this would be a clinically appropriate APC assignment as, in their
view, the insertion of Dextenza is an extraocular procedure; therefore,
it would be appropriate to place CPT code 68841 into APC 5503, which is
titled Level 3 Extraocular, Repair, and Plastic Eye Procedures, as this
procedure is clinically similar to other extraocular procedures in that
APC. Commenters believe this assignment is appropriate given the
geometric mean cost for the predecessor CPT code 0356T was $2,227.06 in
the proposed rule, which was similar to the proposed rule geometric
mean cost of $2,159.58 for APC 5503. Commenters also believed that CMS
should assign CPT code 68841 to the same APC as CPT codes 0699T and
66030 because all three procedures involve the delivery of medication
to the eye. The commenters cited CPT code 66030 (Injection, anterior
chamber of eye (separate procedure); medication) and CPT code 0699T
(Injection, posterior chamber of eye; medication), which we proposed to
assign to APC 5491 (Level 1 Intraocular Procedures) with a proposed
payment rate of $2,201.12, as similar procedures to which CPT code
68841 should be compared. However, commenters recognized that CPT codes
0699T and 66030 were intraocular procedures, so it would not be
appropriate to assign CPT code 68841 to the same APC. Since commenters
recognized CPT code 68841 represented an extraocular procedure, they
felt APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye Procedures)
would be an appropriate alternative APC assignment as this APC
placement has a comparable payment rate to APC 5491. Some commenters
stated that a ``Q1'' status indicator was inappropriate, but did not
provide an alternative suggestion. However, some other commenters
suggested assignment to a ``J1'' status indicator.
Several commenters pointed to the clinical importance of providing
Dextenza to patients, noting that it reduces ocular pain, inflammation,
and reduces the burden of topical eyedrop application. Additionally,
commenters stated that they usually perform the procedure to administer
Dextenza in conjunction with ophthalmic surgeries. Commenters believed
the procedure is a distinct surgical procedure that requires additional
operating room time and resources. Commenters were concerned that the
lack of increased or separate payment may reduce access to Dextenza,
particularly in the ASC setting.
Response: We thank commenters for their feedback. Based on input
from stakeholders, we believe it is appropriate to assign CPT code
68841 to a different APC than the one proposed for CY 2023. After
careful consideration of the statements from the commenters, we
analyzed available claims data and similar procedures that approximate
the clinical resources associated with CPT code 68841. We agree with
stakeholders and the HOP Panel that CPT code 68841 should be reassigned
to APC 5503. For the CY 2023 OPPS update, based on claims submitted
between January 1, 2021, and December 30, 2021, processed through June
30, 2022, our analysis of the latest claims data for this final rule
with comment period show a geometric mean cost of approximately $2,079
for predecessor CPT code 0356T based on 122 single claims, which is
comparable to the geometric mean cost of about $2,174 for APC 5503.
Based on the data, we believe that a reassignment from to APC 5503 for
CPT code 68841 is appropriate.
However, we continue to believe that assignment of CPT code 68841
to an OPPS status indicator of ``Q1'' and an associated ASC payment
indicator of ``N1'', is appropriate. We continue to believe that CPT
code 68841 is mostly performed during ophthalmic surgeries, such as
cataract surgeries. A status indicator ``Q1'', indicating 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. Although stakeholders state this is an independent surgical
procedure and should not be packaged into the primary ophthalmic
procedure in which the drug and drug administration are associated,
based on expected clinical patterns as to how the drug is used, we do
not agree. We find it appropriate to conditionally package CPT code
68841 under the OPPS based on its clinical use patterns. This is
consistent with 42 CFR 419.2(b), which lists the types of items and
services for which payment is packaged under the OPPS packaged. The
conditional packaging of this code supports our overarching goal to
make payments for all services paid under the OPPS and ASC payment
system more
[[Page 71842]]
consistent with those of a prospective payment system and less like
those of a per-service fee schedule. We believe that packaging
encourages efficiency and is an essential component of a prospective
payment system, and that packaging payments for items and services that
are typically integral, ancillary, supportive, dependent, or adjunctive
to a primary service is a fundamental part of the OPPS. We therefore
believe packaging of CPT code 68841 is appropriate. After consideration
of the public comments, we are finalizing our proposal with
modification and reassigning CPT code 68841 from APC 5694 to APC 5503
with OPPS status indicator ``Q1'' (STV-Packaged Codes) for CY 2023. In
addition, based on the OPPS assignments, we are finalizing an ASC
payment indicator of ``N1'' (Packaged service/item; no separate payment
made) for CPT code 68841 for CY 2023. For the final CY 2023 OPPS
payment rates, we refer readers to OPPS Addendum B to this final rule
with comment period. In addition, we refer readers to OPPS Addendum D1
to this final rule with comment period for the status indicator
definitions for all codes reported under the OPPS. For the final CY
2023 ASC payment rates and payment indicators, we refer readers to
Addendum AA and Addendum BB for the ASC payment rates, and Addendum DD1
for the ASC payment indicator and their definitions. The OPPS Addendum
B and D1, and ASC Addendum AA, BB, and DD1 are available via the
internet on the CMS website.\14\
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Refer to Table 36 for the code descriptor, APC assignment, status
indicator assignment, and payment indicator assignment for CPT code
68841 for CY 2023.
[GRAPHIC] [TIFF OMITTED] TR23NO22.051
Similarly, we are finalizing our proposal, without modification, to
change HCPCS code J1096 from a status indicator of ``G'' (pass-through)
to ``N'' (packaged) to indicate that Dextenza is packaged beginning
January 1, 2023, as separate payment provision to mimic pass-through
status will end on December 31, 2022. We find it appropriate to package
HCPCS code J1096 based on its clinical use patterns. Consistent with
our clinical review and commenters' input, we believe this drug is
mostly performed during ophthalmic surgeries, such as cataract
surgeries. The packaging of this drug is consistent with 42 CFR
419.2(b). Specifically, 42 CFR 419.2(b)(16) includes drugs and
biologicals that function as supplies when used in a surgical procedure
among the items and services for which payment is packaged under the
OPPS. Historically, we have stated that we consider all items related
to the surgical outcome and provided during the hospital stay in which
the surgery is performed, including postsurgical pain management drugs,
to be part of the surgery for purposes of our drug and biological
surgical supply packaging policy (79 FR 66875). The packaging of this
code supports our overarching goal to make payments for all services
paid under the OPPS and ASC payment system more consistent with those
of a prospective payment system and less like those of a per-service
fee schedule. We believe that packaging encourages efficiency and is an
essential component of a prospective payment system and that packaging
payments for items and services that are typically integral, ancillary,
supportive, dependent, or adjunctive to a primary service is a
fundamental part of the OPPS. We therefore believe packaging of HCPCS
code J1096 is appropriate in the HOPD setting for CY 2023.
Although packaged under the OPPS, as discussed in section XIII.E
(ASC Payment System Policy for Non-Opioid Pain Management Drugs and
Biologicals that Function as Surgical Supplies) of this final rule with
comment period, we believe Dextenza (HCPCS code J1096), meets the
criteria described at Sec. 416.174; and we are finalizing our proposal
to make separate payment for Dextenza as a non-opioid pain management
drug that functions as a supply in a surgical procedure under the ASC
payment system for CY 2023. For more information on the ASC payment for
HCPCS code J1096 for CY 2023, refer to section XIII.E (ASC Payment
System Policy for Non-Opioid Pain Management Drugs and Biologicals that
Function as Surgical Supplies) of this final rule with comment period.
As a reminder, for OPPS billing, because charges related to
packaged services are used for outlier and future rate setting,
hospitals are advised to report both CPT code 68841 (administration
service) and HCPCS code J1096 (Dextenza drug/product) on the claim
whenever Dextenza is provided in the HOPD setting. It is extremely
important that hospitals report all HCPCS codes consistent with their
descriptors, CPT and/or CMS instructions and correct coding principles,
and all charges for all services they furnish, whether payment for the
services is made separately or is packaged.
Finally, for the final CY 2023 OPPS payment rates, we refer readers
to OPPS Addendum B to this final rule with comment period. In addition,
we refer readers to OPPS Addendum D1 to this final rule with comment
period for the status indicator definitions for all codes reported
under the OPPS. For the final
[[Page 71843]]
CY 2023 ASC payment rates and payment indicators, we refer readers to
Addendum AA and Addendum BB for the ASC payment rates, and Addendum DD1
for the ASC payment indicator and their definitions. The OPPS Addendum
B and D1, and ASC Addendum AA, BB, and DD1 are available via the
internet on the CMS website.\15\
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3. Artificial Iris Insertion Procedures (APC 5495)
For the July 2020 update, the AMA's CPT Editorial Panel established
three CPT codes to describe the CUSTOMFLEX[supreg] ARTIFICIALIRIS
device implantation procedure. The long descriptors for the codes are
listed below.
0616T: Insertion of iris prosthesis, including suture
fixation and repair or removal of iris, when performed; without removal
of crystalline lens or intraocular lens, without insertion of
intraocular lens
0617T: Insertion of iris prosthesis, including suture
fixation and repair or removal of iris, when performed; with removal of
crystalline lens and insertion of intraocular lens
0618T: Insertion of iris prosthesis, including suture
fixation and repair or removal of iris, when performed; with secondary
intraocular lens placement or intraocular lens exchange
In addition to the surgical procedure CPT codes, as discussed in
the CY 2021 OPPS/ASC final rule with comment period (85 FR 85990
through 85992), we approved the associated device, specifically, the
CUSTOMFLEX[supreg] ARTIFICIALIRIS for pass-through status effective
January 1, 2021, and established a new device category for this
device--HCPCS code C1839 (Iris prosthesis). The designation of pass-
through status for the device indicates that, under the OPPS, the
device is paid separately in addition to the surgical procedure CPT
codes. Based on our assessment, we assigned CPT code 0616T to APC 5491
(Level 1 Intraocular Procedures) because, after removing the device
costs of the CUSTOMFLEX[supreg] ARTIFICIALIRIS for transitional pass-
through device status, we believed the insertion of the artificial iris
procedure shared similar clinical characteristics and resource costs to
the surgical procedures assigned to APC 5491. Similarly, we assigned
CPT codes 0617T and 0618T to APC 5492 (Level 2 Intraocular Procedures)
because, with the additional implantation of the intraocular lens, we
believed CPT codes 0617T and 0618T shared similar clinical
characteristics and resource costs to the surgical procedures assigned
to APC 5492.
For CY 2023, with the expiration of the pass-through device status
for the CUSTOMFLEX[supreg] ARTIFICIALIRIS on January 1, 2023, and under
our current packaging policies, we proposed to package the device cost
associated with HCPCS code C1839 into the primary procedures,
specifically, CPT codes 0616T, 0617T, and 0618T. We review, on an
annual basis, the APC assignments for all services and items paid under
the OPPS based on our analysis of the claims data available for the
proposed rule. For the CY 2023 OPPS/ASC proposed rule, the geometric
mean cost of CPT code 0616T was $12,846.69 based on 5 single claims,
the geometric mean cost of CPT code 0617T was $17,516.70 based on the 2
claims available for the proposed rule, and the geometric mean cost of
CPT code 0618T was $13,257.21 based on 7 claims. With the additional
costs from the expired pass-through device, we proposed to reassign CPT
codes 0617T and 0618T from APC 5492 to APC 5495 (Level 5 Intraocular
APC), which is a Low Volume APC and is discussed in further detail in
section III.D of this final rule with comment period, with a proposed
payment amount of $16,564.54. For CPT code 0616T, with the additional
costs from the expired pass-through device, we proposed to reassign CPT
code 0616T from APC 5491 to APC 5493 (Level 3 Intraocular Procedures)
with a proposed payment rate $7,434.16.
Comment: Commenters supported our proposed APC assignment of CPT
codes 0617T and 0618T to APC 5495 but disagreed with our proposed
assignment of CPT code 0616T to APC 5493 because of the proposed
payment rate for that APC. Commenters believed that the proposed
payment amount of $7,434.16 for CPT code 0616T would be significantly
lower than the procedure's cost and would not adequately cover the cost
of the artificial iris device. The commenters recommended that CPT code
0616T be assigned to APC 5495 with a proposed payment rate of
$16,564.54 for CY 2023, rather than APC 5493, as the commenters
believed the clinical characteristics and resource costs of CPT code
0616T are more similar to CPT codes 0617T and 0618T, which we proposed
to assign to APC 5495.
Response: We appreciate the commenters' recommendation and support
of our proposal. For this final rule with comment period, based on
claims submitted between January 1, 2021, and December 31, 2021, and
processed through June 30, 2022, we have 6 claims for CPT code 0616T
that yield a geometric mean cost of $14,151.11. Based on our assessment
of the updated data, we do not believe a final payment rate of
$7,217.54 for APC 5493 would adequately cover the costs associated with
CPT code 0616T. Similar to the Level 5 Intraocular Procedures APC, APC
5494 (Level 4 Intraocular Procedures) is a Low Volume APC. The only
procedure assigned to APC 5494 is CPT code 67027 (Implantation of
intravitreal drug delivery system (e.g., ganciclovir implant), includes
concomitant removal of vitreous). Therefore, given the clinical
similarity of the procedures assigned to APC 5495 when compared to APC
5494 as well as the resource use similarity, we are accepting the
commenters' recommendation and reassigning CPT code 0616T to APC 5495
for CY 2023. After reassigning CPT code 0616T to Low Volume APC 5495,
as discussed in further detail in section III.D. of this final rule
with comment period, the APC cost of APC 5495 is $18,602.90 and a final
payment amount of $18,089.98 for CY 2023.
In summary, after consideration of the public comments, we are
finalizing our proposal, with modification, and assigning CPT codes
0616T, 0617T, and 0618T to APC 5495 for CY 2023. The final CY 2023 OPPS
payment rate for the code can be found in Addendum B to this final rule
with comment period. In addition, we refer readers to Addendum D1 of
this final rule with comment period for the status indicator (SI)
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
4. Blood Product Not Otherwise Classified (NOC) (APC 9537)
Providers and interested parties in the blood products field have
reported that product development for new blood products has
accelerated. They noted there may be several additional new blood
products entering the market in the next few years, compared to only
one or two new products entering the market over the previous 15 to 20
years. To encourage providers to use these new products, providers and
interested parties requested that we establish a new HCPCS code to
allow for payment for unclassified blood products prior to these
products receiving their own HCPCS codes. Under the OPPS, unclassified
procedures are generally assigned to the lowest APC payment level of an
APC family. However, because blood products are each assigned to their
own unique APC, the
[[Page 71844]]
concept of a lowest APC payment level does not exist for blood
products.
Starting in CY 2020, we established a new HCPCS code, P9099 (Blood
component or product not otherwise classified), which allows providers
to report unclassified blood products. For a detailed discussion of the
payment history of HCPCS P9099 from CY 2020 through CY 2022, please
refer to the CY 2022 OPPS/ASC rule with comment period (86 FR 63546
through 63548).
For CY 2023, we proposed to assign HCPCS code P9099 to APC 9537
(Blood component/product noc) with a proposed payment rate of $56.58.
In addition, we proposed to continue our policy of setting a payment
rate for HCPCS code P9099 that is equivalent to the lowest cost blood
product that is separately payable in the OPPS. The separately payable
blood product with the lowest cost at the time of publication of the
proposed rule was HCPCS code P9060 (Fresh frozen plasma, donor
retested, each unit), with a proposed payment rate of $56.58.
Therefore, for CY 2023, we proposed that the payment rate for HCPCS
code P9099 would be $56.58, equivalent to the payment rate for HCPCS
code P9060.
Comment: Multiple commenters have requested that unclassified blood
products assigned to HCPCS code P9099 be paid based on reasonable cost
and that HCPCS code P9099 be assigned a status indicator of ``F'' (paid
at reasonable cost). Unclassified blood products paid on the basis of
reasonable cost would receive payment based on individual invoices
submitted by the provider that detail the actual cost of the
unclassified blood products for the provider. The commenters believe
our current policy severely underpays for most unclassified blood
products, which limits the ability of providers to use these new
products and discourages innovation in the blood products field.
Commenters assert that the universe of blood products is very
heterogeneous with each product having its own APC and payment rate,
and our policy that assigns unclassified clinical services HCPCS codes
to the lowest-paying APC in a clinical series is not appropriate for
the payment of blood products.
Response: We have concerns about paying unclassified blood products
using reasonable cost and assigning HCPCS code P9099 to status
indicator ``F''. Although reasonable cost would likely provide a more
granular reflection of the cost of unclassified blood products to
providers, there would be no incentive for providers to manage their
costs when using unclassified blood products or for the manufacturers
to seek individual HCPCS codes for their unclassified blood products.
We believe that providers will prefer to receive full cost
reimbursement for an unclassified blood product rather than risk
receiving a prospective payment that could be less than full cost of
the blood product if the blood product is classified and assigned a
HCPCS code. Finally, we do not support reasonable cost payment for
HCPCS code P9099 because the OPPS is a prospective payment system, and
we want to limit rather than expand the types of services paid for
under the OPPS that do not receive prospective payment.
Comment: Two commenters supported a different approach to ensure
that newly developed blood products can receive payment comparable to
the cost of the product until a permanent HCPCS code can be established
to describe the new blood products. One of the commenters stated that
there is a four to six-month period between the time a new blood
product receives FDA approval and clearance and when it is introduced
into the market. The commenter suggested that we could evaluate a
coding application for a new blood product during this period before
the new blood product enters the market and establish a temporary HCPCS
code that would allow the blood product to be payable in both the OPPS
and the PFS payment systems. Along with establishing the temporary
HCPCS code, the commenter also requests that we establish a payment
rate that would be cross-walked to the payment rate of an existing
blood product with similar characteristics to the new blood product.
The temporary HCPCS code would stay in effect until a permanent HCPCS
code is established for the new blood product.
Response: We agree that the process suggested by the commenters is
a reasonable approach to ensure new blood products receive payment that
better reflects the cost of the product. We previously used this
process around 2015 when products, including frozen, pathogen-reduced
plasma and pathogen-reduced platelets, were new and required HCPCS
codes to receive payment. We currently have the ability to create
temporary HCPCS codes for blood products to allow the codes to be used
in both the OPPS and the PFS payment systems, and we can assign payment
rates that reasonably reflect the cost of the new blood products.
After consideration of the public comments, we are finalizing our
proposal without modification. Specifically, we will continue to assign
HCPCS code P9099 to status indicator ``R'' (Blood and Blood Products.
Paid under OPPS; separate APC payment.) and pay the code at a rate
equal to the lowest paid separately payable blood product in the OPPS
that has claims data for CY 2021, which is HCPCS code P9060 with an
updated payment rate of $54.74 per unit. Therefore, we are finalizing
our proposal, without modification, to continue to assign HCPCS code
P9099 to APC 9537 (Blood component/product noc) for CY 2023.
5. Bone Density Tests/Bone Mass Measurement: Biomechanical Computed
Tomography (BCT) Analysis and Digital X-ray Radiogrammetry-Bone Mineral
Density (DXR-BMD) Analysis
A bone mineral density test is used to predict fracture risk and
detect osteoporosis based on the patient's bone mineral content and
bone density of the spine, hip, lower arm, and hands. While the test is
performed using x-rays, dual-energy X-ray absorptiometry (DEXA or DXA),
and computed tomography (CT), recent advances in technology have
introduced newer methods in detecting bone mineral density. These newer
technologies have included the use of biomechanical computed tomography
(BCT) analysis and digital x-ray radiogrammetry-bone mineral density
(DXR-BMD) analysis. A BCT analysis involves the use of a previous CT
scan that is used by a computer software program to measure both the
bone strength and bone mineral density of the hip or spine region,
while a DXR-BMD analysis involves the use of a digital x-ray, that is
also used by a computer software, to measure bone mineral density of
the hand.
For CY 2023, the CPT Editorial Panel established one new CPT code,
specifically, CPT code 0743T to describe the service associated with
BCT analysis with concurrent vertebral fracture assessment (VFA),
effective January 1, 2023. Because the final CY 2023 CPT code number
was not available when we published the proposed rule, the code was
listed as placeholder code X012T in OPPS Addendum B of the CY 2023
OPPS/ASC proposed rule. Below is the complete long descriptor for CPT
code 0743T.
0743T: Bone strength and fracture risk using finite
element analysis of functional data and bone mineral density, with
concurrent vertebral fracture assessment, utilizing data from a
computed tomography scan, retrieval and transmission of the scan data,
measurement of bone strength and bone mineral density and
classification of any vertebral fractures, with overall fracture risk
assessment, interpretation and report
[[Page 71845]]
In addition to new CPT code 0743T, there are five existing CPT
codes describing BCT analysis that were effective July 1, 2019. The
codes and their long descriptors are listed below.
0554T: Bone strength and fracture risk using finite
element analysis of functional data and bone-mineral density utilizing
data from a computed tomography scan; retrieval and transmission of the
scan data, assessment of bone strength and fracture risk and bone-
mineral density, interpretation and report
0555T: Bone strength and fracture risk using finite
element analysis of functional data and bone-mineral density utilizing
data from a computed tomography scan; retrieval and transmission of the
scan data
0556T: Bone strength and fracture risk using finite
element analysis of functional data and bone-mineral density utilizing
data from a computed tomography scan; assessment of bone strength and
fracture risk and bone-mineral density.
0557T: Bone strength and fracture risk using finite
element analysis of functional data and bone-mineral density utilizing
data from a computed tomography scan; interpretation and report.
0558T: Computed tomography scan taken for the purpose of
biomechanical computed tomography analysis.
For CY 2023, the CPT Editorial Panel also established two new CPT
codes to describe the services associated with bone mineral density by
digital x-ray radiogrammetry, specifically, CPT codes 0749T and 0750T.
These services were listed as placeholder codes X031T and X032T in OPPS
Addendum B of the CY 2023 OPPS/ASC proposed rule:
0749T: Bone strength and fracture risk assessment using
digital X-ray radiogrammetry-bone mineral density (DXR-BMD) analysis of
bone-mineral density utilizing data from a digital X-ray, retrieval and
transmission of digital X-ray data, assessment of bone strength and
fracture risk and bone-mineral density, interpretation and report.
0750T: Bone strength and fracture risk assessment using
digital X-ray radiogrammetry-bone mineral density (DXR-BMD) analysis of
bone-mineral density utilizing data from a digital X-ray, retrieval and
transmission of digital X-ray data, assessment of bone strength and
fracture risk and bone-mineral density, interpretation and report; with
single view digital X-ray examination of the hand taken for the purpose
of DXR-BMD.
We note that the CPT code descriptors that appear in Addendum B are
short descriptors and do not accurately describe the complete
procedure, service, or item described by the CPT code. Therefore, we
included the 5-digit placeholder codes and long descriptors for the new
CY 2023 CPT codes in Addendum O to the proposed rule (which is
available via the internet on the CMS website) so that the public could
adequately comment on the proposed APCs and SI assignments. The 5-digit
placeholder codes were included in Addendum O, specifically under the
column labeled ``CY 2023 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder
Code,'' to the proposed rule. We further stated in the proposed rule
that the final CPT code numbers would be included in this CY 2023 OPPS/
ASC final rule with comment period.
On June 24, 1998, we published in the Federal Register an interim
final rule (IFR) with comment period (63 FR 34320) that specifies the
uniform coverage of, and payment for, bone mass measurements for
Medicare beneficiaries. This IFR implemented the provisions in section
4106(a) of the Balanced Budget Act of 1997. Currently, Medicare pays
for bone density tests when they meet the definition and coverage
requirements of bone mass measurement as stated in 42 CFR 410.31. Bone
mass measurement means a radiologic, radioisotopic, or other procedure
that meets all of the following conditions:
Is performed to identify bone mass, detect bone loss, or
determine bone quality.
Is performed with either a bone densitometer (other than
single-photon or dual-photon absorptiometry) or a bone sonometer system
that has been cleared for marketing for bone mass measurement (BMM) by
the Food and Drug Administration (FDA) under 21 CFR part 807, or
approved for marketing under 21 CFR part 814.
Includes a physician's interpretation of the results.
Based on our understanding of the services associated with the new
codes, BCT and DXR-BMD analysis currently do not meet Medicare's
definition of bone mass measurement. Therefore, for CY 2023, we
proposed to assign the new codes, specifically, CPT codes 0743T, 0749T,
and 0750T, to status indicator ``E1'' to indicate that they are not
covered by Medicare, and not paid by Medicare when submitted on
outpatient claims (any outpatient bill type). Similarly, we proposed to
assign the existing BCT analysis CPT codes 0554T-0558T to status
indicator ``E1'' for CY 2023.
Comment: Some commenters disagreed with our proposed status
indicator assignment of ``E1'' for the BCT analysis codes,
specifically, CPT codes 0554T-0558T, and requested that we continue to
pay separately for them. Another commenter stated that the VirtuOst
software system that is associated with new CPT code 0743T, is an FDA-
cleared Class II bone densitometer medical device. The same commenter
stated that BCT analysis of the hip is equivalent to that of DXA (CPT
code 77080) while BCT analysis of the spine is similar to that of a
qualitative diagnostic CT (CPT code 77078) for osteoporosis
identification. Because CPT codes 77078 and 77080 are paid separately
under the OPPS, the commenter suggested that the BCT analysis CPT codes
should also be paid separately.
Response: As stated above, based on our review and understanding of
the service, BCT analysis does not meet Medicare's definition of bone
mass measurement, as specified in Sec. 410.31(a) that specifies the
coverage of, and payment for, bone mass measurements for Medicare
beneficiaries. Consequently, for the October 2022 OPPS Update
(Transmittal 11594, Change Request 12885, dated September 9, 2022), we
revised the status indicator for CPT codes 0554T-0558T to ``E1'' to
indicate that the codes are non-covered because the services described
by the codes do not meet Medicare's definition of bone mass
measurements (BMMs). As we have stated in every quarterly OPPS Update
Change Request (CR), ``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 it is reasonable and
necessary to treat the beneficiary's condition and whether it is
excluded from payment.''
In addition, we remind the commenters that requests for changes to
the current BMM definition should be directed to CMS as described in
Sec. 410.31(f). CMS may determine through the NCD process that
additional BMM systems are reasonable and necessary under section
1862(a)(1) of the Act for monitoring and confirming baseline BMMs. We
note that on August 7, 2013, CMS published a Federal Register notice
(78 FR 48164 through 48169), updating the process used for opening,
deciding or reconsidering national coverage determinations (NCDs).
Further information on the Medicare
[[Page 71846]]
coverage determination process, as well how to request a new NCD or
revision to an existing NCD, can be found on Medicare's website,
specifically, at https://www.cms.gov/Medicare/Coverage/DeterminationProcess.
In summary, after consideration of the public comments, we are
finalizing our proposal, and assigning status indicator ``E1'' to the
BCT analysis CPT codes 0554T-0558T and 0743T for CY 2023. In addition,
we received no comments on the codes for DXR-BMD analysis and are
finalizing our proposal to assign status indicator ``E1'' to CPT codes
0748T and 0749T for CY 2023. We note that in the OPPS Addendum B that
was released with the CY 2023 OPPS/ASC proposed rule, we inadvertently
listed CPT code 0743T (placeholder code X012T) to status indicator
``M'' (Items and Services Not Billable to the MAC. Not paid under
OPPS.) when it should have been listed with status indicator ``E1''
(Not covered; Not paid by Medicare when submitted on outpatient claims
(any outpatient bill type), similar to the status indicator proposed
for CPT codes 0749T (placeholder code X031T) and 0750T (placeholder
code X032T).
Finally, we remind hospitals that Medicare does pay separately for
certain BMM tests under the OPPS. Refer to the Medicare Administrative
Contractors (MACs) website for the latest list of covered and payable
BMM HCPCS codes. The final CY 2023 payment rates for all codes reported
under the OPPS can be found in OPPS Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with for the complete list of status indicators (and
definitions) used under the OPPS. Both Addendum B and D1 are available
via the internet on the CMS website.
6. Calculus Aspiration With Lithotripsy Procedure (APC 5376)
For CY 2023, we proposed to continue to assign HCPCS code C9761 to
APC 5376 (Level 6 Urology and Related Services) with a proposed payment
rate of $8,711.09. The code was effective October 1, 2020, and
describes the procedure that uses a sterile, single-use aspiration-
irrigation catheter that is designed to assist in the removal of stone
fragments during a standard ureteroscopy.
Comment: One commenter urged CMS to maintain the current facility
payment rates in both the hospital outpatient department and ambulatory
surgery center setting. The commenter noted that the current payment in
both sites of service is appropriate given the procedural complexity
involved and stated that performing a steerable renal suction case
requires extended operating room (OR) time, multiple technicians, and a
full inventory of single-use surgical devices, such as endoscopes,
ureteral access sheaths, guidewires, CVAC, and high-energy laser
fibers.
Response: HCPCS code C9761 was new in CY 2020, and this is the
first year in which we have actual claims data for the procedure. Based
on our analysis of the latest CY 2021 claims data available for CY 2023
OPPS ratesetting, the geometric mean cost associated with HCPCS code
C9761 is approximately $6,519 based on 24 single claims (out of 24
total claims), which is consistent with the geometric mean cost for APC
5376. We also note that the geometric mean cost for the significant
HCPCS codes in APC 5375 (Level 5 Urology and Related Services) ranged
between $4,105 and $6,495, which is below the geometric mean cost for
HCPCS code C9761. Based on the data, we believe that APC 5376 is the
more appropriate assignment rather than APC 5375 for HCPCS code C9761.
Therefore, we agree with the commenter, and are maintaining the APC
assignment to APC 5376 for CY 2023.
Comment: Another commenter made a request to update the long
descriptor for HCPCS code C9761 to reduce provider confusion and
preserve device cost data integrity. The current long descriptors for
CPT code 52356 and HCPCS code C9761 are listed in Table 37. According
to the commenter, the 21 facilities in the 2021 claims data that billed
procedures with HCPCS code C9761, despite not using a steerable vacuum
aspiration catheter, likely did so because of the similarity between
the long descriptors for HCPCS code C9761 and CPT code 52356. The
commenter explained that the procedure described by HCPCS code C9761
includes all the steps of a conventional laser lithotripsy (CPT code
52356) plus a comprehensive removal of stone fragments from all areas
of the collecting system, including the renal pelvis and all calyces.
Table 37 lists the CY 2022 long descriptors for these codes.
[GRAPHIC] [TIFF OMITTED] TR23NO22.052
To alleviate confusion, the commenter recommended a change in the
long descriptor for HCPCS code C9761 to the following: ``Steerable
vacuum aspiration with continuous irrigation of the kidney following
cystourethroscopy, with ureteroscopy and/or pyeloscopy, with
lithotripsy, including the renal pelvis and all calyces of the
collecting system, ureter, bladder, and urethra if applicable.'' The
commenter stated that the suggested revised long descriptor for C9761
moves the device intensive and distinguishing features of the procedure
(i.e., ``Steerable vacuum aspiration with continuous irrigation of the
kidney'') to the beginning and more fully describes the complexity of
the procedure by
[[Page 71847]]
calling out the aspiration of the renal pelvis and all calyces.
Response: We do not agree that revising the long descriptor as
recommended by the commenter is necessary to provide further
clarification on how the procedure is performed. As listed in Table 37,
the long descriptors for CPT code 52356 and HCPCS code C9761 do not
share substantial similarity. The words ``steerable vacuum aspiration''
appear in the current long descriptor for HCPCS code C9761. We note
that coders are generally aware that they need to read the entire long
descriptors, and not rely on short descriptors alone, for the codes
they are billing to ensure they are reporting the procedures, services,
and items accurately. In addition, it is generally not our policy to
judge the accuracy of provider coding and charging for purposes of
ratesetting. We rely on hospitals and providers to accurately report
the use of HCPCS codes in accordance with their code descriptors and
CPT and CMS instructions and to report services accurately on claims
and charges and costs for the services on their Medicare hospital cost
report.
Nonetheless, we are sympathetic to the commenter's concern
regarding the descriptor, and consequently, we believe that a slight
modification to the long descriptor is necessary. Specifically, we are
adding the terms ``must use a steerable ureteral catheter'' to the end
of the long descriptor for HCPCS code C9761, as shown in Table 38. The
change to the long descriptor for HCPCS C9761 will be included in the
January 2023 HCPCS file with an effective date of January 1, 2023. We
note that this is the second change to the long descriptor for HCPCS
code C9761 since the code was effective on October 1, 2020. Refer to
Table 38 for the historical and current descriptor for the code.
[GRAPHIC] [TIFF OMITTED] TR23NO22.053
In summary, after consideration of the public comments, we are
finalizing our proposal for HCPCS code C9761 and assigning the code to
APC 5376 for CY 2023. In addition, we are modifying the long descriptor
for HCPCS code C9761 to assist HOPDs with reporting the code
appropriately.
7. Cardiac Computed Tomography Angiography (CCTA) (APC 5571)
For CY 2023, we proposed to continue to assign the following
cardiac CCTA exam codes to APC 5571 (Level 1 Imaging with Contrast)
with a proposed payment rate of $183.61. The CPT codes and their long
descriptors are listed below.
75572: Computed tomography, heart, with contrast material,
for evaluation of cardiac structure and morphology (including 3d image
postprocessing, assessment of cardiac function, and evaluation of
venous structures, if performed).
75573: Computed tomography, heart, with contrast material,
for evaluation of cardiac structure and morphology in the setting of
congenital heart disease (including 3d image postprocessing, assessment
of lv cardiac function, rv structure and function and evaluation of
venous structures, if performed).
75574: Computed tomographic angiography, heart, coronary
arteries and bypass grafts (when present), with contrast material,
including 3d image postprocessing (including evaluation of cardiac
structure and morphology, assessment of cardiac function, and
evaluation of venous structures, if performed).
We received several comments related to our proposed payment for
the CCTA codes. Many of the comments, mostly form letters, addressed
the same issues that were brought to our attention in the CY 2021 OPPS/
ASC final rule (85 FR 85956 through 85959). Below is a summary of the
public comments to the CY 2023 OPPS/ASC proposed rule and our responses
to the comments.
Comment: Some commenters expressed concern with the reimbursement
and continued assignment to APC 5571 for CPT codes 75572, 75573, and
75574. They stated that the current payment is below the cost of
providing the service. Some commenters explained that numerous studies
have shown CCTA to have the highest negative predictive value for
ruling out coronary artery disease (CAD), and that for certain
patients, this is the least invasive test to rule out CAD. They stated
that the proposed payment is insufficient to cover the complete cost of
furnishing the service, and urged CMS to group the CCTA codes in an
appropriate APC with services that are
[[Page 71848]]
similar based on clinical intensity, resource utilization, and cost.
The commenters indicated that the inadequate reimbursement for the
service limits Medicare beneficiaries' access to the test. One
commenter asserted that CCTA is more complex to perform and requires
more time and resources compared to the other tests assigned to APC
5571. The commenters urged CMS to increase the payment for CCTA and
suggested revising the assignment from APC 5571 to APC 5572 to
adequately compensate hospitals for the cost of providing the service.
Response: The OPPS relies upon historical hospital claims data to
establish the annual payment rates, and payments under the OPPS are
based on our analysis of the latest available claims and cost report
data submitted to Medicare. As we stated in the CY 2021 OPPS/ASC final
rule with comment period (85 FR 85956), we have many years of claims
data for CPT codes 75572, 75573, and 75574. The AMA established
specific CPT codes for CCTA services beginning in 2006 when they were
first described by Category III codes. The Category III CPT codes were
subsequently deleted on December 31, 2009, and replaced with Category I
CPT codes 75572, 75573, and 75574, which were effective on January 1,
2010. Because OPPS payments are updated every year based on our
analysis of the latest claims data, the payment rates have varied each
year based on that data.
For CY 2023, OPPS payments are based on claims submitted between
January 1, 2021, through December 31, 2021, that were processed on or
before June 30, 2022. Based on our review of the claims data for this
final rule, the geometric mean costs for the CCTA codes range between
$160 and $238. As shown in Table 39, our analysis reveals a geometric
mean cost of approximately $160 for CPT code 75572 based on 19,245
single claims (out of 35,554 total claims), about $238 for CPT code
75573 based on 371 single claims (out of 542 total claims), and
approximately $208 for CPT code 75574 based on 46,352 single claims
(out of 68,420 total claims). Based on the geometric mean costs for the
codes, our data show that the resources associated with providing CCTA
services are similar to the costs of other tests assigned to APC 5571.
The geometric mean cost for the CCTA codes range between $160 and $238,
which are in line with the costs in APC 5571 whose more geometric mean
costs for the significant HCPCS codes range between $118 and $247.
Based on our claims data, we do not agree that the resource cost for
the services in APC 5572 are similar to CCTA because the geometric mean
costs for the significant HCPCS codes in APC 5572 are higher with costs
ranging between $279 and $523.
As shown in Table 39, we have many years' worth of claims data for
CCTA services, and the volume has only increased throughout the years.
Based on the volume of claims, we do not believe that Medicare
beneficiaries have had access issues. In addition, our current and
historical cost data for the CCTA CPT codes demonstrates that the
resources of providing CCTA exams are consistent with the cost of the
other services assigned to APC 5571. We believe our claims data
accurately reflects the resources associated with furnishing CCTA
services in the HOPD setting. Because CCTA services have been paid
under the OPPS for many years, with payments based on the latest
hospital claims and Medicare cost report data, we believe we are
providing a consistent payment methodology that appropriately reflects
the hospital costs required to perform CCTA exams.
[[Page 71849]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.054
We remind the commenters that every year since the implementation
of the OPPS on August 1, 2000, we receive many requests from specialty
associations, device manufacturers, drug manufacturers, and consultants
to increase the payments for codes associated with specific drugs,
devices, services, and surgical procedures. Under the OPPS, one of our
goals is to make payments that are appropriate for the items and
services that are necessary for the treatment of Medicare
beneficiaries. The OPPS, like other Medicare payment systems, is budget
neutral and increases are generally limited to the annual payment
update factor. As a budget neutral payment system, the OPPS does not
pay the full hospital costs of services, however, we believe that our
payment rates generally reflect the costs that are associated with
providing care to Medicare beneficiaries. Furthermore, we believe that
our payment rates are adequate to ensure access to services.
Comment: Several commenters requested that we allow hospitals to
submit charges for the CCTA CPT codes with revenue codes outside of
general CT services, thereby allowing future cost estimates to
accurately reflect the true cost of providing CCTA exams.
Response: As we stated in the CY 2021 OPPS/ASC final rule with
comment period (85 FR 85957), it is our standard ratesetting
methodology to rely on hospital cost and charge information as it is
reported to us through the claims and cost report data. The assignment
to APC 5571 for the CCTA CPT codes is consistent with our standard
ratesetting methodology, which provides appropriate incentives for
efficiency. The OPPS is a prospective payment system that relies on
hospital charges on the claims and cost report data from the hospitals
that furnish the services in order to determine relative costs for OPPS
ratesetting. We believe that the prospective payment rates for CPT
codes 75572, 75573, and 75574, calculated based on the costs of those
providers that furnished the services in CY 2021, provide appropriate
payment to the providers who will furnish the services in CY 2023. We
continue to believe that this standard ratesetting methodology
accurately provides payment for CCTA exams provided to hospital
outpatients.
We further note that hospital outpatient facilities are responsible
for reporting the appropriate cost centers and revenue codes. As stated
in section 20.5 in Chapter 4 (Part B Hospital) of the Medicare Claims
Processing, CMS ``does not instruct hospitals on the assignment of
HCPCS codes to revenue codes for services provided under OPPS since
hospitals' assignment of cost vary. Where explicit instructions are not
provided, HOPDs should report their charges under the revenue code that
will result in the charges being assigned to the same cost center to
which the cost of those services are assigned in the cost report.''
Therefore, HOPDs must determine the most appropriate cost center and
revenue code for the CCTA CPT codes 75572, 75573, and 75574.
In summary, after consideration of the public comments, we are
finalizing our proposal, without modification, and assigning the CCTA
CPT codes 75572, 75573, and 75574 to APC 5571. The final CY 2023 OPPS
payment rates for the codes can be found in Addendum B
[[Page 71850]]
to this final rule with comment period. In addition, we refer readers
to Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
8. Cardiac Contractility Modulation (CCM) Therapy (APC 5232)
CPT code 0408T (Insertion or replacement of permanent cardiac
contractility modulation system, including contractility evaluation
when performed; and programming of sensing and therapeutic parameters;
pulse generator with transvenous electrodes) was effective January 1,
2016, and since then the code has been paid separately under the OPPS
and assigned to APC 5231 (Level 1 ICD and Similar Procedures). For CY
2022, the payment rate for CPT code 0408T (in APC 5231) is $23,550.85;
however, for CY 2023, based on our examination of the latest claims
data, we believe that reassignment to another APC is more appropriate.
Specifically, for CY 2023, we proposed to move CPT code 0408T from APC
5231 to APC 5232 (Level 2 ICD and Similar Procedures) with a proposed
payment rate of $32,613.74.
Comment: Several commenters supported the reassignment to APC 5232
for CPT code 0408T. Commenters expressed that the costs clearly
demonstrate the appropriateness of the reassignment.
Response: We appreciate the commenters support of the proposed
reassignment of CPT code 0408T to APC 5232. Based on our evaluation of
the latest claims data for this final rule with comment period, which
is based on claims submitted between January 1, 2021, and December 31,
2021, processed through June 30, 2022, we believe that the reassignment
to APC 5232 is appropriate. Our analysis shows a geometric mean cost of
about $38,417 based on 115 single claims (out of 116 total claims) for
CPT code 0408T, which is comparable to the geometric mean cost of
approximately $32,986 for APC 5232, rather than the geometric mean cost
of about $23,465 for APC 5231. The data demonstrate that the geometric
mean cost for CPT code 0408T is consistent with the geometric mean cost
of APC 5232. Therefore, we are increasing the payment for CPT code
0408T and reassigning the code to APC 5232 for CY 2023.
In summary, after our review of the public comments, we are
finalizing our proposal without modification to assign CPT code 0408T
to APC 5232 (Level 2 ICD and Similar Procedures) for CY 2023. The final
CY 2023 payment rate for CPT code 0408T can be found in Addendum B to
this final rule with comment period, which is available via the
internet on the CMS website.
9. Cardiac Magnetic Resonance (CMR) Imaging (APC 5572 and 5573)
For CY 2023, we proposed to continue to assign CPT code 75561
(Cardiac magnetic resonance imaging for morphology and function without
contrast material(s), followed by contrast material(s) and further
sequences) to APC 5572 (Level 2 Imaging with Contrast) with a proposed
CY 2023 OPPS payment rate of $375.11. We also proposed to assign CPT
code 75563 (Cardiac magnetic resonance imaging for morphology and
function without contrast material(s), followed by contrast material(s)
and further sequences; with stress imaging) to APC 5573 (Level 3
Imaging with Contrast) with proposed CY 2023 OPPS payment rate of
$751.54.
Comment: One commenter expressed concern with the fluctuating
payment for cardiac MRI services, specifically, those described by CPT
codes 75561 and 75563. They believe that these codes should be included
with clinically similar services and reassigned to different APCs. The
commenter is requesting that CPT code 75561 be reassigned to APC 5573.
The commenter is also requesting that CPT code 75563 be reassigned to
APC 5593 Level 3 (Nuclear Medicine and Related Services), which had a
proposed CY 2023 OPPS payment rate of $1,353.52.
Response: We review, on an annual basis, the APC assignments for
all services and items paid under the OPPS based on our analysis of the
latest claims data. Because payment rates are updated annually based on
the latest claims data, OPPS payments for certain services may vary
from year to year. We note that we have many years of claims data for
CPT codes 75561 and 75563 since these codes were established in 2008.
For the CY 2023 OPPS update, based on claims submitted between January
1, 2021, and December 30, 2021, processed through June 30, 2022, our
examination of the claims data for this CY 2023 OPPS/ASC final rule
with comment period supports the continued assignment of CPT codes
75561 and 75563 to APCs 5572 and 5573, respectively. For CPT code
75561, our claims data reveals a geometric mean cost of approximately
$434 based on 21,407 single claims (out of 25,141 total claims), which
is comparable to the geometric mean cost of about $379 for APC 5572,
rather the geometric mean cost of about $762 for APC 5573. Similarly,
for CPT code 75563, our claims data shows a geometric mean cost of
approximately $782 based on 3,132 single claims (out of 3,522 total
claims), which is consistent with the geometric mean cost of about $762
for APC 5573, rather than the geometric mean cost of approximately
$1,365 for APC 5593. Based on our analysis, CPT codes 75561 and 75563
are appropriately placed in APCs 5572 and 5573, respectively, based on
their clinical and resource homogeneity to the services assigned to the
APCs.
In summary, after consideration of the public comment, we are
finalizing our proposal, without modification, to assign the cardiac
MRI CPT codes 75561 and 75563 to APCs 5572 and 5573, respectively. The
final CY 2023 OPPS payment rates for these codes can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and D1 are available via the internet on the CMS website.
10. ClariFix Procedure (APC 5165)
CMS established HCPCS code C9771 (Nasal/sinus endoscopy,
cryoablation nasal tissue(s) and/or nerve(s), unilateral or bilateral))
to describe the technology associated with nasal endoscopy with
cryoablation of nasal tissues and/or nerves. HCPCS code C9771 was
established based on a New Technology application that was submitted to
CMS for New Technology consideration under the OPPS. Based on our
evaluation of the New Technology application, we assigned HCPCS code
C9771 to APC 5164 (Level 4 ENT Procedures) with a payment rate of
$2,736.39 effective January 1, 2021. In CY 2022, we continued to assign
the code to APC 5164 with a payment rate of $ 2,793.98. For CY 2023,
based on our examination of the latest claims data, we proposed to
continue to assign HCPCS code C9771 to APC 5164 with a proposed payment
rate of $2,896.26.
Comment: We received one comment from the manufacturer requesting
that HCPCS code C9771 be reassigned to APC 5165 (Level 5 ENT
Procedures), which had a proposed CY 2023 OPPS payment rate of
$5,377.70. The commenter believes that assigning HCPCS code C9771 to
APC 5165 would be more appropriate based on CY 2021 claims data and the
resource and clinical similarity to the procedures in that APC,
specifically CPT codes 30468 (Repair of nasal valve collapse with
subcutaneous/submucosal lateral wall implant(s)) and 69706
[[Page 71851]]
(Nasopharyngoscopy, surgical, with dilation of the eustachian tube
(i.e., balloon dilation); bilateral).
Response: We thank the commenter for their recommendation. We
review, on an annual basis, the APC assignments for all services and
items paid under the OPPS based on our analysis of the latest claims
data. For the CY 2023 OPPS update, based on claims submitted between
January 1, 2021, and December 30, 2021, and processed through June 30,
2022, our analysis of the latest claims data for this CY 2023 OPPS/ASC
final rule supports the reassignment of HCPCS code C9771 to APC 5165.
Specifically, our claims data show a geometric mean cost of
approximately $6,405 for HCPCS code C9771 based on 123 single claims
(out of 125 total claims), which is comparable to the geometric mean
cost of approximately $5,491 for APC 5165, rather than to the geometric
mean cost of about $2,926 for APC 5164. Based on our review of the CY
2021 claims data for the CY 2023 OPPS ratesetting, we agree that HCPCS
code C9771 would be more appropriately placed in APC 5165 based on its
clinical and resource homogeneity to the procedures in the APC.
Therefore, we are reassigning HCPCS code C9771 to APC 5165.
In summary, after consideration of the public comment, we are
finalizing reassigning HCPCS code C9771 to APC 5165 for CY 2023. The
final CY 2023 OPPS payment rate for this code can be found in Addendum
B to this final rule with comment period. In addition, we refer readers
to Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
11. Cleerly Labs (APC 1511)
Cleerly Labs is a Software as a Service (SaaS) that assesses the
extent of coronary artery disease severity using Atherosclerosis
Imaging-Quantitative Computer Tomography (AI-QCT). This procedure is
performed to quantify the extent of coronary plaque and stenosis in
patients who have undergone coronary computed tomography analysis
(CCTA). The AMA CPT Editorial Panel established the following four
codes associated with this service, effective January 1, 2021:
0623T: Automated quantification and characterization of
coronary atherosclerotic plaque to assess severity of coronary disease,
using data from coronary computed tomographic angiography; data
preparation and transmission, computerized analysis of data, with
review of computerized analysis output to reconcile discordant data,
interpretation and report.
0624T: Automated quantification and characterization of
coronary atherosclerotic plaque to assess severity of coronary disease,
using data from coronary computed tomographic angiography; data
preparation and transmission.
0625T: Automated quantification and characterization of
coronary atherosclerotic plaque to assess severity of coronary disease,
using data from coronary computed tomographic angiography; computerized
analysis of data from coronary computed tomographic angiography.
0626T: Automated quantification and characterization of
coronary atherosclerotic plaque to assess severity of coronary disease,
using data from coronary computed tomographic angiography; review of
computerized analysis output to reconcile discordant data,
interpretation and report.
In the CY 2021 OPPS/ASC final rule with comment period, we assigned
the above codes to status indicator ``E1'' to indicate that the codes
are not payable by Medicare when submitted on outpatient claims because
the service had not received FDA clearance at the time of the
assignment. We note that the codes listed in OPPS Addendum B were in
effect as of July 1, 2022, and we requested comments on the OPPS APC
and SI assignments.
For the October 2022 update, based on our review of the New
Technology application submitted to CMS for OPPS consideration, we
evaluated the current status indicator assignments for CPT codes 0623T-
0626T. Based on the technology and its potential utilization in the
HOPD setting, our evaluation of the service, as well as input from our
medical advisors, we assigned CPT code 0625T to a separately payable
status. We announced the change to the APC and SI in the October 2022
OPPS update. Specifically, in the October 2022 OPPS Update CR (Change
Request 12885, Transmittal 11594, dated September 9, 2022), we
reassigned CPT code 0625T to status indicator ``S'' (Significant
Procedures, Not Discounted when Multiple. Paid under OPPS; separate APC
payment) and APC 1511 (New Technology--Level 11 ($900--$1000)) with a
payment rate of $950.50, effective October 1, 2022, following review of
the manufacturer's New Technology APC application.
Comment: We received several comments requesting that we reassign
CPT code 0625T to status indicator ``S'' and CPT 0624T to status
indicator ``N'' (packaged). Commenters believed the status indicator
assignment of ``E1'' was an error and that CPT codes 0624T and 0625T
are comparable to other services such as HeartFlow, and should be
assigned the same status indicators as 0502T and 0503T. Additionally,
one commenter, the manufacturer of the technology associated with this
service, requested that CPT code 0625T be reassigned to APC 1557 (New
Technology--Level 17 ($1500-$1600).
Response: We thank the commenters for their recommendations. As
noted above, CPT code 0625T was reassigned to APC 1511 (New
Technology--Level 11 ($900--$1000)) effective October 1, 2022. We
believe that APC 1511, with a payment rate of $950.50, most accurately
accounts for the resources associated with furnishing the procedure
described by CPT code 0625T.
We also agree with the commenters that CPT code 0624T should be
reassigned to status indicator ``N'', and note that the technology
associated with this service received FDA clearance in October 2020. We
are finalizing the reassignment of CPT code 0624T to status indicator
``N'' effective January 1, 2023. Additionally, we are reassigning CPT
codes 0623T and 0626T to status indicator ``M'' to indicate that these
codes are not payable under the OPPS.
In summary, after consideration of the public comments, we are
finalizing our proposal, with modification, to reassign CPT code 0624T
to status indicator ``N'' and reassign CPT codes 0623T and 0626T to
status indicator ``M'' for CY 2023. We are also continuing to assign
0625T to APC 1511 (New Technology--Level 11 ($900-$1000)) for CY 2023.
The final APC assignment and status indicators for CPT codes 0623T-
0626T can be found in OPPS Addendum B. We refer readers to Addendum B
of the final rule with comment period for the final payment rates for
all codes reportable under the OPPS. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the SI meanings
for all codes reported under the OPPS. Both Addendum B and Addendum D1
are available via the internet on the CMS website.
12. Coflex[supreg] Interlaminar Implant Procedure (APC 5116)
For CY 2023, we proposed to continue to assign CPT code 22867
(Insertion of interlaminar/interspinous process stabilization/
distraction device, without fusion, including image guidance when
performed, with open decompression, lumbar; single level) to APC 5116.
CPT code 22867 describes the procedure associated with an open surgical
decompression with interlaminar stabilization of the lumbar region.
[[Page 71852]]
Comment: One commenter agreed with the proposed assignment to APC
5116 and asked CMS to finalize the proposal.
Response: CPT code 22867 was effective January 1, 2017, and since
its inception, the code has been assigned to APC 5116. For the CY 2023
OPPS update, the payment rates are based on claims submitted between
January 1, 2021, through December 31, 2021, that were processed on or
before June 30, 2022. Our analysis of the claims data for this final
rule shows 582 single claims (out of 584 total claims) with a geometric
mean cost of approximately $15,504, which falls within the range of the
geometric mean cost for the significant HCPCS codes in APC 5116. The
range of the geometric mean cost is between approximately $15,504 and
$27,978. Based on the claims data for this final rule, we are
finalizing our proposal and assigning CPT 22867 to APC 5116. We note
that we review, on an annual basis, the APC assignments for all
services and items paid under the OPPS.
In summary, after consideration of the public comment, we are
finalizing our proposal to assign CPT code 22867 to APC 5116. The final
CY 2023 OPPS payment rate for the code can be found in Addendum B to
this final rule with comment period. In addition, the complete list of
status indicator meanings for the OPPS payment system can be found in
Addendum D1 to this final rule with comment period. Both Addendum B and
Addendum D1 are available via the internet on the CMS website.
13. Colonic Lavage (APC 5721)
The CPT Editorial Panel created CPT code 0736T (Colonic lavage, 35
or more liters of water, gravity-fed, with induced defecation,
including insertion of rectal catheter) effective July 1, 2022. For CY
2023, we proposed to assign the code to APC 5733 (Level 3 Minor
Procedures) with status indicator ``Q1'', indicating conditionally
packaged payment under the OPPS with a proposed 2023 payment rate of
$58.50.
Comment: We received one comment from the manufacturer requesting
the reassignment of CPT code 0736T to APC 5694 (Level 4 Drug
Administration). The commenter stated that the assignment of CPT code
0736T to APC 5694 is more appropriate based on resource and clinical
coherence with other codes within that APC. Because the code is new and
we have no claims data, the commenter provided invoices for the
equipment, supplies, and staff required to perform this procedure.
Response: We appreciate the additional information provided by the
commenter. Based on our understanding of the procedure and input from
our medical advisors, we do not agree that the service associated with
CPT code 0736T shares significant clinical or resource similarity with
the services included in APC 5694 (Level 4 Drug Administration). We
note that the long descriptor for the code describes a service that
utilizes water and involves inserting a device, specifically, a rectal
catheter, and does not describe the administration of a drug.
Consequently, we do not believe that assignment to APC 5694 would be
appropriate. However, based on the clinical characteristics of the
procedure, we believe that the service should be reassigned to another
more appropriate APC. Based on the nature of the procedure and the
additional information provided to us, we believe that the service
associated with CPT code 0736T is more appropriate in APC 5721 (Level 1
Diagnostic Tests and Related Services). Moreover, based on our
assessment, we believe that the service described by HCPCS code 0736T
shares similar resource and clinical characteristics with some of
services included in APC 5721. Therefore, for CY 2023, we are revising
the assignment for CPT code 0736T to APC 5721, which is assigned to
status indicator ``S''.
In summary, after consideration of the public comment, we are
finalizing the APC assignment for CPT code 0736T with modification.
Specifically, we are revising the APC assignment for CPT code 0736T to
APC 5721 and assigning the code to status indicator ``S'' for CY 2023.
The final CY 2023 OPPS payment rate for this code can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Addendum D1 is
available via the internet on the CMS website. As we do every year, we
will reevaluate the APC assignment for CPT code 0736T for the next
rulemaking cycle. We note that we review, on an annual basis, the APC
assignments for all services and items paid under the OPPS.
14. CoverScan (APC 5523)
CPT code 0697T (Quantitative magnetic resonance for analysis of
tissue composition (eg, fat, iron, water content), including
multiparametric data acquisition, data preparation and transmission,
interpretation and report, obtained without diagnostic mri examination
of the same anatomy (eg, organ, gland, tissue, target structure) during
the same session; multiple organs) describes a procedure that generates
metrics for multiple organs from a single, non-contrast MRI scan. CPT
code 0697T was established effective January 1, 2022, and since its
establishment, the code has been assigned to APC 5523 (Level 3 Imaging
without Contrast). Under the OPPS, we review our claims data on an
annual basis to determine the payment rates. For CY 2023, the OPPS
payment rates are based on claims submitted between January 1, 2021,
and December 31, 2021, processed through June 30, 2022. Because the
code was new in 2022, we have no claims data at this time. However, we
note that with all new codes for which we lack pricing information, our
policy has been to assign the service to an existing APC based on input
from a variety of sources, including, but not limited to, review of the
clinical similarity of the service to existing procedures, input from
CMS medical advisors, and review of all other information available to
us. The OPPS is a prospective payment system that provides payment for
groups of services that share clinical and resource use
characteristics. For CY 2022, based on our evaluation, we assigned CPT
code 0697T to APC 5523. We believe the service associated with CPT code
0697T shares similar clinical characteristics to the services assigned
to APC 5523. For CY 2023, we proposed continuing to assign CPT code
0697T to APC 5523 with a payment rate of $238.24.
Comment: One commenter requested that CPT code 0697T be reassigned
to New Technology APC 1523 (New Technology--Level 23 ($2501-$3000))
with a payment rate of $2,750.50. The commenter noted that the
procedure described by CPT code 0697T captures images and provides
metrics on multiple organs, however, the code for the service is
assigned to an APC whose payment rate is much lower in comparison to
similar procedures that only capture images and generate metrics for a
single organ.
Response: The developer of the service described by CPT code 0697T
recently submitted an application for consideration as a new technology
service through the CMS OPPS New Technology APC process. Because we are
currently reviewing the application, we are not making any changes to
the APC assignment for CPT code 0697T at this time. After our
evaluation of the application, we will determine whether a change to
the APC assignment is necessary.
After consideration of the public comment, we are finalizing our
proposal without modification to continue to
[[Page 71853]]
assign CPT code 0697T to APC 5523 for CY 2023. The final CY 2023
payment rate for CPT code 0697T can be found in Addendum B to this
final rule with comment period, which is available via the internet on
the CMS website.
15. COVID-19 Vaccine 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 vaccines 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.\16\ 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.
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\16\ 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.
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b. Payment for COVID-19 Vaccine Administration Services Under the OPPS
and Use of Alternative Site-Neutral Methodology to Update Payment Rates
for COVID-19 Vaccine Administration Services for CY 2023
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.\17\ 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.
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\17\ 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.
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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 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 primary series 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 to the CY 2021
and 2022 OPPS/ASC final rules with comment period on the CMS OPPS
website. As of July 1, 2022, there are approximately 18 COVID-19
vaccine administration HCPCS codes. 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-averagesales-price/covid-19-vaccines-andmonoclonal-antibodies. Based on our review of CY 2021
claims data associated with the COVID-19 vaccine administration HCPCS
codes, we explained in the proposed rule that the geometric mean cost
for APC 9397 is $25.86 and the geometric mean cost for APC 9398 is
$36.80. We are generally using CY 2021 claims data to set CY 2023
payment rates for APCs at the geometric mean costs for the APCs based
on that data. We note, however, that CY 2021 utilization of the COVID-
[[Page 71854]]
19 vaccine administration codes in the outpatient hospital setting was
very high, with nearly 7 million claims for these codes in that year,
which may not be reflective of future year utilization. Because 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 explained
in the proposed rule that 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, although the geometric mean costs for the
APCs to which we assigned the COVID-19 vaccine administration codes are
lower than $40, for CY 2023 we proposed to use the equitable adjustment
authority in section 1833(t)(2)(E) of the Act to maintain the payment
rate of $40 for each of the COVID-19 vaccine administration APCs: APC
9397 and APC 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 noted in the CY 2023 OPPS/ASC proposed rule (87 FR 44575) that
we do not pay under the OPPS for monoclonal antibody products used to
treat COVID-19 and their administration using the COVID-19 vaccine
administration APCs. Rather, 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. For further discussion of payment
for COVID-19 monoclonal antibody administration see section III.E.15.d
below in this final rule with comment period.
Under current policy, the payment rates for COVID-19 vaccine
administration services are site-neutral across most outpatient and
ambulatory settings. We requested 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 section 1833(t)(2)(E) of the Act) 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 was
included in the July 29, 2022 Federal Register (87 FR 46221 through
46222), we proposed to update the payment rate for the administration
of preventive vaccines (other than for services paid under other
payment systems such as the OPPS) using the annual increase to the
Medicare Economic Index (MEI). We requested 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) of the Act, 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 referred readers to the CY 2023
PFS proposed rule that was included in the July 29, 2022 Federal
Register (87 FR 46218 through 46228).
We also sought 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 proposed 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. Additionally, we requested 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) of the Act 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.
Comment: Commenters supported our proposal 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 for CY 2023. One commenter recommended that CMS maintain
these payment rates beyond CY 2023.
One commenter expressed concerns over site-neutral payment policies
for both COVID-19 vaccine administration when furnished in facilities
and COVID-19 vaccine administration furnished in the patient's home.
These commenters stated that site-neutral policies may make it more
challenging for different settings to offer certain services when
reimbursement does not adequately reflect the different costs involved
in providing care.
One commenter stated that adjustments to the payment rate for
COVID-19 vaccine administration should be made based on the MEI and
GAF, consistent with the proposal in the CY 2023 PFS proposed rule.
This commenter stated that they believe that both updates could be
adopted using CMS's equitable adjustment authority under section
1833(t)(2)(E) of the Act.
Response: We continue to believe that the resources associated with
COVID-19 vaccine administration do not vary across settings of care and
are largely consistent across physician office and hospital outpatient
department settings. We agree that, for CY 2023, the payment rates for
COVID-19 vaccine administration should be consistent across settings of
outpatient care, and we are concerned that a higher payment rate in the
physician office setting could create financial incentives to furnish
COVID-19 vaccines in that setting, rather than the hospital setting.
Therefore, for CY 2023, we are finalizing adoption of the PFS payment
rates for COVID-19 vaccine administration using our equitable
adjustment authority at section 1833(t)(2)(E) of the Act. We believe
that our goal to promote broad and timely access to COVID-19 vaccines
will be better served if our policies with respect to payment for these
products continue until the EUA declaration pursuant to section 564 of
the Federal
[[Page 71855]]
Food, Drug and Cosmetic (FD&C) Act covering these products is
terminated. Therefore, we are finalizing payment rates for APCs 9397
and 9398 of $41.52 if the EUA declaration \18\ persists into CY 2023
and $31.14 if the EUA declaration is terminated in CY 2022. We note
that we will display a payment rate of $41.52 in Addendum B of the CY
2023 OPPS final rule with comment period and if needed will update the
APC payment rates to $31.14 through sub regulatory guidance. We are
also finalizing creation of a new APC, APC 9399 (Covid-19 vaccine home
administration), with a payment rate of $36.85 and are reassigning
HCPCS code M0201 so as to effectuate the same payment amount for at-
home COVID-19 vaccine administration when billed by both hospitals and
physician offices. We will consider whether to implement permanent
site-neutral payment rates in future rulemaking.
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\18\ 85 FR 18250.
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c. Comment Solicitation on the Appropriate Payment Methodology for
Administration of Preventive Vaccines
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, we sought comments on the appropriate payment
methodology for the administration of Part B preventive vaccines,
including the COVID-19 vaccine post-PHE.
Comment: Several commenters stated that, while they support a site-
neutral payment policy for vaccines in general because the resource
costs of administering a vaccine are consistent across settings of
care, they believe the OPPS payment rate is more accurate than the PFS
rate and encouraged CMS to continue to use OPPS ratesetting for the
Part B preventive vaccine administration services as the OPPS
methodology is updated each year by new cost data based on OPPS claims,
which is a more reliable source of current hospital costs for services.
Response: We thank commenters for their input and will consider any
changes to the payment methodology for preventive vaccines in future
rulemaking.
d. 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 the availability of COVID-19 monoclonal antibody
products, we noted in the CY 2023 OPPS/ASC proposed rule that as of the
date of publication of that proposed rule, there were 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.\19\ We note that at the time of
publication of this final rule with comment period, 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.
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\19\ Viewed 5/6/2022. https://www.fda.gov/emergency-preparedness-and-response/mcm-legal-regulatory-and-policy-framework/emergency-use-authorization.
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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.\20\ The HCPCS
codes associated with the COVID-19 monoclonal antibody products are
assigned to 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.
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\20\ 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.
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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,\21\ 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.
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\21\ https://www.cms.gov/monoclonal.
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For CYs 2021 and 2022, we maintained the payment rates for the
COVID-19 monoclonal antibody product administration services by
maintaining their New Technology APC assignments. For further
information, please see Addendum B to the CY 2021 and 2022 OPPS/ASC
final rules with comment period. For CY 2023, we proposed to use the
equitable adjustment authority at section 1833(t)(2)(E) of the Act 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 noted 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 proposals regarding such
payment, we referred readers to the CY 2023 PFS proposed
[[Page 71856]]
rule that was included in the July 29, 2022 Federal Register (87 FR
46224 through 46228). In particular, the CY 2023 PFS proposed rule
proposed 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 under section 564 of the FD&C Act for drugs and biological
products is terminated. Additionally, we proposed to continue the
existing policy to pay for monoclonal antibody products used as pre-
exposure prophylaxis for prevention of COVID-19 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.
Comment: We did not receive any comments on our proposal to
continue existing policy to pay for monoclonal antibody COVID-19 pre-
exposure prophylaxis products under the Part B vaccine benefit after
the EUA declaration is terminated, provided those products have market
authorization. Commenters stated that while they appreciated CMS's
efforts to provide consistent payment policy for monoclonal antibodies
and their administration during the PHE, they encouraged the agency to
continue to work with providers to ensure that the payment rates are
accurate, even if they vary by setting of care.
Response: We thank commenters for their input and will consider any
changes to payment policy for monoclonal antibodies and their
administration in future rulemaking.
Comment: Commenters encouraged CMS to work with providers as we
scale back or wind down any PHE-specific flexibilities so that the
agency provides clear guidance on how payment policies may be changing,
and the impact that will have on providers.
Response: We appreciate these comments and will consider how best
to provide guidance on any policy changes either during the PHE or
after.
After consideration of public comments, we are finalizing our
proposal to use the equitable adjustment authority at section
1833(t)(2)(E) of the Act 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. We are also
finalizing our proposal that this policy would continue to apply for
OPPS payment for monoclonal antibody products used as pre-exposure
prophylaxis for prevention of COVID-19 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.
16. Duplex Scan of Extracranial Arteries (APC 5523)
For CY 2023, we proposed to continue to assign CPT code 93880
(Duplex scan of extracranial arteries; complete bilateral study) to APC
5523 (Level 3 Imaging without Contrast) with a proposed payment rate of
$238.24.
Comment: One commenter disagreed with the proposed payment amount
and recommended that CPT code 93880 be reassigned from APC 5523 to APC
5524 (Level 4 Imaging without Contrast) with a proposed payment rate of
$512.73 for CY 2023. The commenter stated that CPT code 93880 should be
reassigned due its clinical and resource similarity to CPT code 93306
(Echocardiography, transthoracic, real-time with image documentation
(2d), includes m-mode recording, when performed, complete, with
spectral doppler echocardiography, and with color flow doppler
echocardiography), which is assigned to APC 5524.
Response: We are not accepting this recommendation. We review, on
an annual basis, the APC assignments for all services and items paid
under the OPPS based on our analysis of the latest claims data. For the
CY 2023 OPPS update, based on claims submitted between January 1, 2021,
and December 30, 2021, and processed through June 30, 2022, our
analysis of the claims data for this final rule with comment period
supports the continued assignment of CPT code 93880 to APC 5523 based
on its clinical and resource homogeneity to the procedures and services
in the APC. Specifically, our claims data show a geometric mean cost of
approximately $225 based on 444,369 single claims (out of 514,044 total
claims) for CPT code 93880, which is consistent with the geometric mean
cost of about $240 for APC 5523, rather than the geometric mean cost of
approximately $517 for APC 5524. We believe the resource requirements
for CPT code 93880 are more similar to procedures found in APC 5523
rather than in APC 5524. Therefore, for CY 2023, we will continue to
assign CPT code 93880 to APC 5523.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification and assigning CPT code
93880 to APC 5523 for CY 2023. The final CY 2023 OPPS payment rate for
the code can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the status indicator (SI) meanings for all
codes reported under the OPPS. Both Addendum B and D1 are available via
the internet on the CMS website.
17. Endoscopic Submucosal Dissection (ESD) Procedure (APC 5303)
CMS established HCPCS code C9779 (Endoscopic submucosal dissection
(ESD), including endoscopy or colonoscopy, mucosal closure, when
performed) effective October 1, 2021, to describe the endoscopic
submucosal dissection (ESD) performed during an endoscopy or
colonoscopy. HCPCS code C9779 was established based on a New Technology
application that was submitted to CMS for New Technology consideration
under the OPPS. Based on our assessment, we assigned the code to APC
5313 (Level 3 Lower GI Procedures) because we believe the ESD procedure
has similar clinical characteristics and resource costs as the surgical
procedures assigned to APC 5313. We announced the assignment to APC
5313 in the October 2021 OPPS quarterly update CR (Transmittal 10997,
Change Request 12436, dated September 16, 2021) with a payment rate of
$2,443.39. In CY 2022, we continued to assign the code to APC 5313 with
a payment rate of $2,495.04. For CY 2023, we proposed to continue to
assign HCPCS code C9779 to APC 5313 with a proposed payment rate of
$2,611.51.
Comment: Some commenters disagreed with the proposed payment amount
and requested that HCPCS code C9779 be reassigned from APC 5313 to APC
5303 (Level 3 Upper GI Procedures) with a proposed payment rate of
$3,319.29 for CY 2023. Commenters stated that the ESD procedure's
resource requirements and geometric mean cost of $4,049 are more
similar to the resource requirements and geometric mean costs of
procedures found in APC 5303. Further, commenters noted that the ESD
procedure is technically more demanding, requires advanced skills to
perform, and is clinically similar to CPT code 43497 (Lower esophageal
myotomy, transoral (i.e., peroral endoscopic myotomy [POEM])), which is
currently assigned to APC 5303.
Response: Based on the comments received, further evaluation of the
surgical procedure, and input from our medical advisors, we agree with
the commenters that the resource requirements for HCPCS code C9779
[[Page 71857]]
may be more similar to the procedures assigned to APC 5303. Therefore,
we are accepting the commenter's recommendation and reassigning HCPCS
code C9779 to APC 5303 for CY 2023.
In summary, after consideration of the public comments, we are
finalizing reassigning HCPCS code C9779 to APC 5303 for CY 2023. We
note that we review, on an annual basis, the APC assignments for all
services and items paid under the OPPS based on our analysis of the
latest claims data. The final CY 2023 OPPS payment rate for the code
can be found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the status indicator (SI) meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
18. Endovenous Femoral-Popliteal Arterial Revascularization (APC 5193)
For CY 2023, we proposed to continue to assign CPT code 0505T
(Endovenous femoral-popliteal arterial revascularization, with
transcatheter placement of intravascular stent graft(s) and closure by
any method, including percutaneous or open vascular access, ultrasound
guidance for vascular access when performed, all catheterization(s) and
intraprocedural roadmapping and imaging guidance necessary to complete
the intervention, all associated radiological supervision and
interpretation, when performed, with crossing of the occlusive lesion
in an extraluminal fashion) to APC 5193 (Level 3 Endovascular
Procedures) with a proposed payment rate of $10,760.97.
Comment: One commenter requested the reassignment of CPT code 0505T
to APC 5194 (Level 4 Endovascular Procedures). The commenter provided
utilization claims data and asserted that CPT code 0505T is currently
being studied in an IDE clinical trial and that the claims are not
currently representative of the full cost of the procedure. The
commenter stated that CPT code 0620T (Endovascular venous
arterialization, tibial or peroneal vein, with transcatheter placement
of intravascular stent graft(s) and closure by any method, including
percutaneous or open vascular access, ultrasound guidance for vascular
access when performed, all catheterization(s) and intraprocedural
roadmapping and imaging guidance necessary to complete the
intervention, all associated radiological supervision and
interpretation, when performed), which is assigned to APC 5194, is
clinically similar to CPT code 0505T.
Response: Based on our review of the cost data and input from our
clinical advisors, we disagree with the suggestion that CPT code 0505T
should be assigned to APC 5194. We also do not agree that CPT code
0505T is comparable to CPT 0620T. We review, on an annual basis, the
APC assignments for all services and items paid under the OPPS. Based
on our analysis of the claims data for this CY 2023 OPPS/ASC final rule
with comment period, our data shows a geometric mean cost of about
$14,264 for CPT code 0505T based on 22 single claims (out of 22 total
claims), which is in line with the geometric mean cost of $10,916 for
APC 5193. In contrast, the geometric mean cost for CPT code 0620T is
significantly higher at approximately $26,468, which is based on 9
single claims (out of 9 total claims). Our data demonstrates that the
resource cost associated with CPT code 0505T is significantly lower
than the cost of CPT code 0620T. We believe that the procedure
described by CPT code 0505T is more clinically similar to the
procedures assigned to APC 5193 (Level 3 Endovascular Procedures) and
that the costs of other procedures in this APC more accurately compare
to the costs associated with CPT code 0505T.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification to assign CPT code 0505T
to APC 5193. The final CY 2023 payment rate for this code can be found
in Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and D1 are available via the internet on the CMS website. For
additional discussion regarding the commenter's request to add CPT code
0505T to the ASC covered procedures list (CPL), refer to section XIII.
(ASC Payment System) of this final rule.
19. External Electrocardiographic (ECG) Recording (APC 5732)
For CY 2023, we proposed to assign CPT code 93242 (External
electrocardiographic recording for more than 48 hours up to 7 days by
continuous rhythm recording and storage; recording (includes connection
and initial recording)) to APC 5732 (Level 2 Minor Procedures) with a
proposed payment rate of $34.61. The code was new in CY 2021 with an
effective date of January 1, 2021. Prior to CY 2021, the code was
reported with CPT code 0296T (External electrocardiographic recording
for more than 48 hours up to 21 days by continuous rhythm recording and
storage; recording (includes connection and initial recording)), which
was active between January 1, 2012, and December 31, 2020.
Comment: We received a comment requesting that we assign CPT code
93242 to APC 5733 or 5734 (Level 4 Minor Procedures). The commenter
stated that the resource cost associated with furnishing the service
described by CPT code 93242 is not reflected in the payment rate for
APC 5732.
Response: We review, on an annual basis, the APC assignments for
all services and items paid under the OPPS based on our review of the
latest claims data. For the CY 2023 OPPS update, based on claims
submitted between January 1, 2021, and December 30, 2021, processed
through June 30, 2022, our analysis of the latest claims data for this
CY 2023 OPPS/ASC final rule supports the assignment of CPT code 93242
to APC 5732 based on its clinical and resource homogeneity to the
procedures and services in the APC. Specifically, our data shows a
geometric mean cost of approximately $25 based on 15,603 single claims
(out of 31,034 total claims) for CPT code 93242, which is consistent
with the geometric mean cost of about $35 for APC 5732 rather than the
geometric cost of about $59 for APC 5733 or the geometric mean cost of
approximately $119 for APC 5734. Based on our data, the cost associated
with furnishing CPT code 93242 is significantly less than the cost
associated with the services assigned to APC 5733 or APC 5734. We
believe that CPT code 93242 accurately fits in APC 5732 based on its
clinical and resource homogeneity to the procedures in the APC.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification, and assigning CPT code
93242 to APC 5732 for CY 2023. The final CY 2023 payment rate for this
code can be found in Addendum B to this final rule with comment period.
In addition, we refer readers to Addendum D1 of this final rule with
comment period for the status indicator (SI) meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
20. Eye Procedures (APCs 5502 and 5503)
For CY 2023, we proposed to continue to assign CPT code 65426
(Excision or transposition of pterygium; with graft) to APC 5503 (Level
3 Extraocular, Repair, and Plastic Eye Procedures) with
[[Page 71858]]
a proposed payment rate of $2,140.55. In addition, we proposed to
continue to assign CPT 65778 (Placement of amniotic membrane on the
ocular surface; without sutures) to APC 5502 (Level 2 Extraocular,
Repair, and Plastic Eye Procedures) with a proposed payment rate of
$882.12.
Comment: A commenter requested the reassignment of CPT code 65426
to APC 5504 (Level 4 Extraocular, Repair, and Plastic Eye Procedures)
and CPT 65778 to APC 5503 (Level 3 Extraocular, Repair, and Plastic Eye
Procedures). The commenter stated that the inclusion of ``grafts'' in
CPT 65426 code descriptor leads to billing discrepancies and
underreported device and supply costs. The commenter believes that the
device offset for CPT 65426 and CPT 65778 is not truly reflective of
the cost of the graft as a result of the underreported device and
supply costs. Additionally, the commenter cited CPT 65779 (Placement of
amniotic membrane on the ocular surface; single layer, sutured) and CPT
65780 (Ocular surface reconstruction; amniotic membrane
transplantation, multiple layers) as two examples of procedures paid
for under the OPPS that use the same graft as CPT code 65426 but are
assigned to APC 5504, with CPT 65779 having a device offset amount of
$1,242.53.
Response: Based on our review of the cost data and input from our
clinical advisors, we disagree with commenters that CPT code 65426
should be assigned to APC 5504. For CY 2023, based on claims submitted
between January 1, 2021, through December 31, 2021, that were processed
on or before June 30, 2022, our analysis of the latest claims data for
this final rule continues to support the assignment to APC 5503 for CPT
code 65426. Specifically, our claims data reveal a geometric mean cost
of approximately $2,474 for CPT code 65426 based on 1,092 single claims
(out of 1,101 total claims), which is consistent with the geometric
mean cost of about $2,174 for APC 5503, rather than the geometric mean
cost of $3,595 for APC 5504. Similarly, we do not agree that CPT code
65778 should be reassigned to APC 5503. Our claims data show a
geometric mean cost of approximately $1,349 for CPT code 65778 based on
190 single claims (out of 443 total claims), which is consistent with
the geometric mean cost of about $897 for APC 5502, rather than the
geometric mean cost of approximately $2,174 for APC 5503. We believe
that assigning CPT code 65778 to APC 5503 would overpay for the
procedures. In addition, we do not believe that CPT code 65426 is
comparable to CPT code 65779 or CPT code 65780. Based on our review of
the clinical characteristics of the procedure, and input from our
medical advisors, we believe CPT code 65426 is more similar to the
procedures assigned to APC 5503 and CPT code 65778 is more similar to
the procedures assigned to APC 5502, and these payment rates better
account for the cost of the procedures as well as the resources used.
With respect to the issue of billing discrepancies, based on our
review of the claims data for CPT codes 65426 and 65778, we have no
reason to believe that the procedures are miscoded. Based on our
analysis of the claims data for this final rule with comment period, we
are unable to determine whether hospitals are misreporting the
procedures. Moreover, it is generally not our policy to judge the
accuracy of provider coding and charging for purposes of OPPS
ratesetting. We rely on hospitals and providers to accurately report
the use of HCPCS codes in accordance with their code descriptors and
CPT and CMS instructions, and to report services accurately on claims
and charges and costs for the services on their Medicare hospital cost
report.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification, and assigning CPT code
65426 to APC 5503 and CPT 65778 to APC 5502. The final CY 2023 payment
rate for these codes can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with comment period for the SI meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website. For additional discussion regarding the
commenter's request to increase the device offset of CPT code 65426 and
CPT code 65779, refer to section IV.C. (Device-Intensive Procedures) of
this final rule.
21. Eye-Movement Analysis Without Spatial Calibration (APC 5734)
The CPT Editorial Panel established CPT code 0615T (Eye-movement
analysis without spatial calibration, with interpretation and report),
effective July 1, 2020, to describe eye-movement analysis without
spatial calibration that involves the use of the EyeBOX system as an
aid in the diagnosis of concussion, also known as mild traumatic brain
injury (mTBI). The EyeBOX is intended to measure and analyze eye
movements as an aid in the diagnosis of concussion within one week of
head injury in patients 5 through 67 years of age in conjunction with a
standard neurological assessment of concussion. A negative EyeBOX
classification may correspond to eye movement that is consistent with a
lack of concussion. A positive EyeBOX classification corresponds to eye
movement that may be present in both patients with or without a
concussion.
For CY 2023, we proposed to continue to assign CPT code 0615T to
APC 5734 (Level 4 Minor Procedures) with status indicator ``Q1''
(conditionally packaged) and a proposed CY 2023 OPPS payment rate of
$118.32.
Comment: A commenter requested a change in the status indicator for
CPT code 0615T to ``S'' to make it separately payable to provide
adequate reimbursement and to treat it similarly to other SaaS
procedures. The commenter also stated that packaging payment for use of
the EyeBox into payment for the clinic or emergency department visit
produces insufficient reimbursement, just as CMS's current approach to
the other packaged SaaS codes fails to provide appropriate payment for
those services. The manufacturer also urged CMS to assign the procedure
to an APC with a payment rate of at least $200 to ensure that hospitals
are adequately reimbursed for this procedure.
Response: Although HCPCS code 0615T was effective July 1, 2020, we
have no claims data for the code. We note that for the CY 2023 OPPS
update, payments are based on claims submitted between January 1, 2021,
through December 31, 2021, and processed through June 30, 2022. Because
we have no claims data, we believe that we should continue to assign
CPT code 0615T to APC 5734 for CY 2023. We note that we review, on an
annual basis, the APC assignments for all services and items paid under
the OPPS. As a result, we will reevaluate the placement for CPT code
0615T for the next rulemaking cycle.
In addition, as listed in OPPS Addendum D1 of the CY 2023 OPPS/ASC
proposed rule, codes assigned to status indicator ``Q1'' may be
packaged, assigned to a composite APC, or paid separately under the
OPPS. Specifically, a ``Q1'' status indicator may indicate a:
Packaged APC payment if billed on the same claim as a
HCPCS code assigned status indicator ``S'', ``T'', or ``V''; or
Composite APC payment if billed with specific combinations
of services based on OPPS composite-specific payment criteria. Payment
is packaged into a single payment for specific combinations of
services; or
In other circumstances, payment is made through a separate
APC payment
[[Page 71859]]
After reviewing the procedure with our medical advisors, we believe
that, similar to several other SaaS procedures, it is appropriate for
the procedure described by CPT code 0615T to be paid separately.
Therefore, we are revising the status indicator for the code from
``Q1'' (conditionally packaged) to ``S'' (Procedure or Service, Not
Discounted When Multiple) to indicate that the service is paid
separately.
After consideration of the public comment, we are finalizing our
proposal with modification. Specifically, we are finalizing the
assignment to APC 5734 for CPT code 0615T and revising the status
indicator from ``Q1'' (conditionally packaged) to ``S'' (separately
payable), consistent with the CY 2023 payment methodology for other
SaaS procedures.
22. Fecal Microbiota Procedure (APC 5301)
For January 1, 2023, the AMA's CPT Editorial Panel established new
CPT code 0780T (Instillation of fecal microbiota suspension via rectal
enema into lower gastrointestinal tract). We note that CPT code 0780T
was listed as placeholder code X041T in the OPPS Addendum B of the CY
2023 OPPS/ASC proposed rule. The CPT code descriptors that appear in
Addendum B are short descriptors and do not accurately describe the
complete procedure, so we included the 5-digit placeholder codes and
long descriptors for the new CY 2023 CPT codes in Addendum O to the
proposed rule (which is available via the internet on the CMS website)
so that the public could adequately comment on the proposed APCs and SI
assignments. The 5-digit placeholder codes were included in Addendum O,
specifically under the column labeled ``CY 2023 OPPS/ASC Proposed Rule
5-Digit AMA Placeholder Code,'' to the proposed rule. We further stated
in the proposed rule that the final CPT code numbers would be included
in this CY 2023 OPPS/ASC final rule with comment period. For CY 2023,
we proposed to assign CPT code 0780T to status indicator ``B'',
indicating that this code is not paid under OPPS and an alternate code
that is recognized by OPPS may be available.
Comment: We received one comment from the manufacturer requesting
that CMS assign CPT code 0780T to status indicator ``T'' and APC 5301
(Level 1 Upper GI Procedures) with a proposed payment rate of $841.07.
The commenter stated that CPT code 0780T should be assigned to APC 5301
based on its clinical and resource homogeneity to procedures in this
APC. The commenter also expressed concern that the lack of payment for
CPT code 0780T under the OPPS would negatively impact Medicare
beneficiaries' access to procedure.
Response: We thank the commenter for their feedback. The fecal
microbiota procedure has been in existence for several years now, and
although CPT code 0780T is a new code effective January 1, 2023, the
procedure is already described by existing codes, specifically, HCPCS
code G0455 and CPT code 44705. Since 2013, Medicare has paid separately
for HCPCS code G0455 under the OPPS. Table 40 lists the long
descriptors for all three codes. We note that CPT code 44705 was
effective January 1, 2013, however, as we stated in both the CY 2013
PFS final rule (77 FR 69052) and the CY 2014 OPPS/ASC final rule with
comment period (78 FR 74978-74979), we did not recognize the CPT code,
and instead established HCPCS code G0455, effective January 1, 2013. We
note that the payment for the preparation and instillation of fecal
microbiota is included in HCPCS code G0455. As stated in the CY 2013
PFS final rule, Medicare's payment for the preparation of the donor
specimen is only made if the specimen is ultimately used for the
treatment of a beneficiary because Medicare is not authorized to pay
for the costs of any services not directly related to the diagnosis and
treatment of a beneficiary (77 FR 69052). For the fecal microbiota
procedure, the only code payable under the OPPS is HCPCS code G0455 for
this procedure.
For CY 2023, we proposed to continue to assign HCPCS code G0455 to
status indicator Q1 (conditionally packaged) and APC 5301 (Level 1
Upper GI Procedures), which had a proposed CY 2023 OPPS payment rate of
$841.07. Because HCPCS code G0455 exists to describe the fecal
microbiota procedure, both CPT codes 44705 and 0780T are assigned to
status indicator ``B'' (Codes that are not recognized by OPPS when
submitted on an outpatient hospital Part B bill type (12x and 13x) to
indicate that the codes are not recognized under OPPS, and instead,
should be reported with another HCPCS code. In this case, the
appropriate code that should be reported to Medicare under the OPPS is
HCPCS code G0455 for the fecal microbiota procedure.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification and assigning CPT code
0780T to status indicator ``B''. In addition, we note that we received
no comments on CPT code 44705 or HCPCS code G0455 and are finalizing
our proposals with respect to those codes without modification. Table
40 list the long descriptors for the fecal microbiota HCPCS and CPT
codes and their OPPS SI and APC assignments for CY 2023. We refer
readers to Addendum D1 of this final rule with comment period for the
status indicator (SI) meanings for all codes reported under the OPPS.
Addendum D1 is available via the internet on the CMS website.
[[Page 71860]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.055
23. 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 service is
indicated 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). In 2018, the CPT Editorial Panel established CPT code 0503T
to describe the service associated with HeartFlow. Below is the long
description for the CPT code:
0503T: Noninvasive estimated coronary fractional flow
reserve (ffr) derived from coronary computed tomography angiography
data using computation fluid dynamics physiologic simulation software
analysis of functional data to assess the severity of coronary artery
disease; analysis of fluid dynamics and simulated maximal coronary
hyperemia, and generation of estimated ffr model
For many services paid under the OPPS, payment for analytics that
are performed after the main diagnostic/image procedure are packaged
into the payment for the primary service. However, in CY 2018, we
determined that 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. Based on pricing information provided
by the developer of the procedure that indicated the price of the
procedure was approximately $1,500, in CY 2018, 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. Because the CPT code was new in 2018, we did not have
Medicare claims data in CY 2019; and we continued to assign the service
to New Technology APC 1516 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. We note that for CY 2020, the
OPPS payment rates were based on claims submitted between January 1,
2018, and December 31, 2018, processed through June 30, 2019. For the
CY 2020 OPPS/ASC final rule with comment period, there were 957 claims
reported 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. Therefore,
in CY 2020, we assigned CPT code 0503T to New Technology APC 1511.
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
[[Page 71861]]
policy. Therefore, we used our standard methodology rather than the
low-volume methodology we previously used to determine the cost of CPT
code 0503T. Based on the CY 2019 claims data used for the CY 2021 OPPS
ratesetting, we found that the geometric mean cost decreased from the
previous year. Specifically, our analysis found that the geometric mean
cost for CPT code 0503T was $804.35, which was consistent with the
geometric mean cost for New Technology APC 1510 (New Technology--Level
10 ($801-$900)). However, providers and other stakeholders noted that
the cost to furnish FFRCT services is approximately $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, in CY 2021, 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 New Technology APC
1511, which is the same APC assignment 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
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.
Since 2018, CPT code 0503T has been paid separately under the OPPS.
We now have several years' worth of claims data. Based on the
historical claims data for the past three years, specifically, from CY
2018, CY 2019, and CY 2021, and based on the claims data for the CY
2023 OPPS/ASC proposed rule, we stated that we believe that CPT code
0503T should be reassigned from a New Technology to a clinical APC.
First, we explained that 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, about $808 in CY 2019, and approximately $827
in CY 2021. Since the cost data have been stable for HeartFlow for the
past several years, we stated that we believe it is appropriate to
reassign the service to a clinical APC using our regular process of
using the most recent year of claims data for a procedure. Based on our
analysis of the claims data for the proposed rule, the geometric mean
cost for CPT code 0503T is $826.52 based on 1,681 single claims.
HeartFlow is a diagnostic service, and based on its geometric mean
cost, we believe that the cost of furnishing the FFRCT service is
similar to the other services within APC 5724 (Level 4 Diagnostic Tests
and Related Services), whose geometric mean cost is $960.98. We further
believe that CPT code 0503T appropriately fits in APC 5724 based on its
clinical and resource homogeneity to the procedures in the APC.
Therefore, for CY 2023, we proposed to reassign CPT code 0503T to
clinical APC 5724 (Level 4 Diagnostic Tests and Related Services) with
a proposed payment rate of $952.52.
Comment: Multiple commenters, including the developer of HeartFlow,
expressed support for our proposal to assign CPT code 0503T to clinical
APC 5724. The commenters believe APC 5724 is an appropriate APC
assignment that reflects most of the costs of the HeartFlow service.
The commenters also appreciated the payment stability for the service
that will occur since HeartFlow is assigned to a clinical APC rather
than a new technology APC.
Response: We appreciate the support of our proposal from the
commenters. We note that analysis of the latest claims data for this
final rule with comment period further supports the assignment to APC
5724. Specifically, our analysis reveals a geometric mean cost of about
$824 for CPT code 0503T based on 1,844 single claims (out of 6,660
total claims), which is comparable to the geometric mean cost of
approximately $961 for APC 5724.
After consideration of the public comments we received, we are
finalizing our proposal without modification to assign CPT code 0503T
to clinical APC 5724 (Level 4 Diagnostic Tests and Related Services)
for CY 2023. Table 41 shows the current status indicator and APC
assignment for CPT code 0503T for CY 2022, and the finalized status
indicator and APC assignment for CPT code 0503T for CY 2023. We refer
readers to Addendum B of this CY 2023 OPPS/ASC final rule for the
payment rates for all codes reportable under the OPPS. Addendum B is
available via the internet on the CMS website.
[[Page 71862]]
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24. Gastrointestinal Motility (APC 5722)
Gastrointestinal (GI) motility codes describe procedures that
assesses the motor activity and muscle contractions of the colon or
large intestine. For CY 2023, we proposed to assign CPT code 91117
(Colon motility (manometric) study, minimum 6 hours continuous
recording (including provocation tests, e.g., meal, intracolonic
balloon distension, pharmacologic agents, if performed), with
interpretation and report) and CPT code 91122 (Anorectal manometry) to
APC 5371 (Level 1 Urology and Related Services), with a proposed
payment rate of $224.14.
Comment: Commenters expressed concerns with the proposed CY 2023
geometric mean cost of APC 5371. Specifically, they are concerned that
the decrease in the geometric mean cost for APC 5371 will adversely
impact the payment rate for two GI motility codes, specifically, CPT
codes 91117 and 91122. The commenters also contended that the two GI
motility codes, currently assigned to APC 5371, do not share similar
clinical characteristics with the urological services assigned to APC
5371 as this APC series is designated for urology and related services.
The commenters further pointed out that these services are more
similar, clinically and with regard to resource utilization, to three
other GI motility codes: CPT code 91037 (Esophageal function test,
gastroesophageal reflux test with nasal catheter intraluminal impedance
electrode(s) placement, recording, analysis and interpretation;), CPT
code 91120 (Rectal sensation, tone, and compliance test (ie, response
to graded balloon distention)), and CPT code 91132
(Electrogastrography, diagnostic, transcutaneous;), which are currently
assigned to APC 5722 (Level 2 Diagnostic Tests and Related Services),
with a proposed payment rate of $285.63. The commenters argued that the
proposed geometric mean cost of $324.49 for CPT code 91122 is in line
with the geometric mean cost for the three GI motility codes (CPT codes
91037, 91120, and 91132) currently assigned to APC 5722 (Level 2
Diagnostic Tests and Related Services). The commenter further stated
that the low volume of CPT code 91117 is primarily due to the procedure
being performed in the pediatric population.
Response: We agree with the commenters that CPT codes 91117 and
91122 are clinically similar to CPT codes 91037, 91120, and 91132,
which assess the GI motility. In terms of resource utilization, our
analysis of the latest CY 2021 claims data for this CY 2023 OPPS/ASC
final rule with comment period, yielded zero single claims for CPT code
91117, therefore we have no data for its geometric mean cost. However,
we observed 3,741 single claims for CPT code 91122 with a geometric
mean cost of about $324.83. Therefore, we agree with the commenters
that CPT code 91122 has a similar resource utilization to the
procedures assigned to APC 5722, which include CPT code 91037
(geometric mean cost: $207.23), CPT code 91120 (geometric mean cost:
$213.02), and CPT code 91132 (geometric mean cost: $326.53). However,
we note that APC 5722 is not limited to CPT codes 91037, 91120, and
91132, but instead, includes a myriad of diagnostic tests besides GI
motility procedures. We analyzed our claims data for this final rule
with comment period, and the geometric mean cost for four of the five
motility codes, specifically, 91037, 91120, 91122, and 91132, range
between $207 and $327, which is in line with the geometric mean cost of
about $288 for APC 5722. Although we have no claims data for CPT code
91117, because the service is clinically similar to the services
described by CPT codes 91037, 91120, 91122, and 91132, both from a
clinical and resource perspective, we believe that assignment to APC
5722 for the five codes is appropriate. We agree that assignment of
these services to APC 5722 would improve the clinical and resource
homogeneity of the services within the APC.
In summary, after consideration of the public comments, we are
finalizing the reassignment of CPT codes 91117 and 91122 to APC 5722.
The final APC and status indicator assignments for CPT codes 91117 and
91122 are found in Table 42 below. The final CY 2023 OPPS payment rates
for the codes can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with comment period for the SI meanings for all codes
reported under the OPPS. Both Addenda B and D1 are available via the
internet on the CMS website.
[[Page 71863]]
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25. Gastrointestinal Myoelectrical Activity Study (APC 5723)
For CY 2023, the CPT Editorial Panel created CPT code 0779T
(Gastrointestinal myoelectrical activity study, stomach through colon,
with interpretation and report) to describe the procedure associated
with the G-Tech Wireless Patch System, which collects electrical
signals from the stomach, intestine, and colon over multiple days,
which are then transmitted to a phone that stores the transmissions in
the cloud, where they are then processed by an algorithm that generates
a report based on the transmitted information.
CMS proposed to assign CPT code 0779T to APC 5733 (Level 3 Minor
Procedures) with a proposed payment rate of around $59. We note that
CPT code 0779T was listed as placeholder code X069T in Addendum B of
the proposed rule. The CPT and Level II HCPCS code descriptors that
appear in Addendum B are short descriptors and do not accurately
describe the complete procedure, service, or item. Therefore, we
included the 5-digit placeholder codes and long descriptors for the new
CY 2023 CPT codes in Addendum O to the proposed rule so that the public
could adequately comment on the proposed APCs and SI assignments.
Because CPT code 0779T is a new code effective January 1, 2023, we
included the 5-digit placeholder code and long descriptor in Addendum
O. We further stated in the proposed rule that the final CPT code
numbers would be included in this CY 2023 OPPS/ASC final rule with
comment period.
Comment: We received several comments on this proposal. Commenters,
including the device manufacturer, stated that the payment rate
associated with APC 5733 does not capture all of the costs associated
with providing the service described by CPT code 0779T. They indicated
that the G-Tech Wireless Patch System itself costs around $950. They
recommended that CMS reassign CPT code 0779T to either APC 5312 (Level
2 Lower GI Procedures) with a proposed payment rate of $1,059.06 or APC
5724 (Level 4 Diagnostic Tests and Related Services) with a proposed
payment rate of $939.61.
Response: While we agree with commenters that the proposed payment
rate for APC 5733 does not accurately capture the costs associated with
CPT code 0779T, we disagree with the APC assignments recommended by
commenters. Because the code is new, we have no historical cost
information on which to base an accurate payment for CPT code 0779T. As
with all new codes for which we lack pricing information, our policy
has been to assign the service to an existing APC based on input from a
variety of sources, including, but not limited to, review of the
clinical similarity of the service to existing procedures; input from
CMS medical advisors; and review of all other information available to
us. After further evaluation, we believe CPT code 0779T is more similar
to CPT codes 91022 (Duodenal motility (manometric) study) and 91040
(Esophageal balloon distension study, diagnostic, with provocation when
performed), both of which are assigned to APC 5723 (Level 3 Diagnostic
Tests and Related Services) with a proposed payment rate of $493.29.
Because we believe that CPT code 0779T has similar clinical and
resource characteristics as CPT codes 91022 and 91040, we are
reassigning the assignment to APC 5723 for CY 2023.
In summary, after consideration of the public comments, we are
finalizing the reassignment of CPT code 0779T to APC 5723. The final CY
2023 payment rate for this code can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
26. Hemodialysis Arteriovenous Fistula Procedures (APC 5194)
For CY 2019, based on two New Technology applications received by
CMS for hemodialysis arterviovenous fistula creation, CMS established
two new HCPCS codes to describe the surgical procedures associated with
the two technologies as no specific CPT codes existed. Specifically,
CMS established HCPCS codes C9754 for the Ellipsys System and C9755 for
the WavelinQ System effective January 1, 2019. For the July 2020
update, we deleted HCPCS codes C9754 and C9755 on June 30, 2020, and
replaced them with G-codes effective July 1, 2020, to enable physicians
to report the procedures when performed in the physician office
setting. Specifically, HCPCS code C9754 was deleted and replaced with
HCPCS Code G2170 (Percutaneous arteriovenous fistula creation (avf),
direct, any site, by tissue approximation using thermal resistance
energy, and secondary procedures to redirect blood flow (e.g.,
transluminal balloon angioplasty, coil embolization) when performed,
and includes all imaging and radiologic guidance, supervision and
interpretation, when performed) effective July 1, 2020.
[[Page 71864]]
Similarly, HCPCS code C9755 was deleted and replaced with HCPCS Code
G2171 (Percutaneous arteriovenous fistula creation (avf), direct, any
site, using magnetic-guided arterial and venous catheters and
radiofrequency energy, including flow-directing procedures (e.g.,
vascular coil embolization with radiologic supervision and
interpretation, wen performed) and fistulogram(s), angiography,
enography, and/or ultrasound, with radiologic supervision and
interpretation, when performed). In the CY 2021 OPPS/ASC final rule
with comment period (85 FR 85954 through 95955), we assigned HCPCS
codes G2170 and G2171 to APC 5194 (Level 4 Endovascular Procedures) for
CY 2021. We continued this APC assignment for CY 2022.
For the January 2023 update, the AMA's CPT Editorial Panel
established CPT code 36836 (Percutaneous arteriovenous fistula
creation, upper extremity, single access of both the peripheral artery
and peripheral vein, including fistula maturation procedures (e.g.,
transluminal balloon angioplasty, coil embolization) when performed,
including all vascular access, imaging guidance and radiologic
supervision and interpretation) to describe the Ellipsys System. In
addition to CPT code 36836, for the January 2023 update, the AMA's CPT
Editorial Panel established CPT code 36837 (Percutaneous arteriovenous
fistula creation, upper extremity, separate access sites of the
peripheral artery and peripheral vein, including fistula maturation
procedures (e.g., transluminal balloon angioplasty, coil embolization)
when performed, including all vascular access, imaging guidance and
radiologic supervision and interpretation) to describe the WavelinQ
System. With the implementation of new CPT codes 36836 and 36837, we
are deleting HCPCS codes G2170 and G2171 effective January 1, 2023.
Based on claims data available for the CY 2023 OPPS/ASC proposed rule,
the geometric mean cost of predecessor codes G2170 and G2171 was
$12,055.90 and $13,486.08, respectively. For the CY 2023 proposed rule,
based on our assessment of the geometric mean cost and APC assignment
of the predecessor codes, we proposed to assign CPT codes 36836 and
36837 to the same APC as the predecessor codes, APC 5194, with a
proposed payment amount of $17,495.14 for CY 2023. We note that CPT
code 36836 was listed as placeholder code 368X1 in the OPPS Addendum B
of the CY 2023 OPPS/ASC proposed rule. Additionally, CPT code 36837 was
listed as placeholder code 368X2 in the OPPS Addendum B of CY 2023
OPPS/ASC proposed rule. Because 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, we
included the 5-digit placeholder codes and long descriptors for the new
CY 2023 CPT codes in Addendum O to the proposed rule (which is
available via the internet on the CMS website) so that the public could
adequately comment on the proposed APCs and SI assignments. The 5-digit
placeholder codes were included in Addendum O, specifically under the
column labeled ``CY 2023 OPPS/ASC Proposed Rule 5-Digit AMA Placeholder
Code,'' to the proposed rule. We further stated in the proposed rule
that the final CPT code numbers would be included in this CY 2023 OPPS/
ASC final rule with comment period.
Comment: One commenter supported our proposal and recommending
finalizing our assignment to APC 5194 for CPT codes 36836 and 36837.
Response: We thank the commenter for their support. Based on our
review of claims data available for this final rule with comment
period, we believe an assignment to APC 5194 for CPT codes 36836 and
36837 is appropriate for CY 2023.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification and assigning CPT codes
36836 and 36837 to APC 5194 for CY 2023. The final CY 2023 OPPS payment
rate for the code can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with comment period for the status indicator (SI) meanings
for all codes reported under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website.
27. IB-Stim Application Service (APC 5724)
For the July 2022 update, the CPT Editorial Panel established CPT
code 0720T (Percutaneous electrical nerve field stimulation, cranial
nerves, without implantation) to describe the service associated with
the IB-Stim device, which received FDA De Novo marketing approval in
June 2019. The device is placed behind the patient's ear rather than
implanted, and is intended to be used in patients 11-18 years of age
with functional abdominal pain associated with irritable bowel syndrome
(IBS). For CY 2023, we proposed to assign CPT code 0720T to APC 5722
(Level 2 Diagnostic Tests and Related Services) with a proposed payment
rate of $285.63. We note that CPT code 0720T is a new code effective
July 1, 2022.
At the August 22, 2022 HOP Panel Meeting, a presenter provided
information to the Panel on the description of the service, the cost of
the IB-Stim kit, and the estimated total procedure cost. According to
the presenter, the total cost of the procedure is approximately $1,323,
which includes the cost of the IB-Stim kit ($1,195). At the conclusion
of the presentation, the presenter advised the Panel to request that
CMS reassign CPT code 0720T from APC 5722 to one of the following APCs:
5431: Level 1 Nerve Procedures (proposed payment rate
$1,829.84)
5312: Level 2 Lower GI Procedures (proposed payment rate
$1,102.72)
1515: New Technology--Level 15 ($1301-$1400) (proposed payment
rate $1,350.50)
Based on the information presented at the meeting, the Panel
recommended that CMS revise the payment and assign CPT code 0720T to
APC 1515 to account for the costs and resource utilization of providing
the service.
Comment: A commenter disagreed with the proposed assignment to APC
5722 and requested that CMS assign CPT code 0720T to APC 1515, as
recommended by the HOP Panel. The commenter stated that the IB-Stim
service is not similar, with respect to clinical and resource
homogeneity, to the procedures assigned to APC 5722. The commenter
explained that the IB-Stim service is therapeutic in nature, while the
procedures in APC 5722 are primarily diagnostic. In addition, the
resource cost associated with the procedures in APC 5722 is not as
significant as that of CPT code 0720T. The commenter noted that the IB-
Stim application code involves the use of an expensive device, which is
in contrast to the procedures in APC 5722 that have almost no device
costs. The commenter reiterated the cost information provided at the
August 22, 2022 HOP Panel Meeting and stated that the estimated
procedure cost for the service is approximately $1,323, which includes
the cost of the IB-Stim kit ($1,195). The commenter added that the most
clinically appropriate assignment is APC 5461 (Level 1 Neurostimulator
and Related Procedures), however, the proposed geometric mean cost of
the APC is high at $3,491. Because the code is new and there is not an
appropriate APC, both from a clinical and cost perspective, the
commenter stated that
[[Page 71865]]
assignment to New Technology APC 1515 would be the best option until
claims data becomes available, consistent with the recommendation of
the HOP Panel at the August 22, 2022 meeting.
Response: We rely upon historical hospital claims data to establish
the annual payment rates under the OPPS. Because the code is new, we
have no historical cost information on which to base an accurate
payment for CPT code 0720T. Also, it should be noted that with all new
codes for which we lack pricing information, our policy has been to
assign the service to an existing APC based on input from a variety of
sources, including, but not limited to, review of the clinical
similarity of the service to existing procedures; input from CMS
medical advisors; information from interested specialty societies; and
review of all other information available to us. The OPPS is a
prospective payment system that provides payment for groups of services
that share clinical and resource use characteristics. Based on our
assessment, we believe that the IB-Stim application service shares
similar clinical characteristics to the services assigned to APC 5722.
Consequently, we assigned CPT code 0720T to APC 5722 effective July 1,
2022.
As stated above, at the August 22, 2022 HOP Panel meeting, in lieu
of APC 5722, the presenter requested a reassignment to either APC 5431,
APC 5312, or APC 1515, whose proposed payment rate ranged between
approximately $1,103 and $1,830. During the meeting, the Panel
recommended that CMS reassign the code to New Technology APC 1515 with
a payment of approximately $1,351. Based on the HOP Panel
recommendation and comment, we reviewed the appropriateness of the
existing APC assignment and determined that New Technology APC 1515 may
overpay for the service. Consequently, we are not accepting the Panel's
recommendation to assign the code to APC 1515. We still believe that
CPT code 0720T has similar clinical characteristics as the services in
APC 5722; however, we acknowledge the estimated device cost of $1,195
for the IB-Stim kit, and we believe that APC 5724 (Level 4 Diagnostic
Tests and Related Services) with a geometric mean cost of about $961,
is the more appropriate assignment at this time. Therefore, we are
revising the APC assignment for CPT code 0720T from APC 5722 to APC
5724.
We note that every year, since the implementation of the OPPS on
August 1, 2000, we receive many requests from specialty associations,
device manufacturers, drug manufacturers, and consultants to increase
the reimbursement and ensure full payment for codes associated with
specific drugs, devices, services, and surgical procedures. Under the
OPPS, one of our goals is to make payments that are appropriate for the
items and services that are necessary for the treatment of Medicare
beneficiaries. The OPPS, like other Medicare payment systems, is budget
neutral and increases are generally limited to the annual payment
update factor. As a budget neutral payment system, the OPPS does not
pay the full hospital costs of services. Nevertheless, we believe that
our payment rates generally reflect the costs that are associated with
providing care to Medicare beneficiaries. Furthermore, we believe that
our payment rates are adequate to ensure access to services.
In summary, after consideration of the public comment, we are
finalizing assignment of CPT code 0720T to APC 5724. We note that we
review, on an annual basis, the APC assignments for all services and
items paid under the OPPS based on our analysis of the latest claims
data. The final CY 2023 OPPS payment rate for the code can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the status indicator (SI) meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website.
28. IDx-DR: Artificial Intelligence System To Detect Diabetic
Retinopathy (APC 5733)
For CY 2023, we proposed to continue to assign CPT code 92229
(Imaging of retina for detection or monitoring of disease; with point-
of care automated analysis with diagnostic report; unilateral or
bilateral) to APC 5733 (Level 3 Minor Procedures) with a proposed
payment rate of $58.50.
Comment: One commenter supported the continued assignment to APC
5733 with a status indicator of ``S'' and praised CMS for recognizing
the value of the service.
Response: We thank the commenter for their support.
After consideration of the public comment, we are finalizing our
proposal without modification. Specifically, we are finalizing our
proposal and assigning CPT code 92229 to APC 5733. The final CY 2023
payment rate for this code can be found in Addendum B to this final
rule with comment period. In addition, we refer readers to Addendum D1
of this final rule with comment period for the complete list of status
indicator meanings for all codes reported under the OPPS. Both Addendum
B and D1 are available via the internet on the CMS website.
29. Insertion of Bioprosthetic Valve (APC 5184)
For CY 2023, we proposed to assign CPT code 0744T (Insertion of
bioprosthetic valve, open, femoral vein, including duplex ultrasound
imaging guidance, when performed, including autogenous or nonautogenous
patch graft (e.g., polyester, ePTFE, bovine pericardium), when
performed) to APC 5184 (Level 4 Vascular Procedures) with a proposed
payment rate of $5,220.31. CPT code 0744T was listed as placeholder
code 0X13T in Addendum B of the proposed rule. The CPT and Level II
HCPCS code descriptors that appear in Addendum B are short descriptors
and do not accurately describe the complete procedure, service, or
item. Therefore, we included the 5-digit placeholder codes and long
descriptors for the new CY 2023 CPT codes in Addendum O to the proposed
rule so that the public could adequately comment on the proposed APCs
and SI assignments. Because CPT code 0744T is a new code effective
January 1, 2023, we included the 5-digit placeholder code and long
descriptor in Addendum O. We further stated in the proposed rule that
the final CPT code numbers would be included in this CY 2023 OPPS/ASC
final rule with comment period.
Comment: We received a single comment supporting our proposed APC
assignment.
Response: We thank the commenter for their support.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification and assigning CPT code
0744T (placeholder code 0X13T) to APC 5184. The final CY 2023 payment
rate for the code can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with comment period for the status indicator (SI) meanings
for all codes reported under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website.
30. InSpace Subacromial Tissue Spacer Procedure (APC 5115)
For CY 2023, we proposed to continue to assign HCPCS code C9781
(Arthroscopy, shoulder, surgical; with implantation of subacromial
spacer (e.g., balloon), includes debridement (e.g., limited or
extensive), subacromial decompression acromioplasty, and
[[Page 71866]]
biceps tenodesis when performed) to APC 5114 (Level 4 Musculoskeletal
Procedures) with a proposed payment rate of $6,721.24.
Comment: We received several comments from providers and the device
manufacturers requesting the reassignment of HCPCS code C9781 to APC
5115 (Level 5 Musculoskeletal Procedures) with a proposed payment rate
of $13,274.06. The device manufacturer alternatively requested the
reassignment of HCPCS code C9781 to APC 1575 (New Technology Level 38),
with a proposed payment rate of $12,500.50 or APC 5115 in order to
better reflect the costs of the procedure and resources used in the
procedure, including the cost of the implant. The device manufacturer
stated that the invoice for the device exceeds the proposed payment of
$6,397, and that the combined cost for both the procedure and device is
over $13,000. The device manufacturer asserted that the complete
procedure was not described by a CPT code prior to the creation of
HCPCS code C9781 and that HCPCS code C9781 includes multiple complex
procedures, including: CPT code 29823 (Arthroscopy, shoulder, surgical;
debridement, extensive, 3 or more discrete structures (e.g., humeral
bone, humeral articular cartilage, glenoid bone, glenoid articular
cartilage, biceps tendon, biceps anchor complex, labrum, articular
capsule, articular side of the rotator cuff, bursal side of the rotator
cuff, subacromial bursa, foreign body[ies])) and CPT code 29828
(Arthroscopy, shoulder, surgical; biceps tenodesis). The manufacturer
stated that the cost of CPT codes 29823 and 29828 plus the cost of the
InSpace implant align closely with the costs of other services in APC
5115. In support of this assertion, the device manufacturer submitted
additional cost data, including numerous invoices. Additionally,
commenters stated that HCPCS code C9781 is clinically similar to the
reverse shoulder reconstruction and repair procedures assigned to APC
5115.
Response: We thank the commenters for their recommendations. After
further evaluation of HCPCS code C9781, and additional review of the
clinical characteristics of the procedure, input from our medical
advisors, and the resources required to perform the procedure, we
believe it is appropriate to reassign HCPCS code C9781 to APC 5115
(Level 5 Musculoskeletal). Based on our evaluation of the additional
information provided to CMS on the cost of the device, we believe that
the resource cost associated with HCPCS code C9781 is higher than the
proposed payment for APC 5114. Therefore, we are revising the APC
assignment for HCPCS code C9781 for CY 2023.
In summary, after consideration of the public comments, we are
finalizing reassigning HCPCS code C9781 to APC 5115. The final CY 2023
OPPS payment rate for this code can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the SI meanings
for all codes reported under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website. For additional
discussion regarding the commenter's request to increase the device
offset, please refer to section IV.C. (Device-Intensive Procedures) of
this final rule.
31. Intervertebral Disc Allogenic Cellular and/or Tissue-Based Product
Percutaneous Injection (APC 5115)
For the January 2021 update, the AMA's CPT Editorial Panel
established four CPT codes to describe the VIA Disc NP procedure. The
long descriptors for the codes are listed below.
0627T: Percutaneous injection of allogeneic cellular and/or tissue-
based product, intervertebral disc, unilateral or bilateral injection,
with fluoroscopic guidance, lumbar; first level
0628T: Percutaneous injection of allogeneic cellular and/
or tissue-based product, intervertebral disc, unilateral or bilateral
injection, with fluoroscopic guidance, lumbar; each additional level
(list separately in addition to code for primary procedure)
0629T: Percutaneous injection of allogeneic cellular and/
or tissue-based product, intervertebral disc, unilateral or bilateral
injection, with ct guidance, lumbar; first level
0630T: Percutaneous injection of allogeneic cellular and/
or tissue-based product, intervertebral disc, unilateral or bilateral
injection, with ct guidance, lumbar; each additional level (list
separately in addition to code for primary procedure)
In the CY 2021 OPPS/ASC final rule with comment period, we
finalized an APC assignment to APC 5115 (Level 5 Musculoskeletal
Procedures) for CPT codes 0627T and 0629T. Additionally, we finalized a
status indicator of ``J1'' for CPT codes 0627T and 0629T. CPT codes
0628T and 0630T were assigned to status indicator ``N'' (packaged) to
indicate that payment for the add-on service described by the codes is
packaged. As discussed in the CY 2014 OPPS/ASC final rule (78 FR
74942), add-on codes are generally packaged under the OPPS. We
continued these APC assignments and status indicator assignments in CY
2022. For CY 2023, we proposed to continue to assign CPT codes 0627T
and 0629T to APC 5115 with a status indicator of ``J1''. Additionally,
we proposed to continue to assign a status indicator of ``N'' to CPT
codes 0628T and 0630T.
Comment: One commenter supported our proposed APC assignment of CPT
codes 0627T and 0629T. The commenter also recommended that we assign
device-intensive status to CPT code 0629T.
Response: We appreciate the commenter's recommendation and support
of our proposal. We refer readers to section IV.B of this final rule
with comment period for a discussion on device-intensive status
designations under the OPPS and section XIII.C.1.b of this final rule
with comment period for a discussion on device-intensive status
designations under the ASC payment system. Based on our review of
claims data available for this final rule with comment period, we
believe an assignment to APC 5115 for CPT codes 0627T and 0629T is
appropriate for CY 2023.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification and assigning CPT codes
0627T and 0629T to APC 5115 for CY 2023. We are also finalizing our
proposal to assign status indicator ``N'' under the OPPS to CPT codes
0628T and 0630T as the OPPS packaging policy packages the cost of an
add-on codes into the primary procedure. The final CY 2023 OPPS payment
rate for the codes can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with comment period for the status indicator (SI) meanings
for all codes reported under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website.
32. Magnetic Resonance-Guided Focused Ultrasound Surgery (MRgFUS) (APC
5463)
CPT code 0398T (Magnetic resonance image guided high intensity
focused ultrasound (mrgfus), stereotactic ablation lesion, intracranial
for movement disorder including stereotactic navigation and frame
placement when performed) describes MRgFUS procedures for the treatment
of essential tremor. Since CY 2021, CPT code 0398T has been assigned to
APC 5463 (Level 3 Neurostimulator and Related Procedures). For CY 2023,
we proposed to continue to assign CPT code 0398T to APC 5463 with a
proposed payment rate of $12,866.05.
[[Page 71867]]
Comment: Multiple commenters, including the manufacturer, requested
a higher paying APC for CPT code 0398T because the current payment rate
for APC 5463 of $12,866.05 is substantially lower than the geometric
mean cost of the service. According to the commenters, the geometric
mean cost for CPT code 0398T has steadily increased from $10,136 in CY
2018 to $18,119 in CY 2021.
Response: We appreciate the concerns of the commenters about the
level of payment for CPT code 0398T. However, the OPPS is a prospective
payment system and it is expected that any individual service may be
paid more or less than the geometric mean cost of the service. For CY
2023, the OPPS payment rates are based on our examination of the claims
data for this final rule. Based on claims submitted between January 1,
2021, and December 30, 2021, and processed through June 30, 2022, our
analysis supports the continued assignment of CPT code 0398T to APC
5463 based on its clinical and resource homogeneity to the procedures
and services in the APC. Specifically, our data show a geometric mean
cost of approximately $13,773 for CPT code 0398T based on 551 single
claims (out of 551 total claims), which is comparable to the geometric
mean cost of about $12,291 for APC 5463, rather than the geometric mean
cost of about $6,791 for APC 5462 or the geometric mean cost of
approximately $22,125 for APC 5464. We note that CPT code 0398T is
grouped with other neurostimulator and related procedures that have
clinical and resource similarity to the MRgFUS; and, based on our
analysis of the claims data, we believe that the code is appropriately
placed in APC 5463.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification and assigning CPT code
0398T to APC 5463 for CY 2023. The final CY 2023 payment rate for CPT
code 0398T can be found in Addendum B to this final rule with comment
period, which is available via the internet on the CMS website.
33. Medical Physics Dose (APC 5723)
For CY 2023, we proposed to continue to assign CPT code 76145
(Medical physics dose evaluation for radiation exposure that exceeds
institutional review threshold, including report) to APC 5612 (Level 2
Therapeutic Radiation Treatment Preparation) with a proposed payment
rate of $365.15. We previously discussed in the CY 2022 OPPS/ASC final
rule with comment period that we believed APC 5612 was an appropriate
placement for CPT code 76145, as APC 5612 contains CPT code 77307
(Teletherapy isodose plan; complex (multiple treatment areas,
tangential ports, the use of wedges, blocking, rotational beam, or
special beam considerations), includes basic dosimetry calculation(s)),
which we believed was clinically similar to CPT code 76145 in that CPT
code 77307 describes the work of a medical physicist and dosimetrist.
The full details of this assignment are discussed in the CY 2022 OPPS/
ASC final rule with comment period (86 FR 63557 through 63558).
We note that the issue of payment for this code was brought to the
Advisory Panel on Hospital Outpatient Payment (also known as HOP Panel)
in 2022 for the CY 2023 rulemaking, and a new APC placement was
requested by interested parties. At the August 22, 2022 meeting, the
Panel recommended that CMS assign HCPCS code 76145 to APC 1505 (New
Technology--Level 5 ($301-$400)).
Comment: Generally, commenters disagreed with the assignment to APC
5612 and requested a reassignment to APC 5724 (Level 4 Diagnostic Tests
and Related Services), with a proposed payment rate of $952.52.
Commenters further described the clinical process associated with this
code and stated that the services assigned to APC 5724 require similar
resource use as CPT code 76145. Commenters also stated that APC 5724
contains a range of services that are clinically similar to CPT code
76145 and asserted that CPT code 76145 is not a radiation oncology
code. Commenters also pointed to the Medicare Physician Fee Schedule
proposed CY 2023 payment of $907.65 for this service.
Commenters agreed with the HOP Panel that it would also be
appropriate to assign CPT code 76145 to a New Technology APC; however,
interested parties believe assignment to APC 1510 (New Technology Level
10 ($801-$900) would be more appropriate than the HOP Panel's
recommended APC placement.
Response: For CY 2023, the OPPS payment rates are based on claims
submitted between January 1, 2021, and December 30, 2021, processed
through June 30, 2022. CPT code 76145 was effective January 1, 2021,
however, based on our review, we have no claims data for the code.
After consideration of the comments, further evaluation of the service
associated with CPT code 76145, and input from our medical advisors, we
believe a revision of the APC assignment is appropriate. We agree that
assignment to APC 5612 is not appropriate based on commenters' clinical
description of the code, and instead, agree with interested parties
that the Diagnostic Tests and Related Procedures APC series is
appropriate. However, absent any claims data, we do not believe that
assignment to APC 5724 is appropriate. Based on our assessment, we
believe that CPT code 76145 fits more appropriately in APC 5723, rather
than APC 5724 or a New Technology APC. Consequently, we are not
accepting the HOP Panel recommendation because we believe that APC 5723
is the more appropriate APC assignment. Therefore, we are assigning CPT
code 76145 to APC 5723 for CY 2023. We note that we review our data on
an annual basis. Once we have claims data, we will determine whether a
change in the APC assignment is necessary.
In summary, after consideration of the public comments, we are
finalizing the reassignment of CPT code 76145 to APC 5723 for CY 2023.
The final CY 2023 payment rate for this code can be found in Addendum B
to this final rule with comment period. In addition, we refer readers
to Addendum D1 to this final rule with comment period for the SI
meanings for all codes reported under the OPPS. Both Addendum B and D1
are available via the internet on the CMS website.
34. Minimally Invasive Glaucoma Surgery (MIGS) (APC 5491)
For CY 2023, we proposed to continue to assign CPT code 0671T
(Insertion of anterior segment aqueous drainage device into the
trabecular meshwork, without external reservoir, and without
concomitant cataract removal, one or more) to APC 5491 (Level 1
Intraocular Procedures). Prior to CY 2022, this procedure was described
by CPT code 0191T (Insertion of anterior segment aqueous drainage
device, without extraocular reservoir, internal approach, into the
trabecular meshwork; initial insertion).
Comment: We received several comments requesting that we reassign
CPT code 0671T to APC 5492 (Level 2 Intraocular Procedures) based on
the claims data and APC assignment for its predecessor code, CPT code
0191T. Commenters also argued that CPT code 0671T is clinically similar
to several procedures in APC 5492. Additionally, this issue was
presented at the 2022 HOP Panel, with the Panel recommending CPT code
0671T be reassigned to APC 5492.
Response: We thank commenters for their feedback. We note that,
although CPT code 0191T has a geometric mean cost of $4,972.24 and was
placed in APC 5492, CPT code 0191T was predominantly reported with CPT
codes
[[Page 71868]]
66982 (Extracapsular cataract removal with insertion of intraocular
lens prosthesis (1-stage procedure), manual or mechanical technique
(e.g., irrigation and aspiration or phacoemulsification), complex,
requiring devices or techniques not generally used in routine cataract
surgery (e.g., iris expansion device, suture support for intraocular
lens, or primary posterior capsulorrhexis) or performed on patients in
the amblyogenic developmental stage; without endoscopic
cyclophotocoagulation) and 66984 (Extracapsular cataract removal with
insertion of intraocular lens prosthesis (1 stage procedure), manual or
mechanical technique (e.g., irrigation and aspiration or
phacoemulsification); without endoscopic cyclophotocoagulation). We
believe that some of the costs of the concurrent cataract removal may
be reflected in the geometric mean cost for CPT code 0191T. CPT code
0671T describes insertion of intraocular lens without concurrent
cataract removal and would never be billed alongside the cataract
removal procedures resulting in an overall reduction in resource costs
compared to CPT code 0191T. Based on our review of the clinical
characteristics of the procedure and input from our medical advisors,
we continue to believe that this service is more similar to the other
services in APC 5491 and that the resource cost for this standalone
procedure cannot be accurately compared to CPT code 0191T.
Consequently, we are not accepting the HOP Panel's recommendation to
reassign the code to APC 5492, and instead, we will continue to assign
the code to APC 5491 for CY 2023.
In summary, after consideration of the public comments, we are
finalizing our proposal, without modification, to continue to assign
CPT code 0671T to APC 5491. The final CY 2023 OPPS payment rates for
these codes can be found in Addendum B to this final rule with comment
period. In addition, we refer readers to Addendum D1 of this final rule
with comment period for the SI meanings for all codes reported under
the OPPS. Both Addendum B and D1 are available via the internet on the
CMS website.
35. Musculoskeletal Procedures (APCs 5111 Through 5116)
Prior to the CY 2016 OPPS, payment for musculoskeletal procedures
was primarily divided according to anatomy and the type of
musculoskeletal procedure. As part of the CY 2016 reorganization to
better structure the OPPS payments to utilize prospective payment
packages, we consolidated these individual APCs so that they became a
general Musculoskeletal APC series (80 FR 70397 through 70398).
In the CY 2018 OPPS/ASC final rule with comment period (82 FR
59300), we continued to apply a six-level structure for the
Musculoskeletal APCs because doing so provided an appropriate
distinction for resource costs at each level and provided clinical
homogeneity. However, we indicated that we would continue to review the
structure of these APCs to determine whether additional granularity
would be necessary. In the CY 2019 OPPS proposed rule (83 FR 37096), we
recognized that commenters had previously expressed concerns regarding
the granularity of the current APC levels and, therefore, requested
comment on the establishment of additional levels. Specifically, we
solicited comments on the creation of a new APC level between the
current Level 5 and Level 6 within the Musculoskeletal APC series.
While some commenters suggested APC reconfigurations and requested
changes to APC assignments, many commenters requested that we maintain
the current six-level structure and continue to monitor the claims data
as they become available. Therefore, in the CY 2019 OPPS/ASC final rule
with comment period, we maintained the six-level APC structure for the
Musculoskeletal Procedures APCs (83 FR 58920 through 58921).
Based on the claims data available for the CY 2023 OPPS/ASC
proposed rule, we continued to believe that the six level APC structure
for the Musculoskeletal Procedures APC series is appropriate and we
proposed to maintain it for the CY 2023 OPPS update.
Comment: One commenter requested that CPT codes 28297 (Correction,
hallux valgus (bunionectomy), with sesamoidectomy, when performed; with
first metatarsal and medial cuneiform joint arthrodesis, any method)
and 28740 (Arthrodesis, midtarsal or tarsometatarsal, single joint) be
reassigned from APC 5114 to APC 5115. The commenters noted that these
procedures would cause two times rule violations if the codes were cost
significant, which the commenters believed they might be at the time of
the final rule.
Response: We appreciate the commenter's recommendation regarding
the APC assignment of CPT 28297 and 28740. CPT codes 28297 and 28740
are currently assigned to APC 5114 (Level 4 Musculoskeletal
Procedures). We note that APC 5114 does not currently have a 2 times
rule violation in the final rule data. In addition, both CPT codes
28297 and 28740 do not meet the requirements for cost significance for
2 times rule purposes, under the requirements described in section
III.B.2. of this final rule with comment period. We have reviewed the
codes' geometric mean cost based on the available CY 2021 claims data
as well as their clinical similarity to other codes within APC 5114 and
believe that their current APC assignment continues to be appropriate.
Comment: A commenter requested that CMS reassign CPT code 23472
(Arthroplasty, glenohumeral joint; total shoulder (glenoid and proximal
humeral replacement (e.g., total shoulder))) from APC 5115 to APC 5116,
based on the hospital resources associated with the procedure as well
as its estimated cost.
Response: CPT code 23472 had a proposed CY 2023 OPPS assignment to
APC 5115. In the claims data available for final CY 2023 OPPS
ratesetting, APC 5115 has a range of HCPCS geometric mean costs for
cost significant codes from approximately $10,554.18 to $17,441.14.
While we note that the geometric mean cost of this CPT code is at the
higher end of the cost range, we believe that its placement in APC 5115
remains appropriate based on its clinical similarity to other codes in
the APC. As a result, we are finalizing the proposed assignment of CPT
code 23472 to APC 5115. However, we will continue to review the claims
and cost data for these APCs.
After consideration of the comments, we are finalizing our proposal
without modification. The final CY 2023 OPPS payment rate for the codes
can be found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the status indicator (SI) meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
36. 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
[[Page 71869]]
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 interested parties 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 the CY 2023 OPPS/ASC proposed rule, we believed 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 was $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 was
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 any individual 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 did not propose any changes in the CY 2023 OPPS/ASC
proposed rule to the 5-level structure of the Neurostimulator and
Related Procedures APC series, we recognized the interested parties'
concerns regarding the granularity of the current APC levels and their
request to create an additional level to address such concerns.
Accordingly, we solicited 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 (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 (e.g., vagus
nerve) neurostimulator electrode array and pulse generator.
In summary, for CY 2023, we proposed to maintain the current 5-
level structure for the Neurostimulator and Related Procedure APC
series. However, we also solicited comment on the creation of an
additional Level 6 APC in the series from the current Level 5 APC.
Comment: Several commenters supported the creation of a Level 6
Neurostimulator and Related Procedures APC, believing that doing so
would provide better payment specificity and support access to those
procedures. However, others commenters recommended that we maintain the
current 5 level APC structure, believing that it continues to remain
appropriate and sufficient until claims data suggest otherwise. Several
commenters also requested that HCPCS code 0424T be temporarily assigned
to New Technology APC 1581, which has a proposed and final OPPS payment
rate of $55,000.50. These commenters believed that doing so would
provide appropriate and consistent payment and support beneficiary
access for the new procedure until such time as sufficient claims data
were available for ratesetting purposes. Finally, a commenter requested
that there be transparency around the ratesetting methodology so that
the public can also reproduce the OPPS rates.
Response: We appreciate the concerns of the commenters and the
different issues that they have raised. In reviewing the claims data
available for OPPS ratesetting in this final rule, we continue to
believe that the 5-level APC structure remains appropriate based on
clinical and cost characteristics. However, we also recognize that for
CPT code 0424T there remains a significant difference between its
geometric mean cost and that of the APC. As a result, we agree that a
temporary placement in New Technology APC 1581, which has a CY 2023
OPPS payment rate of $50,000.50, is appropriate. We note that we will
continue to monitor the claims data available for CPT code 0424T as
well as the APC more broadly and reevaluate and potentially reconfigure
it as is appropriate. With regard to transparency around the
ratesetting process, we do make several data files related to each
proposed and final rulemaking cycle available via the internet on the
CMS website. We also refer readers to the claims accounting
narrative(s) under supporting documentation for the proposed and final
rules on the CMS Website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html to the CY 2022
OPPS/. That document describes the process through which we establish
the OPPS rates for each proposed and final rulemaking cycle.
After consideration of the public comments we received, we are
finalizing our proposal to maintain the 5-level structure of the
Neurostimulator and Related Procedure APC series and reassigning CPT
code 0424T to New Tech APC 1581 in the CY 2023 OPPS. Table 43 list the
final geometric mean cost for the Neurostimulator and Related
Procedures APCs.
[[Page 71870]]
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37. Optilume Cystourethroscopy (APC 5374)
The Optilume cystourethroscopy is intended to treat urethral
stricture disease. The procedure, represented by CPT code 0499T
(Cystourethroscopy, with mechanical dilation and urethral therapeutic
drug delivery for urethral stricture or stenosis, including
fluoroscopy, when performed), became effective in January 2018. The
procedure involves the use of a semi-compliant inflatable balloon that
expands to create micro-fissures in the stricture to deliver the drug
paclitaxel. Paclitaxel works as an anti-proliferative drug that stops
new tissue growth and prevents fibrotic scarring that may result in
stricture recurrence.
For CY 2023, we proposed to delete CPT code 0499T. We note that in
the OPPS Addendum B of the CY 2023 OPPS/ASC proposed rule, the code is
assigned to status indicator ``D'' (Discontinued Codes) to indicate
that the code would be deleted at the end of the year. For CY 2022, the
code is assigned to APC 5374 (Level 4 Urology and Related Services).
Comment: A commenter explained that CPT code 0499T would be deleted
on December 31, 2022, with no replacement code. The commenter requested
that CMS establish a new temporary HCPCS C-code to replace CPT code
0499T and expressed concern that the lack of a specific HCPCS code
would disrupt payment for the cystourethroscopy procedure. The
commenter also requested the reassignment of CPT code 0499T to APC 5375
(Level 5 Urology and Related Services; proposed payment rate of
$4,783.70), and argued that the current payment for APC 5374 does not
reimburse the facility for the cost of furnishing the procedure. The
commenter estimated that the total cost to perform the Optilume
cystourethroscopy is about $5,454 and the device alone is $2,395. The
commenter contended that the device was not commercially available
until January 2022, so the current cost data reflected in the proposed
rule only reflects the clinical costs of the Optilume pivotal clinical
trial and not the actual cost of providing the procedure in the HOPD
setting.
Additionally, the commenter requested a device offset adjustment of
50 percent of APC 5375, citing a device cost of $2,395, which exceeds
the 31 percent device offset threshold. The commenter further added
that, based on the assignment to APC 5374, the device cost is more than
76 percent of the procedure cost.
Response: The CPT Editorial Summary of Panel Actions September
2022, which was published on October 14, 2022 on the AMA website
indicates that the CPT Editorial Panel rescinded the sunset of 0499T,
therefore negating the necessity of a temporary HCPCS code for 0499T
for CY 2023.
While we are sympathetic to the commenter's argument that the
current data reflect the clinical costs of the Optilume pivotal
clinical trial, we believe that the current assignment to APC 5374 is
appropriate. Our analysis of the claims data for this final rule with
comment period reveal a geometric mean cost of about $2,583 based on 16
single claims (out of 16 total claims) for CPT code 0499T, which is
consistent with the geometric mean cost of about $3,296 for APC 5374,
rather than the geometric mean cost of approximately $4,836 for APC
5375. For the device offset amount for CPT 0499T, we direct readers to
section IV.B of this final rule with comment period for a more detailed
discussion.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification, and assigning CPT code
0499T to APC 5374 for CY 2023. The final APC and status indicator
assignment for CPT code 0499T is found in Table 44. The final CY 2023
OPPS payment rate for the code can be found in Addendum B to this final
rule with comment period. In addition, we refer readers to Addendum D1
of this final rule with comment period for the SI meanings for all
codes reported under the OPPS. Both Addenda B and D1 are available via
the internet on the CMS website.
[[Page 71871]]
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38. Pathology Services (APC 5672)
The CPT Editorial Panel created CPT code 88121 (Cytopathology, in
situ hybridization (eg, FISH), urinary tract specimen with morphometric
analysis, 3-5 molecular probes, each specimen; using computer-assisted
technology) to describe in situ hybridization testing using urine
samples, effective January 1, 2011. For CY 2023, we proposed to
reassign CPT code 88121 from APC 5673 (Level 3 Pathology) to APC 5672
(Level 2 Pathology) with a proposed payment rate of $160.44.
Comment: Some commenters emphasized that the proposed change
represents a 46 percent decrease in the payment amount. While not
reflected in the OPPS cost data, commenters assert that the costs
associated with the service reported for CPT code 88121 is nearly three
times the cost of an APC 5672 ``Level 2 Pathology'' service, based on
physician fee schedule technical component cost differences. Commenters
state that this proposed reassignment creates a resource cost rank
order anomaly with other physician services, and the technical costs
will not be fully recovered from each unit of service. Another
commenter expressed concern that flawed data led to this change in APC
level for CPT code 88121. The commenters requested that CMS maintain
the assignment of CPT code 88121 to APC 5673 for CY 2023 and preserve
access to this test that is used to detect bladder cancer for Medicare
beneficiaries.
Response: Based on our analysis of the claims data for this CY 2023
OPPS/ASC final rule with comment period, our data reveals a geometric
mean cost of about $175.28 for CPT code 88121 based on 1,423 single
claims (out of 1,834 total claims), which is in line with the geometric
mean cost of $161.71 for APC 5672 rather than the geometric mean cost
of $333.29 for APC 5673. We believe that continuing to assign CPT code
to APC 5673 would significantly overpay for the procedure.
With respect to the flawed data issue, we rely upon historical
hospital claims data to establish the annual payment rates under the
OPPS. Based on our review of the claims data associated with CPT code
88121, we have no reason to believe that the service is miscoded. In
addition, based on our analysis of the CY 2023 claims data used for
this final rule with comment period, we are unable to determine whether
facilities are misreporting the service. It is generally not our policy
to judge the accuracy of provider coding and charging for purposes of
ratesetting. We rely on hospitals and providers to accurately report
the use of HCPCS codes in accordance with their code descriptors and
CPT and CMS instructions and to report services accurately on claims
and charges and costs for the services on their Medicare hospital cost
report.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification to assign CPT code 88121
to APC 5672. The final CY 2023 OPPS payment rate for the code can be
found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the status indicator (SI) meanings for all codes
reported under the OPPS. Both Addendum B and D1 are available via the
internet on the CMS website.
39. Percutaneous Arthrodesis of the Sacroiliac Joint (APC 5116)
In 2015, the CPT Editorial Panel established CPT code 27279 to
describe the procedure associated with a percutaneous arthrodesis of
the sacroiliac joint that involves placement of a transfixing device.
Prior to 2015, the procedure was reported with CPT code 0334T
(Sacroiliac joint stabilization for arthrodesis, percutaneous or
minimally invasive (indirect visualization), includes obtaining and
applying autograft or allograft (structural or morselized), when
performed, includes image guidance when performed (eg, ct or
fluoroscopic)), which was effective July 1, 2013, and deleted December
31, 2014, when it was replaced with CPT code 27279 effective January 1,
2015.
For CY 2023, the CPT Editorial Panel established new CPT code
0775T, effective January 1, 2023, to describe a percutaneous
arthrodesis of the sacroiliac joint that involves placement of an
intra-articular implant, such as a bone allograft or synthetic
device(s). The long descriptors for both CPT code 27279 and 0775T are
listed in Table 45. The CPT 2023 code book clarifies the reporting of
the new code, specifically, CPT code 0775T, and states that the new
code should be reported when the procedure involves an implantable
device that ``does not transfix the sacroiliac joint,'' while existing
CPT code 27279 should be reported in cases that involve an implantable
device that does transfix the sacroiliac joint. The CPT code book
further states that the unlisted CPT code 27299 (Unlisted procedure,
pelvis or hip joint) should be reported when the percutaneous
arthrodesis of the sacroiliac joint involves the use of both a
transfixation device and an intra-articular implant(s).
As listed in Table 45, for CY 2023, we proposed to continue to
assign CPT code 27279 to APC 5116 (Level 6 Musculoskeletal Procedures).
We also proposed to assign new CPT code 0775T, which was listed as
placeholder code X034T in Addendum B of the CY 2023 OPPS/ASC proposed
rule, to the same APC. We note that the CPT and Level II HCPCS code
descriptors that appear in Addendum B are short descriptors and do not
accurately describe the complete procedure, service, or item.
Therefore, we included the 5-digit placeholder codes and long
descriptors for the new CY 2023 CPT
[[Page 71872]]
codes in Addendum O to the proposed rule so that the public could
adequately comment on the proposed APCs and SI assignments. Because CPT
code 0775T is a new code effective January 1, 2023, we included the 5-
digit placeholder code and long descriptor in Addendum O. We further
stated in the proposed rule that the final CPT code numbers would be
included in this CY 2023 OPPS/ASC final rule with comment period. We
received some comments on the proposed APC assignment for CPT code
0775T.
[GRAPHIC] [TIFF OMITTED] TR23NO22.060
Comment: A few commenters disagreed with the proposed assignment to
APC 5116 for CPT code 0775T. They indicated that the resources to
perform the procedure are not as significant as the procedure described
under existing CPT code 27279, and suggested lowering the payment for
the procedure by reassigning the code to APC 5115 (Level 5
Musculoskeletal Procedures), which has a proposed payment of
$13,274.06. The commenters added that until CMS has sufficient claims
data, APC 5115 is the more appropriate assignment for CPT code 0755T,
and that finalizing the proposal to APC 5116 would result in
overpayment for the procedure. One commenter listed the clinical
differences between the two procedures, specifically with regard to
procedure time, anesthesia, staffing requirements, recovery time, and
device costs. The commenter stated that CPT code 27279 is a procedure
that often takes 60 minutes to perform, requires a 3-5 cm incision,
involves the use of general anesthesia, uses up to three implants, may
require both assistants at surgery and co-surgeons, and requires
several hours of post-operative recovery for pain control and
mobilization. In contrast, CPT code 0775T is a procedure that takes
between 20 to 30 minutes to perform, requires a 1-2 cm incision,
involves local anesthesia, requires only a single bone allograft or
implant, does not require co-surgeons or assistants at surgery, and
typically involves minimal to no post-operative recovery period. Based
on these differences, the commenter strongly urged CMS to lower the
payment for the procedure and modify the assignment for CPT code 0775T
from APC 5116 to APC 5115.
Alternatively, several commenters reported that the new code,
specifically, CPT code 0775T (posterior approach), shares similar
resources and characteristics with existing CPT code 27279 (lateral
approach), and, therefore, should be placed in the same APC. The
commenters explained that prior to the establishment of CPT code 0775T,
the procedure was reported for more than five years with CPT code
27279. The same commenters stated that CPT code 0775T utilizes the same
pre, post, and intra operative resources as the procedure described
under existing CPT code 27279. According to the commenters, CPT code
0775T shares these similar characteristics with existing CPT code
27279: requires 1 to 1.5 hours of procedure time, involves the use of
general anesthesia or MAC sedation, utilizes the same fluoroscopy time
under indirect visualization, involves the same anatomical space (SI
joint for fusion), and utilizes similar sites of service--both are
performed in the HOPD and ASC settings. The commenter added that the
estimated cost to perform the surgery associated with CPT code 0775T is
approximately $14,379. Based on its similarity to existing CPT code
27279, the commenters urged CMS to finalize the proposal to APC 5116
for CPT code 0775T.
Response: Based on the information submitted to CMS for CPT codes
27279 and 0775T, and based on our understanding of the procedures, we
believe that we should assign CPT code 0775T to APC 5116. While we are
unable to confirm whether the service described by CPT code 0775T was
previously billed with CPT code 27279, we believe that the new code
(CPT code 0775T) does share some clinical similarities to the
procedures assigned to APC 5116. Therefore, we believe it would be
appropriate to assign CPT code 0775T to APC 5116. We note that if a
procedure, service, or item is not described by any specific code, the
unlisted code should be reported. In the case of new CPT code 0775T, if
it was not described by any specific HCPCS
[[Page 71873]]
code prior to its establishment, we believe that HOPD facilities would
have likely reported the procedure under an unlisted code (e.g., 22899,
27299, etc.).
Because the code is new for 2023, we currently do not have any
claims data for CPT code 0775T. However, as we have stated several
times since the implementation of the OPPS on August 1, 2000, we
review, on an annual basis, the APC assignments for all services and
items paid under the OPPS based on our analysis of the latest claims
data. We will review our claims data in the next rulemaking cycle, and
if appropriate, revise the APC assignment for CPT code 0775T.
In summary, after consideration of the public comments, we are
finalizing our assignment to APC 5116 for CPT code 0775T. We did not
receive any comments on the APC or SI assignment for CPT code 27279,
therefore, we are finalizing our proposal for the code. Table 46 lists
the final APC and SI assignments for CPT codes 27279 and 0775T for CY
2023. The final CY 2023 payment rates for both codes can be found in
Addendum B to the CY 2023 OPPS/ASC proposed rule with comment period.
In addition, we refer readers to Addendum D1 of the CY 2023 OPPS/ASC
final rule with comment period for the status indicator (SI) meanings
for all codes reported under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR23NO22.061
40. Placement of Breast Localization Devices (APCs 5071 and 5072)
For CY 2023, we proposed to assign CPT code 19281 (Placement of
breast localization device(s) (e.g., clip, metallic pellet, wire/
needle, radioactive seeds), percutaneous; first lesion, including
mammographic guidance)) to APC 5072 (Level 2 Excision/Biopsy/Incision
and Drainage Procedures) with a proposed payment rate of $1,520.37 and
proposed to continue to assign CPT codes 19283 (Placement of breast
localization device(s) (e.g., clip, metallic pellet, wire/needle,
radioactive seeds), percutaneous; first lesion, including stereotactic
guidance), 19285 (Placement of breast localization device(s) (e.g.,
clip, metallic pellet, wire/needle, radioactive seeds), percutaneous;
first lesion, including ultrasound guidance), and code 19287 (Placement
of breast localization device(s) (e.g., clip, metallic pellet, wire/
needle, radioactive seeds), percutaneous; first lesion, including
magnetic resonance guidance) to APC 5071 (Level 1 Excision/Biopsy/
Incision and Drainage Procedures) with a proposed payment rate of
$659.86.
Comment: Several commenters shared their support for the
reassignment of CPT code 19281 to APC 5072 while also requesting the
reassignment of CPT codes 19283-19287 to APC 5072 in order to maintain
clinical and resource homogeneity with CPT code 19281. The commenters
stated that the procedures varied only by the type of guidance utilized
and argued that reassigning these services to APC 5072 would avoid
discrepancies in imaging guidance driven by payment assignments.
Commenters also stated that CPT codes 19281 through 19287 were
clinically similar to a series of percutaneous image-guided breast
biopsy procedures that also vary by type of guidance, CPT codes 19081
(Biopsy, breast, with placement of breast localization device(s) (e.g.,
clip, metallic pellet), when performed, and imaging of the biopsy
specimen, when performed, percutaneous; first lesion, including
stereotactic guidance) through 19086 (Biopsy, breast, with placement of
breast localization device(s) (e.g., clip, metallic pellet), when
performed, and imaging of the biopsy specimen, when performed,
percutaneous; each additional lesion, including magnetic resonance
guidance (List separately in addition to code for primary procedure)).
Response: We thank the commenters for their support of our
reassignment of CPT code 19281 to APC 5072. CPT code 19281 was
reassigned due to a violation of the 2 times rule in APC 5071, as it
met the criteria required for an exception under the 2 times rule. More
specifically, to address the violation of the 2 times rule and improve
clinical and resource homogeneity, we proposed to reassign CPT code
19281 to APC 5072 to optimize clinical and resource cost homogeneity,
given the available claims data.
Based on our review of the cost and utilization data and input from
our clinical advisors, we disagree with the suggestions to reassign CPT
code 19283, CPT code 19285, and CPT code 19287 to APC 5072 and believe
that APC 5071
[[Page 71874]]
better accounts for the cost of the procedure as well as the resources
used. Our claims data for CPT codes 19283, 19285, and 19287,
demonstrate that their geometric mean cost is consistent with APC 5071,
whose geometric mean cost ranges between $476 and $1,032, rather than
with APC 5072, whose geometric mean cost ranges between $1,192 and
$2,372. Specifically, our data shows a geometric mean cost of
approximately $1,032 for CPT code 19283 based on 1,167 single claims, a
geometric mean cost of about $1,027 for CPT code 19285 based on 8,204
single claims, and a geometric mean cost of about $715 for CPT code
19287 based on 62 single claims. As we do every year, we will review
the APC assignments for all services and items paid under the OPPS.
Consequently, we will continue to monitor the claims data for APC 5071
and APC 5072 as they become available.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification to assign CPT code 19281
to APC 5072 and CPT code 19283, CPT code 19285, and CPT code 19287 to
APC 5071. The final CY 2023 payment rate for these codes can be found
in Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the SI meanings for all codes reported under the OPPS. Both Addendum B
and D1 are available via the internet on the CMS website.
41. ProSense Cryoablation Procedure (APC 5091)
For CY 2023, we proposed to continue to assign CPT code 0581T
(Ablation, malignant breast tumor(s), percutaneous, cryotherapy,
including imaging guidance when performed, unilateral) to status
indicator ``E1'' to indicate that the code is not covered by Medicare
and not paid by Medicare when submitted on outpatient claims (any
outpatient bill type).
Comment: A commenter disagreed with the proposed status indicator
and requested a reassignment to APC 5092 (Level 2 Breast/Lymphatic
Surgery and Related Procedures) with a proposed payment rate of
$6,027.41. The commenter reported that the device
(ProSenseTM Cryoablation System) associated with the
procedure received FDA 510(k) marketing approval on December 20, 2019,
and also received FDA Breakthrough Device Designation on March 31,
2021. The commenter reported an estimated cost of approximately $7,016
for the procedure, which includes the cost of the $2,200 single-use
cryoprobe device. Based on the estimated cost for the procedure, the
commenter suggested assigning the code to APC 5092 rather than APC 5091
since the resource costs are comparable to APC 5092.
Response: For CY 2023, we did not include the claims data in our
ratesetting process because CPT code 0581T was previously assigned to
status indicator ``E1'' under the OPPS. We do note that the FDA 510(k)
marketing approval (K183213) for the device associated with CPT code
0581T indicates that the device is used in a wide variety of surgical
applications. Specifically, the FDA marketing approval indicates that
the device is indicated for use in ``general surgery, dermatology,
neurology (including cryoanalgesia), thoracic surgery, ENT, gynecology,
oncology, proctology, and urology.'' Because of its variable
applicability to other procedures unrelated to breast cryotherapy, and
the 2019 FDA approval, we believe that the device cost may already be
reflected in our payment for the other procedures. CPT code descriptors
are general in nature and not specific to a particular product, so the
device may be used in surgical procedures that are described by
existing cryotherapy and cryoablation procedures CPT codes (e.g.,
20983, 32994, 47383, 50593, etc.). Consequently, we do not believe that
assignment to APC 5092 would be appropriate. However, based on our
analysis of the estimated resource cost, as well as our review of the
clinical characteristics of the procedure and input from our medical
advisors, we believe that CPT code 0581T should be assigned to APC 5091
(Level 1 Breast/Lymphatic Surgery and Related Procedures Contrast)
because of its clinical similarity to the procedures in the APC. We
believe that assignment to APC 5091 is more appropriate than assignment
to APC 5092, and adequately reflects the resources associated with
providing the service. We note that we review, on an annual basis, the
APC assignments for all services and items paid under the OPPS. We will
reevaluate the APC assignment for CPT code 0581T once we have hospital
outpatient claims data and, if appropriate, reassign and/or restructure
the APC assignment.
In summary, after consideration of the public comment, we are
finalizing assignment of CPT code 0581T to APC 5091 for CY 2023. The
final CY 2023 payment rate for the code can be found in Addendum B to
this final rule with comment period. In addition, we refer readers to
Addendum D1 to this final rule with comment period for the status
indicator meanings used under the OPPS. Both Addendum B and D1 are
available via the internet on the CMS website.
42. Pulmonary Rehabilitation Services (APC 5731)
For CY 2023, we proposed to continue to assign HCPCS codes G0237
(Therapeutic procedures to increase strength or endurance of
respiratory muscles, face to face, one on one, each 15 minutes
(includes monitoring)) and G0238 (Therapeutic procedures to improve
respiratory function, other than described by G0237, one on one, face
to face, per 15 minutes (includes monitoring)) to APC 5731 (Level 1
Minor Procedures) with a proposed payment rate of $14.00. We also
proposed to exclude claims data from C9803 (Hospital outpatient clinic
visit specimen collection for severe acute respiratory syndrome
coronavirus 2 (sars-cov-2) (coronavirus disease [covid-19]), any
specimen source) from the calculation of the rate for APC 5731 as it is
a high-volume but temporary code for the duration of the Public Health
Emergency for COVID-19. However, we inadvertently included the claims
data in ratesetting for the CY 2023 OPPS/ASC proposed rule, and so the
proposed CY 2023 OPPS payment rate did not properly reflect that
proposal.
At the August 22, 2022 HOP panel meeting a presenter requested that
CMS split APC 5731 into two separate APC categories to ensure a more
representative payment for the pulmonary rehabilitation services
described by HCPCS codes G0237 and G0238. The presenter stated that the
payment rate associated with APC 5731 did not accurately capture the
resources associated with HCPCS codes G0237 and G0238, which have a
geometric mean cost of $28.76 and $26.91, respectively.
The HOP Panel supported removing HCPCS code C9803 from APC 5731 and
recommended recalculating the payment rates for the remaining services
in APC 5731.
Comment: A few commenters expressed concern over the proposed
payment rate for APC 5731, noting that the presence of claims data for
HCPCS code C9803 distorts the overall rate associated with APC 5731.
These commenters noted that one solution would be to exclude the claims
data associated with HCPCS code C9803 from the calculation of the
payment rate for APC 5731. However, they also expressed concern that
keeping HCPCS code C9803 in APC 5731 while excluding the claims data
associated with this service from the calculation of the payment rate
would result in a significant overpayment for HCPCS
[[Page 71875]]
code C9803. Another option according to commenters would be to split
APC 5731 into two APCs. These commenters were concerned over the impact
the payment rate for APC 5731 would have on pulmonary rehabilitation
services.
Response: We thank commenters for their concerns and refer them to
section X.D. (Use of Claims Data for CY 2023 OPPS and ASC Payment
System Ratesetting) of this final rule with comment period for a
discussion of our finalized policy to exclude claims data associated
with HCPCS code C9803 from the calculation of the payment rate for APC
5731.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification. Specifically, we are
continuing to assign HCPCS codes G0237 and G0238 to APC 5731. The final
CY 2023 payment rate for the codes can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
43. Remote Physiologic Monitoring Services
For CY 2023, we proposed to continue to assign a status indicator
of ``B'' to CPT codes 99457 (Remote physiologic monitoring treatment
management services, clinical staff/physician/other qualified health
care professional time in a calendar month requiring interactive
communication with the patient/caregiver during the month; first 20
minutes) and 99458 (Remote physiologic monitoring treatment management
services, clinical staff/physician/other qualified health care
professional time in a calendar month requiring interactive
communication with the patient/caregiver during the month; each
additional 20 minutes (list separately in addition to code for primary
procedure)).
Comment: We received a comment requesting that CMS revise the
status indicators for these two services to ``S'' (Procedure or
Service, Not Discounted When Multiple) and assign them to either APC
5821 (Level 1 Health and Behavior Services) or 5822 (Level 2 Health and
Behavior Services) with proposed payment rates of $30.21 or $76.98,
respectively. These commenters stated that making these services
separately payable will increase access to RPM in the HOPD setting.
Response: As stated in the CY 2021 OPPS/ASC final rule with comment
period, we assigned CPT codes 99457 and 99458 to status indicator ``B''
(Codes that are not recognized by OPPS when submitted on an outpatient
hospital Part B bill type (12x and 13x). Not paid under OPPS.)
effective March 1, 2020, to enable Critical Access Hospitals (CAHs) to
bill under CAH's Method II for the service so that claims with this
code would process appropriately in the Integrated Outpatient Code
Editor (IOCE) (85 FR 85977-85979). We continue to believe that, since
CPT code 99457 primarily describes the work associated with the billing
of professional services, which would not be paid separately under the
OPPS, and CPT code 99458 describes an add-on service to CPT code 99457,
neither service is appropriate for separate payment under the OPPS.
Therefore, we will continue to assign these codes to status indicator
``B'' for CY 2023.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification. Specifically, we are
continuing to assign HCPCS codes 99457 and 99458 to status indicator
``B'' for CY 2023. We refer readers to Addendum D1 of this final rule
with comment period for the status indicator (SI) meanings for all
codes reported under the OPPS. Addendum D1 is available via the
internet on the CMS website.
44. Repair of Nasal Valve Collapse (APC 5165)
For CY 2023, the CPT Editorial Panel created a new code, CPT code
30469 (Repair of nasal valve collapse with low-energy, temperature-
controlled based (i.e., radiofrequency) subcutaneous/submucosal
remodeling), effective January 1, 2023, to describe minimally-invasive
coagulation of soft tissue in the nasal airway to treat nasal airway
obstruction. For CY 2023, we proposed to assign CPT code 30469 to a
status indicator of ``S'' (Procedure or Service, Not Discounted When
Multiple) and to APC 5164 (Level 4 ENT Procedures) with a proposed
payment rate of $2,896.26. We note that CPT code 30469 was listed as
placeholder code 37X01 in Addendum B of the CY 2023 OPPS/ASC proposed
rule. In addition, the CPT and Level II HCPCS code descriptors that
appear in Addendum B are short descriptors and do not accurately
describe the complete procedure, service, or item. Therefore, we
included the 5-digit placeholder codes and long descriptors for the new
CY 2023 CPT codes in Addendum O to the CY 2023 OPPS/ASC proposed rule
so that the public could adequately comment on the proposed APCs and SI
assignments. Because CPT code 30469 is a new code effective January 1,
2023, we included the 5-digit placeholder code and long descriptor in
Addendum O. We further stated in the proposed rule that the final CPT
code numbers would be included in this final rule with comment period.
Comment: We received several comments on the proposed APC
assignment for CPT code 30469. These commenters requested that CMS
reassign CPT code 30469 to APC 5165 (Level 5 ENT Procedures), which has
a proposed payment rate of $5,377.70. Commenters stated that CPT code
30469 is clinically similar to CPT code 30468 (Repair of nasal valve
collapse with subcutaneous/submucosal lateral wall implant) in that
both procedures involve the bilateral repair of nasal valve collapse
with similar surgical approaches, and, when performed in the hospital
outpatient setting, virtually identical non-physician staffing,
preparation, operating room requirements, supplies, trays, scopes,
anesthesia, post-operative care, and other costs. Commenters also
stated that CPT code 30469 is comparable to CPT code 69705
(Nasopharangoscopy, surgical, with dilation of eustachian tube;
unilateral) in that CPT code 69705 involves a similar surgical
approach, similar hospital setting resource requirements (such as non-
physician staffing, operating room resources, anesthesia and supplies),
and reliance on a single-use medical device. Both CPT codes 30468 and
69705 are assigned to APC 5165.
Response: CPT code 30469 is effective January 1, 2023, and because
the code is new, we have no historical cost information on which to
base an accurate payment. However, it should be noted that with all new
codes for which we lack pricing information, our policy has been to
assign the service to an existing APC based on input from a variety of
sources, including, but not limited to, review of the clinical
similarity of the service to existing procedures; input from CMS
medical advisors; and review of all other information available to us.
We note that CMS received an invoice suggesting that the device
described by CPT code 30469 costs around $1,950. Based on the
additional information provided to CMS and advice from our medical
advisors, we agree that the surgical procedure described by CPT code
30469 does share similar clinical and resource characteristics with the
procedures described by CPT codes 30468 and 69705. We agree with the
commenters that the two comparison codes provided are closer in terms
of resource costs and clinical characteristics to the service described
by CPT code 30469 and that,
[[Page 71876]]
inclusive of the costs of the device, APC 5165 would be a more accurate
APC assignment. Analysis of our claims data for this final rule with
comment period shows that the geometric mean cost for CPT code 30468 is
approximately $5,987 based on 362 single claims (out of 368 total
claims) and the geometric mean cost for CPT code 69705 is approximately
$4,846 based on 263 single claims (out of 265 total claims). Because we
agree that the clinical and resource costs are similar to CPT codes
30468 and 69705, we are assigning CPT code 30469 to APC 5165 for CY
2023.
In summary, after consideration of the public comments, we are
finalizing assignment of CPT code 30469 (placeholder code 37X01) to APC
5165. The final CY 2023 payment rate for this code can be found in
Addendum B to this final rule with comment period. In addition, we
refer readers to Addendum D1 of this final rule with comment period for
the status indicator (SI) meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website.
45. Single-Use Disposable Negative Pressure Wound Therapy (dNPWT) (APC
5052)
For CY 2023, we proposed to continue to assign CPT codes 97607 and
97608 to status indicator ``T'' (Procedure or Service, Multiple
Procedure Reduction Applies) and APC 5052 (Level 2 Skin Procedures)
with a proposed payment rate of $379.94. Below are the long descriptors
for the codes:
97607: Negative pressure wound therapy, (e.g., vacuum
assisted drainage collection), utilizing disposable, non-durable
medical equipment including provision of exudate management collection
system, topical application(s), wound assessment, and instructions for
ongoing care, per session; total wound(s) surface area less than or
equal to 50 square centimeters.
97608: Negative pressure wound therapy, (e.g., vacuum
assisted drainage collection), utilizing disposable, non-durable
medical equipment including provision of exudate management collection
system, topical application(s), wound assessment, and instructions for
ongoing care, per session; total wound(s) surface area greater than 50
square centimeters.
Comment: One commenter requested that we change the status
indicator for the codes to ``S'' so there would be no discounting
involved when the service is performed with other procedures on the
same day. The commenter further stated that the change in the status
indicator would result in the OPPS payment completely covering the cost
of the service, thus improving the quality of care for Medicare
beneficiaries.
Response: A procedure or service is assigned to status indicator
``T'' to indicate that that it is subject to multiple procedure
discounting when the service is performed with other services on the
same day to reflect the savings associated with providing the service.
We believe there are savings achieved when more than one service is
performed on the same day or during a single operative session, as in
the case of surgical procedures. The patient has to be prepared only
once, and the costs associated with staff, anesthesia, operating and
recovery room use, and other services required for the second procedure
are incremental. We note that the reduced payment for the multiple
procedures applies to both the beneficiary coinsurance and Medicare
payment amounts, so this policy benefits beneficiaries.
We disagree that CPT codes 97607 and 97608 should not be discounted
when they are performed with other procedures on the same day. As
stated above, there are savings associated with providing multiple
services on the same day. We expect hospitals to furnish services most
efficiently and to manage their resources with maximum flexibility. We
do not agree that the Medicare beneficiary should be subject to the
full coinsurance amount when there are savings achieved for multiple
procedures performed on the same day/session. We believe it is in the
best interest of the Medicare program to continue to assign procedures
and services to the multiple procedure discounting methodology when
appropriate.
We note that we reviewed the CY 2021 OPPS claims data for this
final rule with comment period and found that the geometric mean costs
for both codes demonstrate that the assignment to APC 5052 with a
status indicator of ``T'' is appropriate. Specifically, our data show a
geometric mean cost of approximately $259 for CPT code 97607 based on
8,059 single claims (out of 10,921) and a geometric mean cost of about
$310 for CPT code 97608 based on 435 single claims (out of 769 total
claims). The costs of $259 and $310 for CPT codes 97607 and 97608,
respectively, are consistent with the geometric mean cost of
approximately $384 for APC 5052, rather than the geometric mean cost of
APC 5053, which is approximately $597. Based on our data, the
assignment to status indicator ``T'' has not impacted the payment for
the services inappropriately; rather, we believe the payment amounts
for these services are adequate to ensure access.
In summary, after consideration of the comment received, we are
finalizing our proposals for CPT codes 97607 and 97608 without
modification. Specifically, we are maintaining their assignment to APC
5052 (Level 2 Skin Procedures) and status indicator to ``T'' (Procedure
or Service, Multiple Procedure Reduction Applies) for CY 2023. The
final CY 2023 OPPS payment rates for CPT codes 97607 and 97608 can be
found in Addendum B to this final rule with comment period. In
addition, we refer readers to Addendum D1 of this final rule with
comment period for the SI meanings for all codes reported under the
OPPS. Both Addendum B and D1 are available via the internet on the CMS
website.
46. Surfacer[supreg] Inside-Out[supreg] Access Catheter System (APC
1534)
HCPCS code C9780 (Insertion of central venous catheter through
central venous occlusion via inferior and superior approaches (e.g.,
inside-out technique), including imaging guidance) describes the
procedure associated with the use of the Surfacer[supreg] Inside-
Out[supreg] Access Catheter System that is designed to address central
venous occlusion. HCPCS code C9780 was established on October 1, 2021,
and since its establishment the code has been assigned to New
Technology APC 1534 (New Technology--Level 34 ($8001-$8500)). For CY
2023, the OPPS payment rates are based on claims submitted between
January 1, 2021, and December 31, 2021, processed through June 30,
2022. Although the code was effective October 1, 2021, we have no
claims data at this time. We note that under the OPPS, we review on an
annual basis our claims data to determine the payment rates. Because we
have no claims data, for CY 2023, we proposed continuing to assign
HCPCS code C9780 to APC 1534 with a proposed payment rate of $8,250.50.
Comment: Multiple commenters, including the developer, requested
that HCPCS code C9780 be reassigned to New Technology APC 1575 (New
Technology--Level 38 ($10,001-$15,000)) with a proposed payment rate of
$12,500.50. The developer stated that the payment rate should be
changed because the cost of the procedure has increased since they
submitted their initial New Technology application to CMS. The
developer noted that the increase in inflation has increased the costs
of supplies, contrast agents, and labor used to perform the procedure.
The developer also explained that data from hospitals that have
performed the
[[Page 71877]]
procedure described by HCPCS code C9780 have reported substantially
longer operating room time and recovery room time for the procedure
than what was anticipated when the initial service code application was
submitted.
Response: We reviewed the request from the commenters, and we
believe that it would be premature to revise the APC assignment for the
service at this time. Because we have no claims data on which to base
an accurate payment assignment, it is difficult to determine whether
the costs of the procedure are substantially higher than what was
anticipated when the developer made their initial request for this
procedure to receive a unique HCPCS code. We review our claims data
annually to establish the OPPS payment rates. Once we have claims data
for HCPCS code C9780, we will reevaluate and determine whether an APC
reassignment is necessary. For CY 2023, we believe that the assignment
to New Technology 1534 is appropriate.
After consideration of the public comments, we are finalizing our
proposal without modification to continue to assign HCPCS code C9780 to
New Technology APC 1534 for CY 2023. The final CY 2023 payment rate for
HCPCS code C9780 can be found in Addendum B to this final rule with
comment period, which is available via the internet on the CMS website.
47. Total Ankle Replacement Procedure (APC 5116)
CPT code 27702 (Arthroplasty, ankle; with implant (total ankle))
describes the total ankle replacement (TAR) procedure. Between CY 2000
and CY 2020, the code was assigned to inpatient-only status under the
OPPS. In CY 2021, based on public comments and our evaluation of the
procedure in an evolving healthcare environment, we removed the code
from the inpatient-only list and paid separately for the procedure by
assigning the code to APC 5115 (Level 5 Musculoskeletal Procedures)
effective January 1, 2021. We continued with this APC assignment in CY
2022, with a payment rate of $12,593.29.
Under the OPPS, we review our claims data on an annual basis to set
the payment rates. For the CY 2023 OPPS/ASC proposed rule, we
identified approximately 1,733 paid claims for CY 2021 with a geometric
mean cost of $22,501.63. Based on our examination of the proposed rule
data, we revised the APC assignment for CPT code 27702. For CY 2023, we
proposed to move CPT code 27702 from APC 5115 to APC 5116 (Level 6
Musculoskeletal Procedures) with a proposed payment rate of $22,303.35.
Comment: Several commenters supported the reassignment from APC
5115 to APC 5116 for CPT code 27702. Commenters stated that the
reassignment of outpatient TAR cases from APC 5115 to APC 5116 is
consistent with Medicare's IPPS policy and would appropriately
recognize the clinical complexity of these procedures. Commenters noted
that the geometric mean cost of approximately $25,906 for CPT 27702
exceeds the geometric mean cost of approximately $22,502 for APC 5116.
They expressed concern that the cost does not reflect the total costs
hospitals incur in furnishing TAR procedures in the HOPD setting, but
that it would mitigate the significant shortfall currently associated
with performing this procedure when it is assigned to APC 5115 and help
preserve patient access to outpatient TAR surgery.
Response: We appreciate the commenters' support of the reassignment
of CPT code 27702 to APC 5116. Based on our evaluation of the latest
claims data for this final rule with comment period, which is based on
claims submitted between January 1, 2021, and December 31, 2021,
processed through June 30, 2022, we believe that the reassignment to
APC 5116 is appropriate. Specifically, our analysis reveals a geometric
mean cost of about $26,036 based on 1,884 single claims (out of 1,904
total claims) for CPT code 27702, which is in line with the geometric
mean cost of approximately $22,519 for APC 5116, rather than the
geometric mean cost of about $13,418 for APC 5115. We note that the
geometric mean cost for CPT code 27702 falls within the range of the
geometric mean cost for the significant HCPCS codes within APC 5116,
which is between approximately $15,504 and $27,978. Based on the data,
the geometric mean cost of about $26,036 for CPT code 27702 is
consistent with the geometric mean cost of APC 5116. Therefore, for CY
2023, we believe it is appropriate to increase the payment for the TAR
procedure described by CPT code 27702 and reassign the code to APC
5116.
In summary, after consideration of the public comments, we are
finalizing our proposal without modification to assign CPT code 27702
to APC 5116 (Level 6 Musculoskeletal Procedures) for CY 2023. The final
CY 2023 payment rate for CPT code 27702 can be found in Addendum B to
this final rule with comment period, which is available via the
internet on the CMS website.
48. Transcatheter Implantation of Coronary Sinus Reduction Device (APCs
5193 and 5194)
For the July 2022 update, we created HCPCS code C9783 (Blinded
procedure for transcatheter implantation of coronary sinus reduction
device or placebo control, including vascular access and closure, right
heart catheterization, venous and coronary sinus angiography, imaging
guidance and supervision and interpretation when performed in an
approved Investigational Device Exemption (IDE) study) to describe the
blinded arm of COSIRA-II clinical trial. We assigned this code to APC
5193 (Level 2 Endovascular Procedures) with a proposed payment rate of
$10,760.97. In addition, we proposed to assign CPT code 0645T
(Transcatheter implantation of coronary sinus reduction device
including vascular access and closure, right heart catheterization,
venous angiography, coronary sinus angiography, imaging guidance, and
supervision and interpretation, when performed) to status indicator
``E1'' (Not covered. Not paid by Medicare when submitted on outpatient
claims (any outpatient bill type)), as use of the device in a non-
blinded clinical trial had not been approved by the FDA for inclusion
in an IDE study.
Comment: We received a few public comments, including a comment
from the device manufacturer, stating that as of July 21, 2022, the
device manufacturer had revised the protocol for their clinical trial
to add a single arm nonrandomized cohort to accommodate specified
patients who do not qualify for the randomized arm of the trial. They
stated that for patients in this cohort, the blinded code will not
accurately describe the procedure, and instead, CPT code 0645T will
need to be used to report the procedure. They requested that CPT code
0645T be assigned to APC 1591 (New Technology--Level 40 ($20,001-
$25,000)) with a proposed payment rate of $22,500.50. Information
provided to CMS by the manufacturer indicates that the estimated cost
of the device is around $15,500.
Response: We thank commenters for their responses. However, we
believe that CPT code 0645T fits more appropriately in a clinical APC
rather than a new technology APC. We believe that the procedure to
implant the COSIRA-II device is most accurately described by CPT code
93451 (Right heart catheterization including measurement(s) of oxygen
saturation and cardiac output, when performed). Based on our analysis
of the latest claims data for this final rule with
[[Page 71878]]
comment period, the geometric mean cost for CPT code 93451 is
approximately $2,287. When the geometric mean cost of CPT code 93451 is
added to the cost of the device, the total cost of the procedure
described by CPT code 0645T is around $18,000, which is in line with
the geometric mean cost of about $17,665 for APC 5194 (Level 4
Endovascular Procedures). Based on the cost, we believe that CPT code
0645T is more appropriate in APC 5194 rather than New Technology APC
1591. As we do every year, we will reevaluate the APC assignment for
CPT code 0645T for the next rulemaking cycle. We note that we review,
on an annual basis, the APC assignments for all services and items paid
under the OPPS.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification. Specifically, we are
assigning CPT code 0645T to APC 5194 for CY 2023. In addition, we did
not receive any comments on the APC assignment for HCPCS code C9783 and
are finalizing our proposal to assign the code to APC 5193. The final
CY 2023 payment rate for this code can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
49. Transnasal Esophagogastroduodenoscopy (EGD) Procedure (APC 5301 and
5302)
As shown in Table 47, we proposed to continue to assign CPT codes
0652T and 0653T to APC 5301, and 0654T to APC 5302 for CY 2023. We also
proposed to continue to assign device category HCPCS code C1748 to APC
2029 with a status indicator of ``H'' to indicate that the device is on
pass-through status under the OPPS.
[GRAPHIC] [TIFF OMITTED] TR23NO22.000
Comment: Some commenters expressed concern with the proposed APC
assignments for CPT codes 0652T, 0653T, and 0654T. They stated that the
pass-through status for device HCPCS code C1748 will expire on June 30,
2023, and consequently, HOPDs will no longer receive additional payment
for the device beginning July 1, 2023. The commenter explained that the
EvoEndo[supreg] Model LE Single-Use Gastroscope, which is a device used
in the procedure, has an invoice price of $2,000. They also stated that
the device cost is not reflected in our claims data because it just
received FDA 510(k) marketing clearance on February 14, 2022, and they
indicated that the cost of the device exceeds the proposed payment rate
for both APC 5301 and APC 5302. In addition, despite the lack of data
for the EvoEndo device, the commenters acknowledged that the five
claims for CPT code 0654T suggest a change in the APC assignment from
APC 5302 to APC 5303 is necessary. Specifically, they explained that
the geometric mean cost of approximately $2,795 for CPT code 0654T
included in the proposed rule shows that the cost to perform the
procedure is similar to the procedures in APC 5303, whose geometric
mean cost is about $3,349, rather than the geometric mean cost of
approximately $1,784 for APC 5302. Based on our claims data, and
because the proposed payment rates for the procedure codes do not
account for the cost of the EvoEndo[supreg] Model LE Single-Use
Gastroscope, the commenters requested a reassignment from APC 5301 to
APC 5302 for CPT codes 0652T and 0653T, and from APC 5302 to APC 5303
with a proposed payment rate of $3,319.29 for CPT code 0654T effective
July 1, 2023, when the device pass-through status expires for HCPCS
code C1748.
[[Page 71879]]
Response: Based on the information submitted to CMS, the cost of
the EvoEndo[supreg] Model LE Single-Use Gastroscope, and the recent
510(k) FDA approval, we believe that we should modify the APC
assignments for these procedure codes. As listed in Table 47, the
proposed CY 2023 OPPS payment rates are $841.07 for CPT codes 0652T and
0653T and $1,768.53 for CPT code 0654T, which, according to the
commenter, are below the cost of the EvoEndo[supreg] Model LE Single-
Use Gastroscope. We note that for CY 2023, the OPPS payment rates are
based on claims submitted between January 1, 2021, through December 31,
2021, that were processed on or before June 30, 2022. Our analysis of
the data for this final rule shows that we have no claims data for CPT
codes 0652T and 0653T, however, because the cost of the device exceeds
the proposed payment rate for APC 5301, we believe that we should
reassign both codes to APC 5302. In addition, as mentioned by the
commenters, we have some data for CPT 0654T, which is consistent with
the geometric mean cost for APC 5303. Specifically, our claims for this
final rule with comment period reveal 5 single claims (out of 5 total
claims) with a geometric mean cost of approximately $2,804 for CPT code
0654T. Based on this data, we believe a reassignment for CPT code 0654T
to APC 5303 is appropriate. Therefore, effective July 1, 2023, we are
reassigning CPT codes 0652T and 0653T from APC 5302 to APC 5303, and
CPT code 0654T from APC 5303 to APC 5304. As we do every year, we will
reevaluate the APC assignments for CPT codes 0652T, 0653T, and 0654T
for the next rulemaking cycle. We note that we review, on an annual
basis, the APC assignments for all services and items paid under the
OPPS.
In summary, after consideration of the public comments, we are
finalizing our proposal with modification. First, for the January 1,
2023 update, we are finalizing our proposal without modification for
CPT codes 0652T, 0653T, 0654T and HCPCS code C1748. Secondly, effective
July 1, 2023, we are revising the APC assignments for CPT codes 0652T,
0653T, and 0654T to the APCs listed in Table 48. We note that the pass-
through status for device category HCPCS code C1748 will expire on June
30, 2023, and at that time, the status indicator will change from ``H''
(device pass-through) to ``N'' (packaged) effective July 1, 2023. Table
48 below list the final SI and APC assignments for CY 2023. The final
CY 2023 payment rates for the codes can be found in Addendum B to this
final rule with comment period. In addition, we refer readers to
Addendum D1 of this final rule with comment period for the status
indicator (SI) meanings for all codes reported under the OPPS. Both
Addendum B and D1 are available via the internet on the CMS website.
[GRAPHIC] [TIFF OMITTED] TR23NO22.063
50. 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 based on other
statutory or regulatory restrictions. Unlisted codes provide a way for
providers to report services for which there is no
[[Page 71880]]
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 stated in the proposed rule that we
believe 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 explained that we believe 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
proposed to reassign CPT code 41899 to clinical APC 5871, which is the
only, and therefore lowest, APC group that specifically describes
dental procedures.
In the CY 2023 OPPS proposed rule, we stated that, 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, 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 $2,310.42 while the geometric mean cost of
the code's current APC assignment, APC 5161, was $212.05. In contrast,
the geometric mean cost of APC 5871 (Dental Procedures) was $1,973.71.
Table 49 below shows the current and proposed status indicator and APC
assignment for CPT code 41899.
[GRAPHIC] [TIFF OMITTED] TR23NO22.064
The following summaries describe the public comments we received on
our proposal.
Comment: Commenters expressed concern that patients with
disabilities and children have limited access to dental care under
general anesthesia in an operating room. Several commenters explained
the importance of having access to this type of sedated dental care for
vulnerable patient populations, especially patients with disabilities
and other special health care needs. For example, one commenter
explained that general anesthesia can lessen the trauma caused during
dental exams or procedures to patients with special needs and sensory
issues. Similarly, another commenter stated that the least traumatic
option for children with disabilities and severe dental issues, is
often full mouth dental rehabilitation under general anesthesia in a
hospital setting. A comment from a dental association further
highlighted the need for patient access to dental rehabilitation
services in an operating room under anesthesia. The dental association
explained that many patients' dental health deteriorated during the
COVID-19 pandemic, due to changing eating habits, declining mental
health, diminishing daily routines, and deferred elective health care
procedures during quarantine. The commenter explained that an
overwhelming number of patients, especially children, subsequently
presented with rampant tooth decay and a dire need for sedation
services, and will oftentimes face a waiting period of up to six months
due lack of access to operating rooms. During this extended waiting
period, the commenter explained that patients' dental health may
further deteriorate; abscesses are more likely to develop and teeth
that may initially have warranted crowns need to be emergently
extracted via dental rehabilitation surgery. Per the commenter, the
optimal care setting to address the oral health care needs for many
patients who require complex dental services under general anesthesia,
including dental rehabilitation surgery, is often in a hospital or
another surgical setting, such as an ambulatory surgical center (ASC).
This commenter further recommended that CMS create an oral
rehabilitation code that would enable these services to be prioritized
by hospitals and ensure patient access. We also received comments from
several family members of adults and children with disabilities who
require anesthetized dental care in an operating room and are unable to
access it for their family members. These commenters explained they are
often on waiting lists, have to travel long distances to receive care,
or only have one provider in their area that could provide needed
dental care for their family member. Similarly, we received comments
from dentists struggling to reserve operating rooms to provide dental
care to vulnerable patients that require general anesthesia in this
setting. One dentist commented that the local children's hospital only
provided a few operating room days per month, causing a backlog of over
1,500 patients, mostly Medicaid beneficiaries, unable to receive dental
services in an operating room. Commenters explained that dentists often
need to provide surgical dental services and non-surgical dental
services for vulnerable patient populations in operating rooms under
general anesthesia given the time involved for these procedures, the
often
[[Page 71881]]
complex equipment and anesthesia required, and the complexity of the
services required for high-risk patients.
Response: We thank the commenters for expressing their concerns on
this important issue. We appreciate hearing about firsthand experiences
from dentists and family members of patients in vulnerable populations
who are unable to access dental care as their perspectives help us to
better understand the issue. While we appreciate that the commenters
have brought awareness to an important dental issue impacting health
equity that needs to be addressed, we note that there are statutory and
regulatory limitations regarding Medicare coverage and payment for
dental services. Services must meet Medicare coverage requirements to
be paid by Medicare, regardless of patient necessity. Therefore, while
we understand that commenters believe that finalizing our proposal
without modification would improve access to needed dental services for
vulnerable populations, we are clarifying that the policies in this
final rule apply only to hospital outpatient department services
covered by Medicare Part B and paid under the OPPS.
Comment: Commenters stated that they generally bill CPT code 41899
to describe the provision of dental services in the outpatient setting,
and that the code's CY 2022 OPPS payment rate is too low to cover
facility costs and incentivize hospitals to reserve operating rooms for
dentists to provide needed dental care for patients with disabilities
under general anesthesia. All commenters were supportive of the
proposed reassignment of CPT 41899 to APC 5871 (Dental Procedures) and
explained that the resulting increase in Medicare payment for covered
dental procedures under CPT code 41899 would have the potential to
mitigate the current reimbursement obstacles to operating room access.
One commenter in particular was supportive of our proposal because they
believed the CY 2022 APC assignment of CPT 41899 to APC 5161 (Level 1,
ENT Procedures) was not an accurate representation of the resource
costs associated with the range of dental surgical services for which
CPT code 41899 is billed.
Response: We thank the commenters for their support of our
proposal. As we noted in our proposal, 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. While we understand that finalizing our
proposal without modification would have the effect of increasing the
payment rate for CPT 41899, and that commenters believe the increased
payment rate may improve access to needed dental procedures for
vulnerable populations, we reiterate that CMS has a longstanding policy
of assigning unlisted codes, like CPT 41899, to the lowest level APC
within the most appropriate, clinically related APC group, without
consideration of resource costs.
Comment: Several commenters suggested that our proposal may improve
access to dental care for Medicaid beneficiaries with disabilities,
especially children. For example, one commenter stated that they hoped
that state Medicaid systems would follow the proposed payment rate
increase for unlisted code CPT code 41899.
Response: While we understand that state Medicaid programs often
use Medicare payment rates for their own rate-setting purposes, we are
clarifying that the payment rates and APC assignments in this final
rule with comment period only apply to the hospital outpatient
department services paid under the hospital outpatient prospective
payment system (OPPS) under Medicare Part B.
Comment: One commenter requested that we review the fee schedule
for anesthesiologists providing dental care sedation.
Response: We note that this final rule with comment period does not
set Medicare payment rates for physicians and other practitioners. The
Medicare fee schedule for practitioners is provided annually in the
Physician Fee Schedule (PFS) proposed and final rules.
Comment: Some commenters referenced the dental proposals in the CY
2023 PFS proposed rule as evidence that there will be a significant,
and potentially expanding, number of dental procedures that will be
covered by Medicare. One commenter stated that the CY 2023 PFS proposed
rule implicitly supports an approach that would make individual CDT
codes payable in the HOPD and ASC settings. Another commenter stated
they suspected that dental surgical procedures that require anesthesia
would be covered by Medicare.
Response: We are clarifying that Medicare payment under the OPPS
will be made for dental services that are covered by Medicare. As we
stated in the proposed rule, the fact that a drug, device, procedure,
or service is assigned a HCPCS code and a payment rate under the OPPS
does not mean that the service is covered by the Medicare program, but
indicates only how the product, procedure, or service may be paid if
covered by the program. MACs determine whether a drug, device,
procedure, or other service meets all program requirements for
coverage. Therefore, even if a code describing a dental service is
assigned to an APC, which has an associated payment rate, Medicare will
make payment for the service if it meets coverage requirements. This
means that dental services billed with CPT code 41899 will be paid by
Medicare if they are covered. We are further clarifying that this
policy does not serve as a coverage determination for dental services
under general anesthesia. We direct readers to the CY 2023 PFS final
rule for additional discussion of Medicare coverage and payment for
dental services. We note the CY 2023 PFS final rule is scheduled to be
issued within a few days of this final rule with comment period
Finally, regarding the addition of other dental codes to the OPPS
and the ASC CPL, CMS has not proposed to assign any additional codes
describing specific dental services to an APC or to the ASC CPL for CY
2023. We will address APC assignments for codes describing dental
procedures that are described by the dental policy discussed in the CY
2023 PFS final rule in future rulemaking, as appropriate, and as part
of our annual review and revision of the APC groups.
Comment: Several commenters requested that CMS cover and pay for
dental surgeries furnished in the ASC setting. Commenters explained
that not having dental surgical procedures on the ASC CPL severely
impedes access to potential sites of service for Medicare and Medicaid
beneficiaries, given that Medicaid typically follows Medicare coverage
and payment guidelines. Additionally, some commenters requested we add
CDT code D9420 (Hospital or Ambulatory Surgical Center Call) to the ASC
CPL.
Response: First, we reiterate that Medicare Part B pays for dental
services when they meet our coverage requirements. In the CY 2023 PFS
final rule, CMS clarified and codified certain dental services that may
be covered and paid for under Medicare Part B. As a result, there may
be at least some additional dental services that meet coverage
requirements as outlined in the CY 2023 PFS final rule. As previously
stated, the fact that a service is assigned a HCPCS code and a payment
rate under the OPPS does not mean the service is covered by the
Medicare program, but
[[Page 71882]]
indicates only how the product, procedure, or service may be paid if
covered by the program. MACs determine whether a drug, device,
procedure, or other service meets all program requirements for
coverage. If a dental service is covered under Medicare Part B and
meets the criteria for the ASC CPL (42 CFR 416.66), then it may be
added to the ASC CPL. There are currently dental-related procedures on
the ASC CPL that are described by CPT codes (i.e., 41800, 41805, 41806,
41820-41828, 41830, 41850, 41870, 41872, and 41874), but no additional
dental-related procedures were proposed for CY 2023. We thank the
commenters for their suggestions and will consider this issue for
future rulemaking.
Comment: Several commenters requested that CMS expand its proposal
to the ASC setting and add CPT 41899 to the ASC CPL. One commenter
stated that some state Medicaid plans only make payments to ASCs for
procedures found on the Medicare ASC CPL, which causes access issues if
CPT 41899 is not on the ASC CPL.
Response: We thank the commenters for their suggestion. However,
our current regulations preclude the inclusion of procedures that can
only be reported using unlisted CPT code on the ASC CPL (42 CFR
416.166(c)(7)), as it would not be possible to evaluate whether
procedures reported using unlisted codes meet the relevant criteria at
42 CFR 416.166 to be included on the ASC CPL. As a reminder, under
Sec. Sec. 416.2 and 416.166 of the Medicare regulations, subject to
certain exclusions, Medicare covered surgical procedures in an ASC are
surgical procedures that are separately paid under the OPPS, are not
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. Covered surgical procedures in an ASC do not include those
surgical procedures that generally result in extensive blood loss,
require major or prolonged invasion of body cavities, directly involve
major blood vessels, are generally emergent or life-threatening in
nature, commonly require systemic thrombolytic therapy, are designated
as requiring inpatient care under Sec. 419.22(n), only able to be
reported using a CPT unlisted surgical procedure code, and are
otherwise excluded under Sec. 411.15. For further discussion on ASC
CPL, refer to section XIII.C.1.d (Additions to the List of ASC Covered
Surgical Procedures) of this CY 2023 OPPS/ASC final rule with comment
period.
Based on the comments received, we are finalizing the following
coding policy for dental services that meet Medicare coverage
requirements as specified in the CY 2023 PFS final rule. First, we are
creating a new code, HCPCS code G0330, to describe facility services
for dental rehabilitation procedure(s) furnished to patients who
require monitored anesthesia (e.g., general, intravenous sedation
(monitored anesthesia care)) and use of an operating room. We are
adopting this code based on extensive public comments expressing the
need for a coding and payment mechanism to improve access to covered
dental procedures under anesthesia, especially dental rehabilitation
procedures, an issue that commenters explained is caused by barriers to
securing sufficient operating room time to furnish these services.
HCPCS code G0330 will be assigned to APC 5871 (Dental Procedures), the
APC to which we proposed to assign CPT code 41899. Due to public
comments detailing the lack of access to appropriate facilities to
receive dental services under anesthesia, we are creating this code to
enable HOPDs to bill the technical, facility-fee component of Medicare-
covered dental rehabilitation services only. We further note that HCPCS
G0330 is only billable under the OPPS and must only be used to describe
facility fees for dental rehabilitation services that meet Medicare
coverage requirements as interpreted in the CY 2023 PFS final rule.
Therefore, G0330 cannot be used to describe or bill the facility fee
for non-covered dental professional services.
Second, we are clarifying that the use of unlisted CPT code 41899
should be limited to procedures that are not otherwise described by
other, more specific dental codes. We stated in the CY 2005 OPPS final
rule (70 FR 68515-68980) that the assignment of unlisted codes to the
lowest level APC in the clinical category specified in the code
descriptor provides a reasonable means for interim payment until such
time as there is a code that specifically describes what is being paid.
We stated that this policy encourages the creation of codes where
appropriate and mitigates the risk of overpayment for services that are
not clearly identified on the claim. That is why we are creating HCPCS
code G0330 for providers to use to bill for facility services for
dental rehabilitation procedures performed on patients who require
monitored anesthesia in an operating room. We believe this new code is
more clinically appropriate and would more accurately pay facility fees
for covered dental rehabilitation services furnished to patients who
require monitored anesthesia in an operating room rather than unlisted
CPT code 41899, which is non-specific. Therefore, we are clarifying
that unlisted CPT code 41899 may be used more broadly to describe other
dental or dental-related procedures on the teeth and gums, not
otherwise described by other HCPCS codes currently assigned to APCs,
such as those performed in the clinical dental scenarios as described
in the CY 2023 PFS final rule, as well as covered non-surgical dental
services and surgical dental services provided to patients who do not
require monitored anesthesia and the use of an operating room. In
accordance with existing billing practices, providers will continue to
use existing, specific CDT codes already assigned to APCs when
available.
After consideration of the public comments we received, we are not
finalizing the proposed APC assignment for CPT code 41899 of APC 5871
(Dental Procedures). We believe that because we are creating a new code
that describes facility fees for dental rehabilitation services for
patients that require hospital facilities and monitored anesthesia,
unlisted code CPT 41899 should instead be used to identify other dental
or dental-related services, and remain assigned to APC 5161 (Level 1,
ENT Procedures), the lowest-level, clinically appropriate APC. The new
G-code we are establishing, HCPCS code G0330, will be assigned to APC
5871 (Dental Procedures) for CY 2023. HCPCS code G0330 describes
facility services for dental rehabilitation procedures performed on
patients who require monitored anesthesia (e.g., general, intravenous
sedation (monitored anesthesia care)) and use of an operating room.
While the new G-code is not payable in the ASC setting for CY 2023, we
will consider adding it to the ASC CPL in future rulemaking. We
reiterate that payment will be made for services identified with
unlisted CPT code 41899 or HCPCS code G0330 when those services meet
Medicare coverage requirements. We refer readers to Addendum B of this
final rule with comment period for the payment rates for all codes
reportable under the OPPS, including CPT code 41899 and G0330. Addendum
B is 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. We note
[[Page 71883]]
that HCPCS code G0330 is assigned to comment indicator ``NI'' in
Addendum B to indicate that comments will be accepted on the interim
APC assignment.
51. 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 code 53440 (Male
sling procedure) and CPT code 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 review of the latest claims data for this final rule with
comment period, specifically, claims submitted between January 1, 2021,
through December 31, 2021, and processed on or before June 30, 2022, we
examined the procedures assigned to the Urology Procedures APCs. In the
CY 2022 final rule with comment period (86 FR 63565), we stated that 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 CY 2019 claims data due to the PHE. For CY 2022,
we did not finalize any APC reassignment for the urology-related
procedures because our data analysis using the CY 2019 claims did not
support the reassignment based on the geometric mean cost of these
codes and the impact across the Urology and Related services' APC's.
For the CY 2023 ratesetting, we proposed to use CY 2021 claims
data. Using the CY 2021 claims data, we identified eight procedures
(listed below) that were potentially appropriate to move from APC 5375
to APC 5376 because the geometric mean cost for the procedures ranged
between the two APCs. Specifically, the proposed geometric mean cost of
these services was closer to the geometric mean cost of $8,788.53 for
APC 5376, rather than the geometric mean cost of $4,826.23 for APC
5375. This reassignment to APC 5376 would improve 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 proposed 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 (proposed geometric mean cost:
$11,137.98).
HCPCS C9769: Cystourethroscopy, with insertion of
temporary prostatic implant/stent with fixation/anchor and incisional
struts (proposed geometric mean cost: $7,742.45).
CPT 51860: Cystorrhaphy, suture of bladder wound, injury
or rupture; simple (proposed geometric mean cost: $7,548.83).
CPT 53452 (0549T): Periurethral transperineal adjustable
balloon continence device; unilateral insertion, including
cystourethroscopy and imaging guidance (Proposed geometric mean cost:
$7,337.54).
CPT 53449: Repair of inflatable urethral/bladder neck
sphincter, including pump, reservoir, and cuff (proposed geometric mean
cost: $7,109.79).
CPT 54344: Repair of hypospadias complication(s) (i.e.,
fistula, stricture, diverticula); requiring mobilization of skin flaps
and urethroplasty with flap or patch graft (proposed 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 (proposed geometric mean cost: $7,069.06).
CPT 55880: Ablation of malignant prostate tissue,
transrectal, with high intensity-focused ultrasound (hifu), including
ultrasound guidance (proposed geometric mean cost: $7,015.62).
Comment: A commenter supported our proposal to reassign the above
codes from APC 5375 to APC 5376. The commenter agreed that the
reassignment improves the resource cost and homogeneity for the
procedures within APC 5375 and APC 5376.
Response: We thank the commenter for the input.
Based on our examination of the latest claims data for this final
rule with comment period, we continue to believe the reassignment of
the above set of urological procedures improves the resource cost and
clinical homogeneity for the procedures within APC 5375 and APC 5376.
Comment: Commenters supported our proposal to reassign CPT code
55880 (Ablation of malignant prostate tissue, transrectal, with high
intensity-focused ultrasound (hifu), including ultrasound guidance)
back to level 6 Urology and Related Services (APC 5376). They stated
that the CY 2019 assignment of HIFU to the level 5 Urology and Related
Services APC, specifically, APC 5375, limited Medicare beneficiaries'
access to HIFU because the facility would have to absorb the cost for
the procedure since the payment rate for APC 5375 does not reflect the
cost of the service. Commenters believe the HIFU reassignment to APC
5376 would increase access for African American men who are diagnosed
with prostate cancer. One commenter requested CMS apply the 31 percent
default device offset for HIFU.
Response: Our analysis of the latest claims data used for this
final rule with comment period supports the reassignment from APC 5375
to APC 5376. Specifically, our review reveals a geometric mean cost of
approximately $7,134 for CPT code 55880 based on 345 single claims (out
of 348 total claims), which is consistent with the geometric mean cost
of about $8,800 for APC 5376, rather than the geometric mean cost of
approximately $4,836 for APC 5375. The data indicates that the resource
costs associated with CPT code 55880 are consistent with the services
assigned to APC 5376. Therefore, we believe it would be appropriate to
reassign the code from APC 5375 to APC 5376 for CY 2023. However, based
on the latest data available, we have no evidence that supports
applying the default 31 percent device offset for HIFU (CPT 55880).
Comment: A commenter supported the reassignment of HCPCS code C9769
(Cystourethroscopy, with insertion of temporary prostatic implant/stent
with fixation/anchor and incisional struts) to APC 5376 (Level 6
Urology and Related Services). Additionally, the commenter supported
the device offset percentage of 75.06 percent for HCPCS code C9769.
Response: We examined our claims data for this final rule with
comment period, and our analysis of the latest claims data shows that
the geometric mean cost for HCPCS code C9769 is approximately $7,656
based on 13 single claims (out of 13 total claims), which is in line
with the geometric mean cost of about $8,800 for APC 5376 rather than
the geometric mean cost of approximately $4,836 for APC 5375. The
geometric mean cost for HCPCS
[[Page 71884]]
code C9769 demonstrates that its resource cost is consistent with the
resources of the services assigned to APC 5376. Consequently, we
believe that the assignment to APC 5376 for HCPCS code C9769 is
appropriate. Additionally, based on the available evidence, we believe
it is appropriate to adjust the device offset percentage to 75.06
percent for CY 2023.
In addition to the above codes, we also received a comment related
to CPT code 53452. For CY 2023, we proposed to continue to assign CPT
code 53452 (Periurethral transperineal adjustable balloon continence
device; unilateral insertion, including cystourethroscopy and imaging
guidance) to APC 5375 (Level 5 Urology and Related Services) with a
proposed payment of $4,783.70.
Comment: A commenter requested the reassignment of CPT code 53452
to APC 5376 (Level 6 Urology and Related Services). The commenter also
stated that prior to CY 2022, CPT code 53452 was billed as CPT code
0549T (Transperineal periurethral balloon continence device; unilateral
placement, including cystoscopy and fluoroscopy).
Response: We agree that CPT code 53452 has been replaced with CPT
code 0549T. We note that CPT codes 0549T and 53452 are assigned to the
same APC. As noted above, the CY 2023 OPPS payment rates are based on
our analysis of the claims data submitted between January 1, 2021,
through December 31, 2021, and processed on or before June 30, 2022.
Our analysis of the claims data for this final rule shows a geometric
mean cost of about $7,315 for the predecessor CPT code 0549T based on 6
single claims (out of 6 total claims), which is consistent with the
geometric mean cost of approximately $8,800 for APC 5376, rather than
the geometric mean cost of about $4,836 for APC 5375. Based on the
data, we believe that the resource costs associated with CPT code 53452
(previously billed as CPT code 0549T) are similar to the other
surgeries assigned to APC 5376. We believe the reassignment of CPT code
53452 is appropriate and improves both the resource cost and clinical
homogeneity of the procedures within APC 5376.
In summary, after consideration of the public comments, we are
finalizing our proposal and reassigning the eight urology-related
procedures discussed above from APC 5375 to APC 5376. In addition, we
are finalizing our proposal with modification for CPT code 53452 and
reassigning the code from APC 5375 to APC 5376 for CY 2023. Table 50
below shows the final geometric mean cost for each APC within the
Urology and Related Services grouping.
[GRAPHIC] [TIFF OMITTED] TR23NO22.065
52. Waterjet Prostate Ablation (APC 5376)
The AquaBeam[supreg] System is intended for the resection and
removal of prostate tissue in males suffering from lower urinary tract
symptoms (LUTS) due to benign prostatic hyperplasia (BPH). The waterjet
prostate ablation procedure is represented by CPT code 0421T
(Transurethral waterjet ablation of prostate, including control of
post-operative bleeding, including ultrasound guidance, complete
(vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or
dilation, and internal urethrotomy are included when performed)). The
procedure involves resection of the prostate to relieve symptoms of
urethral compression. The resection is performed robotically using a
high velocity, nonheated sterile saline water jet (in a procedure
called Aquablation). The procedure utilizes real-time intra-operative
ultrasound guidance to allow the surgeon to precisely plan the surgical
resection area of the prostate and then the system delivers Aquablation
therapy to accurately resect the obstructive prostate tissue without
the use of heat. The AquaBeam[supreg] device, represented by HCPCS code
C2596, received device transitional pass-through payment status
beginning in CY 2020.
For CY 2023, we proposed to continue to assign CPT code 0421T to
APC 5376 (Level 6 Urology and Related Services) based on the CY 2021
claims. Our analysis of the CY 2021 claims data for the CY 2023 OPPS/
ASC proposed rule with comment period, which was based on claims data
submitted between January 1, 2021, through December 31, 2021, and
processed through December 31, 2021, yielded 1,016 single claims for
CPT code 0421T with a proposed geometric mean cost of about $8,754.54.
Comment: A commenter supported the continued assignment of CPT code
0421T to APC 5376 (Level 6 Urology and Related Services) based on its
clinical and resource comparability to the procedures within the APC.
The commenter noted that the transitional pass-through status for the
AquaBeam[supreg] device (HCPCS code C2596), expires on December 31,
2022, and urged CMS to package the device cost into the waterjet
ablation procedure (CPT code 0421T).
[[Page 71885]]
Additionally, the commenter stated that the proposed device offset of
35 percent is artificially low and argued that the PHE has exacerbated
omissions in device coding. The commenter requested a device offset of
66 percent.
Response: We thank the commenter for the input. Based on our
analysis of the updated claims data for this final rule with comment
period, which is based on claims submitted between January 1, 2021,
through December 31, 2021, processed through June 30, 2022, we believe
the assignment of CPT code 0421T to APC 5376 is appropriate based on
its resource cost and clinical homogeneity to the procedures within APC
5376. Specifically, our claims data shows a geometric mean cost of
approximately $8,677 based on 1,121 single claims (out of 1,128 total
claims), which is consistent with the geometric mean cost of about
$8,800 for APC 5376. We note that upon expiration of the device
transitional pass-through at the end of December 2022, the cost of the
AquaBeam[supreg] device, represented by HCPCS C2596, will be packaged
into the waterjet ablation procedure (0421T). Additionally, based on
the available data, we believe the device offset percentage of 35
percent is appropriate for CPT code 0421T.
In summary, after consideration of the public comment, we are
finalizing our proposal without modification and assigning CPT code
0421T to APC 5376. The final APC and status indicator assignments for
CPT codes 0421T is found in Table 51. The final CY 2023 OPPS payment
rates for this code can be found in Addendum B to this final rule with
comment period. In addition, we refer readers to Addendum D1 of this
final rule with comment period for the SI meanings for all codes
reported under the OPPS. Both Addenda B and D1 are available via the
internet on the CMS website, specifically, at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
[GRAPHIC] [TIFF OMITTED] TR23NO22.066
53. ZOLL [mu]CorTM Heart Failure Management System Service
(HFSM) Monitoring
The Heart Failure Management System Service (HFMS) is designed to
help clinicians improve outcomes and reduce hospitalizations for heart
failure patients with potential fluid-management problems by providing
monitoring for pulmonary fluid levels, an early indicator for heart
failure decompensation. The system uses a non-invasive, water-resistant
sensor, which can be worn by patients 24 hours a day, and novel
radiofrequency technology to monitor pulmonary fluid levels.
Proprietary algorithms analyze patient-specific trends in the incoming
data, allowing for early detection of deterioration in the patient's
condition by the Independent Diagnostic Testing Facility (IDTF).
Actionable clinical parameters recorded and available to clinicians
include the thoracic fluid index, heart rate, respiration rate,
activity, posture, and heart rhythm (ECG). Notifications relating to
the condition of each patient are provided to the treating physician;
data in the notifications aid the physician in the diagnosis and
identification of various clinical conditions, events, or trends,
allowing for timely intervention by the physician with the goal of
avoiding a hospital readmission.
The CPT Editorial Panel established CPT codes 0607T and 0608T to
describe the HFSM monitoring effective July 1, 2020. For CY 2023, we
proposed to continue to assign CPT code 0607T (Remote monitoring of an
external continuous pulmonary fluid monitoring system, including
measurement of radiofrequency- derived pulmonary fluid levels, heart
rate, respiration rate, activity, posture, and cardiovascular rhythm
(e.g., ECG data), transmitted to a remote 24-hour attended surveillance
center; set-up and patient education on use of equipment) to status
indicator ``V'' (clinic or emergency department visit) and APC 5012
(Clinic Visits and Related Services) with a proposed payment rate of
$122.82. We also proposed to continue to assign CPT code 0608T (Remote
monitoring of an external continuous pulmonary fluid monitoring system,
including measurement of radiofrequency-derived pulmonary fluid levels,
heart rate, respiration rate, activity, posture, and cardiovascular
rhythm (e.g., ECG data), transmitted to a remote 24-hour attended
surveillance center;) to status indicator ``S'' (procedure or service,
not discounted when multiple) and APC 5741 (Level 1 Electronic Analysis
of Devices) with a proposed payment rate of $35.96.
Comment: The manufacturer stated that the services associated with
CPT codes 0607T and 0608T are not performed in the HOPD setting and are
exclusively IDTF services. The manufacturer further added that the APC
assignment for these codes under the OPPS has resulted in confusion
that impedes availability of the HFMS to Medicare patients. The
manufacturer requested that CMS revise the status indicators for CPT
codes 0607T and 0608T to either ``A'', ``B'', or ``M'' to indicate that
the services are not payable under the OPPS.
[[Page 71886]]
The commenter explained that the HFMS services are provided only
through ZOLL Laboratory Services, a Joint Commission, Medicare-enrolled
IDTF and indicated that no hospital in the United States possesses the
HFMS technology. In addition, the commenter noted that there have been
no OPPS claims for CPT codes 0607T or 0608T because hospitals do not
provide this service. This same commenter added that CPT codes 0607T
and 0608T are currently contractor-priced by Medicare Administrative
Contractors (MACs) under the PFS.
Response: We thank the commenter for the feedback. Since the HFMS
services are provided only through ZOLL's IDTF and no hospital in the
U.S. has the technology to offer the service, we are accepting the
recommendation and finalizing a change in the status indicators for
these codes to ``A'' to indicate that the services associated with CPT
codes 0607T and 0608T are contractor-priced. Status indicator ``A''
means that items or services are paid under another fee schedule or
payment system or are contractor-priced by MACs. Because CPT codes
0607T and 0608T are contractor-priced by MACs under PFS, we are
assigning these services to status indicator ``A''.
We refer readers to Addendum D1 of this final rule with comment
period for the SI meanings for all codes reported under the OPPS.
Addendum D1 is available via the internet on the CMS website.
IV. OPPS Payment for Devices
A. Pass-Through Payment for Devices
1. Beginning Eligibility Date for Device Pass-Through Status and
Quarterly Expiration of Device Pass-Through Payments
a. Background
The intent of transitional device pass-through payment, as
implemented at Sec. 419.66, is to facilitate access for beneficiaries
to the advantages of new and truly innovative devices by allowing for
adequate payment for these new devices while the necessary cost data is
collected to incorporate the costs for these devices into the procedure
APC rate (66 FR 55861). Under section 1833(t)(6)(B)(iii) of the Act,
the period for which a device category eligible for transitional pass-
through payments under the OPPS can be in effect is at least 2 years
but not more than 3 years. Prior to CY 2017, our regulation at Sec.
419.66(g) provided that this pass-through payment eligibility period
began on the date CMS established a particular transitional pass-
through category of devices, and we based the pass-through status
expiration date for a device category on the date on which pass-through
payment was effective for the category. In the CY 2017 OPPS/ASC final
rule with comment period (81 FR 79654), in accordance with section
1833(t)(6)(B)(iii)(II) of the Act, we amended Sec. 419.66(g) to
provide that the pass-through eligibility period for a device category
begins on the first date on which pass-through payment is made under
the OPPS for any medical device described by such category.
In addition, prior to CY 2017, our policy was to propose and
finalize the 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.\22\
---------------------------------------------------------------------------
\22\ 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 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 14 device categories eligible for
pass-through payment. These devices are listed in Table 52 where we
detail the expiration dates of pass-through payment status for each of
the 14 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.D
of the CY 2023 OPPS/ASC proposed rule (87 FR 44680 through 44682), we
proposed 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.D, we did not propose to
provide any additional quarters of separate payments for any drug,
biological or device category whose pass-through payment status will
expire between December 31, 2022, and September 30, 2023. We solicited
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 payment status that expired between December 31, 2021, and
September 30, 2022. We note that in section I.V of the CY 2023 OPPS/ASC
proposed rule (87 FR 44578) CMS proposed not to provide additional
pass-through payments for any device categories expiring in CY2023. We
were silent on the issue of providing additional pass-through payments
for drugs and biologicals in both section I.V of the CY 2023 OPPS/ASC
proposed rule (87 FR 44578) and section (87 FR 44626 through 44627).
However, consistent with the CY 2022 OPPS/ASC final rule with comment
period (86 FR 63755), where 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
[[Page 71887]]
September 30, 2022 to mimic continued pass-through payment, we believe
it is appropriate to address not only the comments received with
respect to drugs and biologicals as they relate to providing additional
quarters of pass-through status payments, but also the impact of CMS'
finalized decision to resume the regular update process of using claims
from the year 2 years prior to the year for which we are setting rates
on drug and biological pass-through status payments.
Comment: Many commenters noted that the Covid-19 PHE persisted
through 2021 and into 2022, impacted beneficiary access to certain
drugs, biologicals, and devices, and disrupted product utilization.
Commenters expressed concern that the general reduction in utilization
of devices and services will be reflected in the 2021 claims data,
similar to what occurred with the 2020 data, and as such, the rationale
for continuing separate payments for pass-through technologies impacted
by the Covid-19 PHE remains just as pertinent for the CY 2023 OPPS/ASC
final rule as it was in CY 2022 OPPS/ASC final rule. Commenters
expressed further concern that using the 2021 claims data as proposed
will result in insufficient claims data, inaccurate rate-setting, lower
reimbursement rates that do not accurately reflect provider costs, and
improper APC assignments.
We received many comments specific to providing additional quarters
of separate payments for drugs and biologicals whose pass-through
payment status will expire between December 31, 2022 and December 30,
2023. One commenter stated that there continue to be major distortions
in the claims data impacting numerous specialties and that these
distortions significantly impacted the CY 2021 claims data used for the
CY 2023 rate-setting. Another commenter requested that CMS use its
equitable adjustment authority to extend the pass-through period for
all radiopharmaceuticals impacted by the ongoing COVID-19 public health
emergency (PHE), including the pass-through period for A9590 (Iodine I-
131, iobenguane). This commenter recommended that this pass-through
period extension continue as long as necessary to enable CMS to use
three full years of claims data outside of the PHE period to capture
radiopharmaceutical costs that will be packaged into nuclear medicine
APC payments after pass-through status ends. Several commenters
requested that CMS extend pass-through through December 31, 2024, for
Detectnet, which was granted pass-through status beginning January 2021
and, in addition to COVID-19 challenges, commenters cited claims
processing issues during CY 2021 that impacted utilization.
Response: We thank the commenters for their input. While we
appreciate the concerns expressed by the commenters, we do not agree
that 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, 2022.
Based on CMS' decision to finalize the proposal 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, we believe that the data collected for CY
2023 ratesetting will result in the necessary cost data being collected
and incorporated into the costs for these drugs, biologicals, and
devices into the procedure APC rate. Therefore, we believe that the
claims data used in CY 2023 OPPS ratesetting for procedures including
these drugs, biologicals, and devices with expiring pass-through status
is sufficient and an additional extension of separate payment to mimic
pass-through status is neither necessary nor appropriate. Due to clear
improvement between the CY 2020 claims data and the CY 2021 claims data
and CMS' return to the regular update process, we do not believe that
the circumstances that resulted in CMS utilizing our equitable
adjustment authority at section 1833(t)(2)(E) of the Act are similar to
the circumstances in CY 2022. Therefore, we are finalizing our proposal
to not provide any additional quarters of separate payments for any
drug, biological, or device category whose pass-through payment status
will expire between December 31, 2022, and December 30, 2023. We direct
readers to section X.B of this final rule with comment period for a
full discussion of use of claims data for CY 2023 OPPS/ASC payment
system ratesetting due to the PHE.
Comment: Many commenters stated their opposition to CMS's proposal
to not 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 for CY 2023. These commenters
encouraged CMS to use its legal authority under section 1833(t)(2)(E)
of the Act to extend pass-through payments for devices an additional
four quarters through CY 2023 due to a historic decline in utilization
during the COVID-19 pandemic.
Response: We thank the commenters for their input. Consistent with
the statute and regulations, under section 1833(t)(6)(B)(iii) of the
Act, the period for which a device category is eligible for
transitional pass-through payments under the OPPS can be in effect is
at least 2 years, but not more than 3 years (81 FR 79655). Once a
device category has received transitional pass-through payments for 2
to 3 years, the device category is no longer eligible for pass-through
payments and we utilize the 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).
The intent of transitional device pass-through payment, as
implemented at 42 CFR 419.66, is to facilitate access for beneficiaries
to the advantages of new and truly innovative devices by allowing for
adequate payment for these new devices while the necessary cost data is
collected to incorporate the costs for these devices into the procedure
APC rate (66 FR 55861). We note that device pass-through payment status
is intended to be temporary and we consider the cost data to be
included in the payment rates regardless of whether the technology's
use in the Medicare population has been frequent or infrequent during
the time period under which a device was receiving transitional pass-
through payments.
Recognizing some of the more acute effects of the Covid-19 PHE on
the utilization of devices with pass-through status in CY 2020, 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 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). However, we do
not believe that it is appropriate to adopt similar measures in CY 2023
based on CMS' decision to finalize the proposal 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. We believe that the data collected for CY
2023 ratesetting will result in the necessary cost data being collected
and
[[Page 71888]]
incorporated into the costs for these devices into the procedure APC
rate. Therefore, in this final rule with comment period, we are
finalizing our proposal to not 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 for
CY 2023. Again, we direct readers to section X.B of the this final rule
with comment period a full discussion use of claims data for CY 2023
OPPS/ASC payment system ratesetting due to the Covid-19 PHE.
Comment: We received a comment from Stryker requesting that the
pass-through status for SpineJack[supreg] (C1062, Intravertebral body
fracture augmentation with implant (e.g., metal, polymer)) continue
through CY 2024. Stryker noted concerns that there are unique
considerations that support extending the SpineJack[supreg] period
through CY 2024, including erroneous CMS National Correct Coding
Initiative (NCCI) claims edits, commercial Medicare claims submission
software errors, and insufficient CMS guidance on charging for the
components of the associated bone preparation kit. As such, Stryker
recommended that CMS use its equitable adjustment authority under
1833(t)(2)(E) to provide four quarters of additional separate pass-
through payment for SpineJack[supreg]/C1062, through December 31, 2024.
Response: We thank Stryker for providing information related to
SpineJack[supreg]. SpineJack[supreg] currently has pass-through status
through 2023. We note that the pass-through status for
SpineJack[supreg] expires on December 31, 2023, and will remain
effective throughout the OPPS CY 2023 final rule with comment period,
as such we will take the recommendations provided into consideration in
the CY 2024 rulemaking.
Comment: We received a number of comments seeking clarification on
whether several device category codes were omitted from Table 30
(Devices with Pass-Through Status (or Adjusted Separate Payment)
Expiring at the End of the Fourth Quarter of 2022, in 2023, or in 2024)
in the proposed rule.
Response: We appreciate the comments. In section IV.4.A.1 of the CY
2023 OPPS/ASC proposed rule, we stated that, ``Currently, there are
currently 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.'' While we correctly included
the amount of 11 device categories and included all of those device
categories in the CY 2023 proposed estimate of pass-through spending,
we erroneously omitted two device categories from Table 30 in the
proposed rule (84 FR 44579). The two device category codes that should
have been included are C1832 (Autograft suspension, including cell
processing and application, and all system components) and C1833
(Monitor, cardiac, including intracardiac lead and all system
components (implantable)). See Table 52 for the updated list of 14
device category codes where we detail the expiration dates of pass-
through payment status for each of the 14 devices currently receiving
device pass-through payment. Note that Table 52 includes the eight (8)
device category codes included in the proposed estimate of pass-through
spending with expiration dates in both 2023 and 2024, which includes
the device code C1831 that received preliminary approval upon quarterly
review effective October 1, 2021, and had pass-through payment status
in CY 2022. In addition, Table 52 includes three (3) device category
codes finalized in this final rule with comment period for a total of
11 device categories receiving pass-through payments effective January
1, 2023.
Comment: We received a number of comments noting discrepancies in
the dates provided in Table 30 of the CY 2023 OPPS/ASC proposed rule.
Specifically, commenters noted that six (6) HCPCS codes included in
Table 30 with a December 31, 2022, expiration date were later
identified as estimated expenditures for CY 2023 in section VI. B.,
Proposed Estimate of Pass-Through Spending for CY 2023 (87 FR 44660),
which suggested that the pass-through status for these codes continued
in CY 2023. These six (6) HCPCS codes with CY 2022 expiration dates
were identified as C1823 (Generator, neurostimulator (implantable),
nonrechargeable, with transvenous sensing and stimulation leads), C1824
(Generator, cardiac contractility modulation (implantable)), C1982
(Catheter, pressure-generating, one-way valve, intermittently
occlusive), C1839 (Iris prosthesis), C1734 (Orthopedic/device/drug
matrix for opposing bone-to-bone or soft tissue-to bone (implantable)),
and C2596 (Probe, image-guided, robotic, waterjet ablation).
Response: We thank the commenters for their feedback. While those
six (6) HCPCS codes listed in Table 30 contained correct CY 2022
expiration dates (87 FR 44579), we inadvertently included these codes
in section VI.B., Proposed Estimate of Pass-Through Spending for CY
2023 (87 FR 44660). The six (6) HCPCS codes that were inadvertently
included in the estimate of pass-through spending for CY 2023 were
C1823 (Generator, neurostimulator (implantable), nonrechargeable, with
transvenous sensing and stimulation leads), C1824 (Generator, cardiac
contractility modulation (implantable)), C1982 (Catheter, pressure-
generating, one-way valve, intermittently occlusive), C1839 (Iris
prosthesis), C1734 (Orthopedic/device/drug matrix for opposing bone-to-
bone or soft tissue-to bone (implantable)), and C2596 (Probe, image-
guided, robotic, waterjet ablation).
In addition, consistent with the final approval for device-pass
through payment status of C1831 (Personalized, anterior and lateral
interbody cage (implantable)), as described in section IV.2.b.1 of this
final rule with comment period, we have added C1831 to Table 52 in this
final rule with comment period. We inadvertently did not include C1831
in Table 30 in the CY 2023 OPPS/ASC proposed rule. However, as the
device code received preliminary approval upon quarterly review
effective October 1, 2021 and had pass-through payment status in CY
2022, the device HCPCS code should have been included in Table 30 in
the CY 2023 OPPS/ASC proposed rule. Table 52 has been updated to
reflect the inclusion of C1831. Finally, HCPCS codes C1832 (Autograft
suspension, including cell processing and application, and all system
components) and C1833 (Monitor, cardiac, including intracardiac lead
and all system components (implantable)) were included in the proposed
estimate of pass-through spending for CY 2023 (87 FR 44660) but did not
appear in Table 30 in the CY 2023 OPPS/ASC proposed rule. Both C1832
and C1833 have been added to Table 52 in this final rule. These device
categories were approved for device pass-through effective January 1,
2022. As such, device category HCPCS codes C1831, C1832, and C1833 that
were omitted from Table 30 in the proposed rule have been added to
Table 52 in this final rule with comment period, and the six (6) HCPCS
codes discussed above that were inadvertently included in the estimate
of pass-through spending for CY 2023 have been removed to accurately
reflect the final estimate of pass-through spending as part of 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.
[[Page 71889]]
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 52 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
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[[Page 71890]]
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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 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
[[Page 71891]]
determination process. Device pass-through applications are still
submitted to CMS through the quarterly subregulatory process, but the
applications are 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: https://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 eight 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 aprevoTM 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, aprevoTM Intervertebral Body Fusion is discussed
in section IV.2.b.1 of this final rule with comment period.
Applications received for the later deadlines for the remaining
2022 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) aprevoTM Intervertebral Body Fusion Device
Carlsmed, Inc. submitted an application for a new device category
for transitional pass-through payment status for aprevoTM
Intervertebral Fusion Device (aprevoTM) 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
aprevoTM device is additively manufactured and made from
Titanium Alloy (Ti-6Al-4V) per ASTM F3001, and has a cavity intended
for the packing of bone graft. In addition, the applicant explained
that aprevoTM is used with supplemental fixation devices and
bone graft packing. Per the applicant, the device was formerly known as
``CorraTM.''
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
[[Page 71892]]
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 claimed that
aprevoTM 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, aprevoTM 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 aprevoTM. Per the applicant, other stock devices
do not match the anatomy of each patient precisely. The applicant
stated, in contrast, aprevoTM 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.
AprevoTM is indicated for use as an adjunct to fusion at
one or more levels of the lumbar spine in patients having an Oswestry
Disability Index (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 autologous 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),
aprevoTM 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 aprevoTM 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
aprevoTM on May 27, 2021, which is within 3 years of the
date of the initial FDA marketing authorization of both indications. We
solicited public comment on whether aprevoTM meets the
newness criterion.
We did not receive public comments regarding whether
aprevoTM meets the newness criterion at Sec. 419.66(b)(1).
Because we received the aprevoTM pass-through application on
May 27, 2021, which is within 3 years of July 1, 2020, December 3,
2020, and June 30, 2021, the dates of FDA Breakthrough Device
designation and 510(k) clearance, we have concluded that
aprevoTM meets the newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, aprevoTM 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
aprevoTM 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
solicited public comments on whether aprevoTM meets the
eligibility criteria at Sec. 419.66(b).
Response: The applicant submitted a comment reiterating that
aprevoTM meets the eligibility criteria at Sec.
419.66(b)(3) and (4). Based on the information we have received and our
review of the application, we agree with the applicant that
aprevoTM is used for one patient only, comes in contact with
human tissue, and is surgically implanted or inserted, and therefore
meets the requirements in Sec. 419.66(b)(3). We also agree that
aprevoTM meets the device eligibility requirements of Sec.
419.66(b)(4) because it is not equipment, an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, and it is not a supply or material furnished incident to a
service. Based on this assessment we have determined that
aprevoTM meets the eligibility criteria at Sec.
419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. The
applicant describes aprevoTM 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 aprevoTM because
none of the existing codes pertain to a patient-specific spinal
interbody fusion device and, therefore, do not encompass
aprevoTM.
We stated in the CY 2023 OPPS/ASC proposed rule that we had not
identified an existing pass-through payment category that describes
aprevoTM and we solicited public comment on whether
aprevoTM meets the device category criterion.
We did not receive any comments on whether aprevoTM
meets the criteria for establishing new device categories specified at
Sec. 419.66(c)(1). We continue to believe that there is not an
existing pass-through payment category that describes
aprevoTM because none of the existing codes pertain to a
patient-specific spinal interbody fusion device. Based on this
information we have determined that aprevoTM meets the
device category eligibility criterion at Sec. 419.66(c)(1). The second
criterion for establishing a device category, at Sec. 419.66(c)(2),
provides that CMS determines either of the following: (i) That a device
to be included in the category has demonstrated that it will
substantially improve the diagnosis or treatment of an illness or
injury or
[[Page 71893]]
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).
AprevoTM 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
aprevoTM would be reported with HCPCS codes in Table 53.
[GRAPHIC] [TIFF OMITTED] TR23NO22.069
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 aprevoTM 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 aprevoTM 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 stated in the CY 2023 OPPS/ASC proposed
rule that we believe aprevoTM 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 $26,000 for
aprevoTM 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 stated in
the CY 2023 OPPS/ASC proposed rule that we believe aprevoTM
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 aprevoTM 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 stated in the CY 2023 OPPS/ASC proposed rule that we believe that
aprevoTM meets the third cost significance requirement.
[[Page 71894]]
We solicited public comment on whether aprevoTM meets
the device pass-through payment criteria discussed in this section,
including the cost criterion for device pass-through payment status.
Comment: The applicant provided a comment reiterating that
aprevoTM meets the cost significance requirements.
Response: We thank the applicant for reiterating that
aprevoTM meets the cost significance requirements specified
at Sec. 419.66(d). Based on our findings from the first, second, and
third cost significant tests, we believe that aprevoTM meets
the cost significance criterion specified at Sec. 419.66(d).
Comment: The applicant commented on the cost criteria calculations
and requested that CMS evaluate and adjust the device offset amount
associated with the use of the aprevoTM interbody device to
reflect only the interbody device-related costs for the procedure.
Specifically, the applicant noted that CMS used APC 5115 for the
calculations, which had a CY 2021 payment rate of $12,314.76 at the
time the application was received, and a device-related portion of the
APC payment amount for the related service of $6,851.93.
The applicant requested that we also consider that the applicable
HCPCS code used in this analysis (22633: Arthrodesis, combined
posterior or posterolateral technique with posterior interbody
technique including laminectomy and/or discectomy sufficient to prepare
interspace (other than for decompression), single interspace lumbar),
describes a procedure requiring both the posterior interbody fusion and
posterolateral fusion. The posterolateral fusion is performed using
screws, rods and bone graft. The applicant asserted that
aprevoTM does not replace all existing technologies used in
this procedure because the interbody device is not applicable to the
posterolateral fusion.
Response: We appreciate the applicant's input and additional
information regarding the device criterion and associated offset. We
have evaluated the information provided by the applicant and agree that
we should adjust the off-set amount associated with the use of the
aprevoTM interbody device to $0. We refer the reader to
Addendum B of this CY 2023 OPPS/ASC with comment period for APC payment
rates.
Comment: We received one comment in support of finalizing pass-
through payment status for aprevoTM. The commenter stated
that with new developments in personalized medicine moving forward, the
innovation in products uniquely suited to an individual patient's
anatomy offers a promising future for patient care.
Response: We appreciate the commenter's support.
After considering the public comments we received and our review of
the device pass-through application, we are finalizing approval of
device pass-through payment status for aprevoTM under the
alternative pathway for devices that have an FDA Breakthrough Device
designation and FDA market authorization for the indication for which
the device has Breakthrough Device designation. Therefore, we will
continue the device pass-through payment status for
aprevoTM.
Comment: We received comments from the applicant requesting that we
change the device descriptor for C1831 to include the posterior/
transforaminal approach. In addition, we received a request from the
applicant to remove CPT code 22612 as an applicable code with which to
bill devices described by C1831. AprevoTM was granted
multiple FDA clearances, all of which collectively cover the different
approaches in which the device can be implanted into the patient (from
the front, side, or back of the patient). AprevoTM 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
aprevoTM lateral lumbar interbody fusion devices) on
December 3, 2020. In addition, the applicant received 510(k) clearance
from FDA for the Transforaminal (posterior) Intervertebral Body Fusion
(IBF) device on June 30, 2021. We received a new device category for
transitional pass-through payment status application for
aprevoTM on May 27, 2021. AprevoTM was approved
for device pass-through payment during the quarterly review process and
received fast-track approval under the alternative pathway effective
October 1, 2021.
AprevoTM was temporarily assigned the HCPCS code C1831
(Personalized, anterior and lateral interbody cage (implantable)). The
associated MLN Matters October 2021 publication provided the following
instruction: ``Always bill the device(s) in the category described by
HCPCS code C1831 with 1 of the primary CPT codes 22558, 22586, 22612,
22630, or 22633 and add-on code 22853 or 22854.'' Subsequent to C1831
being created, CMS added CPT codes 22558 and 22586 (the anterior and
lateral implant placement procedures) to the inpatient only list (IPO).
As such, C1831 can no longer be billed with CPT codes 22558 and 22586
as an OPPS service. However, C1831 may be billed with CPT codes 22612,
22630 and 22633 (the posterior/transforaminal implant placement
procedures).
In response to this, the applicant requested that CMS take two
actions: First, the applicant requested that CMS modify the current
C1831 long descriptor, ``Personalized, anterior and lateral interbody
cage (implantable)'' to read ``Personalized posterior interbody cage
(implantable).'' The applicant stated that the current long descriptor
includes ``anterior and lateral'' both of which are now on the IPO
list, but does not include the posterior/transforaminal approach, which
is not on the IPO list. The applicant provided that the
aprevoTM device utilized for the posterior/transforaminal
approach received FDA 510(k) clearance on June 30, 2021, and as such,
the posterior/transforaminal approach should be included in the long
descriptor.
Second, the applicant asserts that the inclusion of CPT code 22612
in the October 2021 MLN Matters article as an applicable code with
which to bill devices described by C1831 is incorrect. As such, the
applicant requested that CPT code 22612 be removed as an applicable
code with which to bill devices described by C1831. The applicant
asserts that that 22612 is not an interbody fusion procedure because,
while it describes a posterolateral fusion, it is different from a
posterior interbody fusion. The posterolateral fusion, 22612, involves
fusing the back area of the spine, along the sides of the vertebrae,
without doing an interbody fusion.
Response: We thank the applicant for their comments. We agree with
the applicant that the long descriptor for C1831 should be updated to
include the posterior interbody implant device which is surgically
placed through the posterior/transforaminal approach. However, we
believe that the anterior and lateral implant devices should remain in
the long descriptor at this time in the event that the surgical
procedures for their placement are removed from the IPO list in the
future. As such, we will revise the long descriptor for C1831 effective
January 1, 2023, to read: ``Interbody cage, anterior,
[[Page 71895]]
lateral or posterior, personalized (implantable).'' We believe this
description addresses all potential approaches. We also agree with the
applicant that CPT code 22612 was incorrectly included in the October
2021 MLN Matters article as an applicable code with which to bill
devices described by C1831. Therefore, CMS will provide updated
instructions in the January 2023 MLN Matters article reflecting the
removal of CPT code 22612 as applicable code with which to bill devices
described by C1831. In addition, we have determined that CPT code 22632
and CPT code 22634 are applicable codes with which to bill devices
described by C1831. As such, CMS will provide updated instructions in
the January 2023 MLN Matters article reflecting the addition CPT code
22632 and CPT code 22634 as applicable codes with which to bill devices
described by C1831.
(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.\23\ 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.\24\
---------------------------------------------------------------------------
\23\ 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.
\24\ 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 solicited public comment on whether the
Vivistim[supreg] System meets the newness criterion.
Comment: With respect to the newness criterion at Sec.
419.66(b)(1), the applicant reiterated that Vivistim[supreg] System
received FDA marketing authorization on August 27, 2021. The applicant
also noted that a manufacturing delay prevented market availability of
the device until April 29, 2022. The applicant requested that CMS begin
the newness period for the Vivistim[supreg] System using the latter
market availability date of April 29, 2022.
Response: We appreciate the commenter's input. Because we received
Vivistim[supreg] System's pass-through application on September 1,
2021, which is within 3 years of August 27, 2021, the date of FDA
premarketing approval, we agree that the Vivistim[supreg] System meets
the newness criterion, and as such we do not need to consider using the
date on which the Vivistim[supreg] System was first marketed, April 29,
2022.
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 noted that the external components
SAPS and WT were 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
claimed that Vivistim[supreg] 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 noted that the external
[[Page 71896]]
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 solicited public comments on whether
Vivistim[supreg] System meets the eligibility criteria at Sec.
419.66(b).
Comment: In response to our concern 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
provided that, like other implantable neurostimulator systems, the
Vivistim[supreg] System includes implantable components and external
components. The applicant stated that Vivistim[supreg] System (the IPG
and Lead) 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. The
applicant further noted the following: the external components
communicate remotely with the implantable pulse generator, are integral
to the function of the Vivistim[supreg] System, and the implanted
components (the IPG and Lead) cannot work as intended without the
external paired stimulation controller and vice versa. In addition, the
applicant asserted that the existence of external components within an
FDA-approved neurostimulator system does not negate eligibility under
Sec. 419.66(b)(3). The applicant further provided that the FDA
approval for the Vivistim[supreg] System does not acknowledge a
distinction between implanted and non-implanted components, which are
collectively approved as a ``device.'' The applicant clarified that
this is not unique to the Vivistim[supreg] System since each of the
neurostimulator systems for which a new device category was previously
created (C1820, C1822, C1823, C1825) are provided with a reusable
clinical interface (i.e., remed[emacr][supreg] System Programmer Model
1102A1; Nevro[supreg] HF10 Clinician Programmer PG20002; CVRx[supreg]
Programmer System Model 90103). The applicant asserted that the
existence of reusable, external clinical interfaces does not, and has
not, historically been construed to negate eligibility under Sec.
419.66(b)(4).
In response to our concern 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), the applicant again clarified that existence of a
reusable clinical user interface is neither unique to the
Vivistim[supreg] System nor negates eligibility under Sec.
419.66(b)(4). The applicant stated the Vivistim[supreg] System external
paired stimulation controller is provided at no cost under a loaner
agreement, where ownership of the device is retained by the
manufacturer
Response: We appreciate the additional information from the
applicant with respect to whether the device meets the criteria in
Sec. 419.66(b)(3) and (4). Based on the information we have received
and our review of the application, we agree with the applicant that the
applicable components of the device are used for one patient only, come
in contact with human tissue, and are surgically implanted or inserted.
As such, we agree that Vivistim[supreg] System meets the eligibility
criterion specified at Sec. 419.66(b)(3)). While we agree that
Vivistim[supreg] System meets the eligibility criterion specified at
Sec. 419.66(b)(3)), we note that the criteria FDA utilizes to grant
medical device approvals differ from the criteria CMS has established
to evaluate device eligibility for OPPS device pass-through payments.
Based on the clarification provided by that applicant that they
retain and maintain the Vivistim[supreg] System external paired
stimulation controller (the reusable hardware components) at no charge
to the providers via a loaner agreement, and ownership of the device is
retained by the manufacturer, we agree with the applicant that the
applicable components meet the device eligibility requirements of Sec.
419.66(b)(4) because they are not equipment, an instrument, apparatus,
implement, or item for which depreciation and financing expenses are
recovered, and they are not a supply or material furnished incident to
a service. We agree and conclude that the Vivistim[supreg] System
device meets the eligibility requirements at Sec. 419.66(b)(4).
Based on this assessment we have determined that the
Vivistim[supreg] System meets the eligibility criterion at Sec.
419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996.
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 Table 54.
[[Page 71897]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.070
Per the applicant, the codes in Table 54 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.
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
[[Page 71898]]
C1825, the BaroStim NeoTM (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. We noted that it
was 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 solicited public comment on
whether the Vivistim[supreg] System meets the device category
criterion.
Comment: In response to our concern that the Vivistim[supreg]
System may be appropriately described by C1767, the applicant sought to
clarify the characterization provided in the application of the VNS
Therapy[supreg] System (LivaNova, PLC) as an ``always-on'' stimulation
delivery system. The applicant stated that this description was not
meant to imply that the VNS Therapy[supreg] System is delivering
continuous stimulation or that it lacks programmable stimulation
features. Rather, the applicant stated that it intended to communicate
that, in normal mode, the VNS Therapy[supreg] System is designed to
deliver stimulation at preprogrammed intervals throughout the day and
night (typically 5 minutes off, 30 seconds on) and normal mode settings
result in approximately 130 minutes of stimulation daily at 1.5 mA.
Further, the applicant noted that while in normal mode, the patient
controller allows for the patient to turn off the system during certain
activities such as speaking, exercise or eating, or to deliver a burst
of stimulation when an impending seizure is sensed. However, outside of
these circumstances, the VNS Therapy[supreg] System (LivaNova, PLC) is
designed to deliver stimulation at regular intervals throughout the day
and night (e.g., ``always on''). Conversely, in comparison to its
device, the applicant stated that the Vivistim[supreg] System is not
set to deliver stimulation on a pre-defined schedule, but to pair
stimulation with specific movements during in-clinic therapy. The
applicant reiterated that no current category appropriately describes a
neurostimulator that is actively paired with movement during
rehabilitation by a skilled therapist where she/he instructs the
patient to perform upper limb rehabilitation exercises and delivers
stimulation using a push-button feature of the external paired
stimulation controller (i.e., the face-to-face, manual delivery of
stimulation by a skilled therapist is necessary to pair stimulation
with the specific time point when it will be most effective), and this
``event-pairing'' of stimulation delivery that has been shown in
clinical studies to deliver 2-3X the clinical benefit of intense
rehabilitation alone. For example, the applicant stated that the
circuitry of the Vivistim[supreg] System implantable pulse generator is
uniquely designed to communicate at a distance with the external paired
stimulation controller. The applicant specifically noted that the
Vivistim[supreg] System IPG uses a medical implant communication system
(MICS 403 MHz) with an effective range of 1-2 meters from the patient's
body. The applicant asserted that this feature allows the external
paired stimulation controller to communicate with the IPG from a
greater distance, while the patient is actively moving. The applicant
stated the VNS Therapy[supreg] devices (LivaNova, PLC) contain
circuitry that communicates by inductive link communication, a
different communication protocol, which limits the effective
communication range to ~3-4 cm from the patient's body and utilizes a
slower data transfer rate. The applicated further provided that during
in-clinic therapy, stimulation is only delivered at a precise time-
point by a skilled therapist to maximize the clinical effect. The
applicant stated as a result, the Vivistim[supreg] System delivers only
9 minutes of stimulation at 0.8 mA during a typical in-clinic therapy
session day.
In response to our concern that IPG of the Vivistim[supreg] System
can also be patient-engaged with a magnetic card, allowing the patient
to continue therapy at home using the Vivistim[supreg] System and
therefore, may be appropriately described by C1767, the applicant
agreed patient-engaged features are common to neurostimulator devices.
However, the applicant asserted that the existence of common features
in the device should not negate the novelty of an in-clinic paired
therapeutic delivery by a skilled therapist. In addition, the applicant
clarified that the unique feature of the Vivistim[supreg] System is the
external paired stimulation controller, not the patient-engaged
features of the device. As such, the applicant asserted the
Vivistim[supreg] System meets the first criterion for establishing a
new device category at Sec. 419.66(c)(1) because there are no existing
categories established for device TPT that describe the
Vivistim[supreg] System.
Response: After consideration of the public comment that we
received from the applicant, we agree there is no existing pass-through
payment category that appropriately describes the Vivistim[supreg]
System because no current category appropriately describes a
neurostimulator that is actively paired with movement during
rehabilitation by a skilled therapist where she/he instructs the
patient to perform upper limb rehabilitation exercises and delivers
stimulation using a push-button feature of an external paired
stimulation.
Based on this information, we have determined that Vivistim[supreg]
System meets the first eligibility criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
That a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of the FDA's Breakthrough Devices Program and has
received FDA
[[Page 71899]]
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 48975 through 48977).
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 criteria for device pass-through payment status, a
device must pass all three tests of the cost criteria 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 criteria, 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 stated that 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 stated that 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 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 stated that we believe that Vivistim[supreg] System meets the third
cost significance requirement.
We solicited public comment on whether Vivistim[supreg] System
meets the device pass-through payment criteria discussed in this
section, including the cost criteria for device pass-through payment
status.
We did not receive any comments with regard to any of the cost
significance requirements specified at Sec. 419.66(d). Based on our
findings from the first, second, and third cost significant tests, we
believe that the Vivistim[supreg] System meets the cost significance
criteria specified at Sec. 419.66(d).
After consideration of the public comments we received and our
review of the device pass-through application, we have determined that
the Vivistim[supreg] System meets the requirements for device pass-
through payment status described at Sec. 419.66. As stated previously,
devices that are granted an FDA Breakthrough Device designation are not
evaluated in terms of the current substantial clinical improvement
criterion at Sec. 419.66(c)(2)(i) for purposes of determining device
pass-through payment status, but must meet the other criteria for
device pass-through status, and we believe Vivistim[supreg] System
meets those other criteria. Therefore, effective beginning January 1,
2023, we are finalizing approval for device pass-through payment status
for Vivistim[supreg] System under the alternative pathway for devices
that have an FDA Breakthrough Device designation and have received FDA
marketing authorization for the indication covered by the Breakthrough
Device designation.
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
[[Page 71900]]
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 solicited public comments on whether
the BrainScope TBI meets the newness criterion.
We did not receive public comments in regard to whether the
BrainScope TBI meets the eligibility criteria at Sec. 419.66(b)(1).
Based on the fact that the BrainScope TBI application was received on
February 23, 2022, within 3 years of the date of the initial FDA
marketing authorization, we agree with the applicant that the
BrainScope TBI meets the criteria of Sec. 419.66(b)(1).
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 noted that while the Ahead 500
component is used for one patient only and 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 noted 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 questioned 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 solicited public comments on whether the
BrainScope TBI meets the eligibility criteria at Sec. 419.66(b).
We did not receive public comments regarding whether the BrainScope
TBI meets the eligibility criteria at Sec. 419.66(b)(3) or (4). With
respect to the eligibility criterion at Sec. 419.66(b)(3), in the
proposed rule, we noted that the Ahead 500 component of BrainScope TBI
is not surgically implanted or inserted or applied in or on a wound or
other skin lesion. In addition, we noted that the other component of
the BrainScope TBI, the Handheld Device, is used by multiple patients,
does not come in contact with the patient's tissue, and 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).
With respect to the eligibility criterion at Sec. 419.66(b)(4),
based on the information provided in the application, we have
determined that the Handheld Device component of the BrainScope TBI is
an instrument, apparatus, implement, or item for which depreciation and
financing expenses are recovered in accordance with the device
eligibility requirements in the proposed rule and, as such, does not
meet the eligibility criteria at Sec. 419.66(b)(4).
BrainScope TBI does not meet the eligibility criteria to be
considered a device for transitional pass-through payment. Therefore,
we did not evaluate the product on the other criteria required for
transitional pass-through payment for devices, including, existing or
previous categories, the substantial clinical improvement criterion,
and the cost criteria. We are not approving BrainScope TBI for
transitional pass-through payment status for CY2023 because the product
does not meet the eligibility criteria to be considered a device.
We note that we received public comments with regard to the cost
criteria for this device, but, because we have determined that the
device does not meet the eligibility criteria and therefore, is not
eligible for approval for transitional pass-through payment status for
CY 2023, we are not summarizing comments received or making a
determination on those criteria in this final rule.
(2) NavSlimTM and NavPencil
Elucent Medical, Inc. submitted an application for a new device
category for transitional pass-through payment status for CY 2023 for
the NavSlimTM 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,\25\ the Navigators are a component of the applicant's
EnVisioTM Navigation System \26\ which is intended only for
the non-imaging detection and localization (by navigation) of a
SmartClipTM Soft Tissue Marker (SmartClipTM) that
has been implanted in a soft tissue biopsy site or a soft tissue site
intended for surgical removal.\27\ We noted in CY 2023 OPPS/
[[Page 71901]]
ASC proposed rule that the applicant submitted a separate application
for pass-through payment status for the SmartClipTM 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
EnVisioTM Navigation System components and the
SmartClipTM, 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
EnVisioTM Navigation System activate the implanted
SmartClipTM within a 50cm x 50cm x 35cm volume. The
applicant further explained that the SmartClipTM contains an
application-specific integrated circuit (ASIC) which is activated at a
specific frequency and communicates to the EnVisioTM
Navigation System the precise, real-time location of both the
SmartClipTM 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).
---------------------------------------------------------------------------
\25\ As explained later in this section, the applicant received
FDA 510(k) clearance for the EnVisioTM Navigation System,
which includes the Navigators.
\26\ The FDA 510(k) Summary for the EnVisioTM
Navigation System states that the EnVisioTM 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 EnVisioTM
Navigation System.
\27\ The SmartClipTM has a separate FDA 510(k)
clearance. Based on the FDA 510(k) Summary for the
EnVisioTM Navigation System, the SmartClipTM
does not appear to be part of the EnVisioTM Navigation
System.
---------------------------------------------------------------------------
The applicant stated that there are two types of Navigators: (1)
the NavSlimTM (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 EnVisioTM
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
\28\ 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.
---------------------------------------------------------------------------
\28\ 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 EnVisioTM Navigation System (which, as explained
previously, includes the Navigators) for the non-imaging detection and
localization (by navigation) of a SmartClipTM 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. In the
CY 2023 OPPS/ASC proposed rule, we solicited public comments on whether
the Navigators meet the newness criterion.
Comment: The applicant stated that the pass-through payment
application for the Navigators was submitted within 3 years of the date
of the initial FDA marketing authorization.
Response: We appreciate the applicant's input. Because we received
the Navigator pass-through payment application on February 28, 2022,
which is within 3 years of March 22, 2019, the date of FDA premarketing
approval, we agree that 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 required at Sec.
419.66(b)(3).\29\ The FDA 510(k) Summary (K183400) states that the
Navigator is a sterile, non-patient contacting, single-use device. In
the CY 2023 OPPS/ASC proposed rule, we stated that 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
[[Page 71902]]
surgical kit, or clip, other than radiological site marker). In the CY
2023 OPPS/ASC proposed rule, we solicited public comments on whether
the Navigators met the eligibility criteria at Sec. 419.66(b).
---------------------------------------------------------------------------
\29\ In the proposed rule, we noted that by contrast, the
SmartClipTM, discussed in the next section of this
preamble, is inserted into human tissue.
---------------------------------------------------------------------------
Comment: The applicant stated that the Navigators are single use
devices intended for one patient only, and that without the Navigators,
real-time surgical navigation using the Elucent system cannot be
performed. The applicant asserted that, after attachment of a Navigator
to the electrocautery tool, the surgeon runs a calibration step which
allows the system to provide the precise location of the electrocautery
tool tip relative to the SmartClipTM marker (implanted in or
around the intended target). According to the applicant, this enables
precise navigation to the tissue and surgeon-identified margins for
excision. The applicant further stated the Navigator is inserted into
the patient (generally into a surgical wound) as the surgeon uses the
electrocautery tool to perform each component of the tissue excision,
during which the Navigators come into temporary contact with patients'
tissue. The applicant noted that the safety of this temporary contact
has been confirmed through biocompatibility testing in accordance with
ISO 10993.
In addition, the applicant stated that the Navigators meet
eligibility requirements of Sec. 419.66(b)(4) in that the Navigators
are not (1) pieces of equipment, instruments, apparatus, implements, or
items for which depreciation and financing expenses are recovered as
depreciable assets (the applicant noted that the Navigators are single
use patient devices); (2) materials or supplies furnished incident to a
service (for example, a suture, customized surgical kit, or clip, other
than radiological site marker). The applicant noted that the Navigators
are utilized for real time three-dimensional surgical navigation.
Response: We appreciate the applicant's input. Based on the
information we have received and our review of the application, we
agree with the applicant that the Navigators are integral to the
service provided, used for one patient only, come in contact with human
tissue, and are surgically implanted or inserted or applied in or on a
wound or other skin lesion. In addition, we agree with the applicant
that the Navigators meet the device eligibility requirements of Sec.
419.66(b)(4) because they are not equipment, instruments, apparatus,
implements, or items for which depreciation and financing expenses are
recovered, and they are not supplies or materials furnished incident to
a service. Therefore, based on the public comments we have received and
our review of the application, we have determined that the Navigators
meet the eligibility criteria at Sec. 419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. 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. We
stated in the CY 2023 OPPS/ASC proposed rule that, upon review, it does
not appear that there are any existing pass-through payment categories
that might apply to the Navigators. We solicited public comments on
whether the Navigators meet the device category criterion.
Comment: The applicant asserted that the Navigators are not
currently described by any existing categories or any category
previously in effect and were not being paid as an outpatient service
as of December 31, 1996. The applicant clarified that in its
application it sought to compare the Navigators to single use
duodenoscopes for descriptive purposes only. According to the
applicant, both products are designed to offer high performance in a
single patient use device and provide clinical guidance during a
medical procedure, and that both products reduce infection rates that
may be a result of improper reprocessing. In addition, the applicant
stated that both products provide guidance to diseased targeted tissue
and demonstrate the precise location for targeted tissue removal.
However, the applicant emphasized that the products are completely
different in form and reflect different clinical uses. Per the
applicant, the duodenoscope is an endoscope used endoluminally in the
GI tract (vs. surgically for Navigators) for different clinical
conditions (removal of gallstones, endoscopic retrograde
cholangiopancreatography (ERCP), evaluation of the bile and pancreatic
ducts with potential interventions). In contrast, the applicant stated
that the Navigators are attached to an electrocautery device and are
intended to guide physicians to surgical margins through an open
surgical wound during excision of diseased or malignant tissue.
Response: We agree with the applicant that the Navigators can be
differentiated from devices in HCPCS code C1748, including single use
duodenoscopes, and that there is no current or previously in effect
category that describes the Navigators. After consideration of the
public comments we received, we continue to believe that there is not a
current or previously existing pass-through payment category that
describes the Navigators, and therefore, the Navigators meet the device
category eligibility criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of 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
[[Page 71903]]
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 reduce 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 EnVisioTM Navigation System and
SmartClipTM compared to wire localization (WL) on operative
times, specimen volumes, margin positivity, and margin re-excision
rates.\30\ 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
55cm3 with WL versus 36cm3 with ESL (p=0.0012).
In those with measurable tumor volume, excess tissue excised was larger
with WL compared to ESL (median=73.2cm3 versus
52.5cm3, 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.
---------------------------------------------------------------------------
\30\ 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.\31\ The paper presented three cases from the
Moffitt Cancer Center, including radiographic and other images,
employing three different methods of breast mass localization: (1)
SmartClipTM, (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 SmartClipTM
localizers, SAVI SCOUT[supreg] localizers, and wire localizers.
---------------------------------------------------------------------------
\31\ 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.\32\
---------------------------------------------------------------------------
\32\ 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
SmartClipTM. The authors noted that the
SmartClipTM is the first device to provide three-plane
localization information. The authors stated that a monitor displays
the approximate position of the SmartClipTM allowing
everyone in the operating room to assist with the localization of the
SmartClipTM and provide knowledge of its location prior to
and throughout the surgery. They further noted that the
SmartClipTM 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 SmartClipTM.
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 SmartClipTM 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
SmartClipTM, 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 SmartClipTM in clinical
practice.
[[Page 71904]]
In addition, the applicant provided two physician case reports,
each describing the use of the EnVisioTM Navigation System
and SmartClipTM 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 SmartClipTM or
EnVisioTM Navigation System. In the first surgical case
report,\33\ the surgeon noted that the foot pedal activation of the
EnVisioTM Navigation System allowed toggling between two
SmartClipTM 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,\34\ the surgeon similarly
noted that the EnVisioTM Navigation System helped her to map
out and be more precise in her incision location and lumpectomy
dissection.
---------------------------------------------------------------------------
\33\ Kruper, Laura, Bracketing Lobulated Breast Lesion with the
EnVisioTM Navigation System using Differentiated
SmartClipTM.
\34\ Henkel, Dana, Single SmartClipTM Case.
---------------------------------------------------------------------------
The applicant also submitted several articles in general support of
its application, which we summarized in the CY 2023 OPPS/ASC proposed
rule 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%.\35\ 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.\36\ 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.\37\ 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.\38\ 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.\39\ 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.\40\ 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.\41\
---------------------------------------------------------------------------
\35\ 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.
\36\ 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.
\37\ 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.
\38\ 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.
\39\ 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.
\40\ 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.
\41\ 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 noted the
following concerns in the CY 2023 OPPS/ASC proposed rule. We noted that
the first study appeared to be unpublished, and it was not clear
whether it had been submitted for publication in a peer-reviewed
journal. In addition, we stated that the study involved a sample of 97
patients from one institution and appeared 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, we indicated that 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 noted a potential concern regarding practice/
selection effects bias inherent in the methodology presented.
In addition, we noted that the second article was an undated,\42\
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. We also explained
that the paper did not systematically compare the techniques across any
measurable variables and the authors indicated that a clinical study
was underway at the institution to evaluate the SmartClipTM
in clinical practice. Similarly, we noted that the physician case
reports were solely descriptive in nature--they presented each
physician's anecdotal experience using the EnVisioTM
Navigation System and SmartClipTM. Furthermore, we noted
that the applicant provided several additional articles that, while
informative, did not involve the Navigators and did not appear to
directly support the applicant's claim of substantial clinical
improvement. We stated that we would welcome additional information and
evidence from larger, multi-center studies that provide comparative
outcomes between the Navigators and existing technologies.
---------------------------------------------------------------------------
\42\ Although the applicant reported the date of the study as
January 2021, the copy of the study provided by the applicant was
not dated.
---------------------------------------------------------------------------
In the CY 2023 OPPS/ASC proposed rule, we further stated 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
[[Page 71905]]
marker migration, as claimed by the applicant. In addition, we
indicated that 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 stated in the
proposed rule that we would welcome additional evidence of substantial
clinical improvement in cases related to non-breast cancer related
procedures.
We solicited public comments on whether the Navigators meet the
substantial clinical improvement criterion.
Comment: All commenters addressing the substantial clinical
improvement criterion offered support for approval of the application.
Some commenters, including the applicant, noted that for many
years, the standard of care for breast conservation surgery has been
wire localization and that little progress has been made. Such
commenters noted that compared to the investments and advances that
have been made in surgical technologies for other types of cancer
(including male-predominant cancers such as prostate cancer) to reduce
positive margin rates and increase quality of life, the tools for
breast cancer surgery have remained limited. According to commenters,
advances in surgical technologies for other types of cancer have
included minimally invasive approaches inclusive of laparoscopic as
well as robotic surgery, image-fusion, and advanced navigation. Such
commenters considered the under-resourcing of breast surgery to be an
equity issue due to the fact that breast surgery is primarily performed
on women, and one commenter noted, in particular, that the downstream
impacts of repeat surgeries (increased disfigurement, anxiety,
infection risk, economic costs, time away from work and family) are
particularly impactful to working women, especially those of child-
bearing age and lower socio-economic status. In addition, a commenter
noted that breast tissue, unlike the liver or lungs, can be variably
thick or dense versus fatty depending on the age and genetics of the
patient, and that this makes the localization of abnormalities or
cancers in a breast difficult as each case can be different depending
on the amount of fat versus dense tissue and the patient's breast size.
These commenters believed that advances in technology are needed in
breast surgery to improve surgical results.
Several commenters described numerous drawbacks and difficulties
associated with wire localization techniques, including the following:
(1) some patients require up to 4 wires to ``bracket'' an abnormality
in the breast; (2) trauma and pain associated with having wires placed
and then extruding from a breast on the morning of surgery; (3)
scheduling difficulties associated with wire placement on the day of
surgery; (4) movement or displacement prior to or during surgery; (5)
wires can be cut or ``lost'' during the procedure, especially if the
cautery or bovie gets too close to them during the procedure; and (6)
wires are designed to have a small ``thicker'' portion placed at the
site of the tumor or abnormality; this small thick portion is difficult
to place accurately and if it migrates slightly can change the
orientation of the excision. In addressing difficulties in localizing
the wires, a commenter explained that surgeons attempt to localize the
tumor by ``following the wire,'' palpation, and educated guesses as to
where to resect tissue. Several commenters noted that these
difficulties in accurate tumor localization have resulted in high re-
excision rates. A commenter noted that over 15-20% of patients annually
require a second surgery to remove more breast tissue because the
localization was inexact at the time of the first surgery. A second
commenter stated that a recent meta-analysis showed an average 22% re-
excision rate for inadequate margins after primary lumpectomy. This
commenter asserted that the human and health care costs of this failure
rate are high and fall disproportionately on women. In addition, a
commenter reported that when using an alternative wire-free solution
with a radar detection marker, surgeons at his institution reported an
increase in re-excision rates, nearly doubling that of wires.
Commenters asserted that, as a result of difficulties and complications
with wire techniques, new technologies for localizing a breast and/or
lymph node abnormality requiring excision in the operating room are
needed.
Several commenters described clinical and surgical benefits of
using the Navigator and SmartClipTM based on experience
using this technology. Most of these commenters stated that using this
technology decreases positive surgical margin and re-excision rates. A
commenter noted that the system not only localizes the actual tumor
targeted for removal, but also shows the surgeon suggested margins.
That commenter added that with the Navigators and
SmartClipTM, the specimens are more circumferential and
consistent at a fixed (but surgeon selected) distance from the
implanted clip which has resulted in fewer positive margins, reducing
the need for a second surgery. Other commenters explained that the
technology allows the surgeon to track the position of the implanted
clip during surgery in 3D with real-time updates, allowing the surgeon
to have an objective view of the tip of the surgical instrument with
respect to the SmartClipTM, which according to commenters,
can result in decreases in both positive margin and re-excision rates.
In addition, a few commenters noted that the technology results in
removal of less normal breast tissue, with one commenter noting that
early data from major cancer centers is starting to show that less
normal tissue is being removed when the Elucent technology is used.
Commenters noted that this has major implications for post-surgical
pain, deformity, oncoplastic reconstructions, and complications. A
commenter asserted that it is unusual for a device to simultaneously
decrease deformity, pain and suffering, health care costs, and cancer
metrics like positive margin and re-excision rates.
Furthermore, a commenter noted that, in their anecdotal experience,
the use of the Navigators and SmartClipTM saves overall
operating room time compared to the hook-wire technique. This commenter
asserted that this decreases costs and anesthesia time and enables more
efficient use of operating rooms for other cases. Another commenter
reported that with the Navigators and SmartClipTM, there is
less need for synchronization with radiology for localization
procedures. This commenter asserted that in the past, the need to have
tumors localized in radiology before coming to the operating room
caused a number of problems such as displaced wires, operating room
delays, long patient waiting times with wires protruding from the
breast, and decreased efficiency.
Some commenters described additional technical and operational
advantages to using the Navigators and SmartClipTM. These
commenters noted that the Navigators and SmartClipTM are
unique because they allow the surgeons to track the position of the
SmartClipTM during surgery in 3D with real time updates. A
few commenters specifically noted that the SmartClipTM
contains an ASIC chip which is activated at surgery once the patient
lays on the operative table. A commenter further asserted that the
field of navigation is over 30cm and can enable identification in a
large or small breast or one that is wide or
[[Page 71906]]
narrow. This commenter claimed that the most important component of the
system is the NavSlim and NavPencil which enable navigation in real
time without using another device or probe. According to this
commenter, the NavSlim and Pencil are placed onto the operative tool or
cautery and do not have to be picked up intermittently.
Another commenter stated a significant technical advantage of the
technology is that a 3D readout is generated as a graphic
representation of the clip relative to the tip of the handpiece
(compared to an audio signal only) as a reflection of distance, which
per the commenter, is a more intuitive way to understand the device
localization. This commenter further stated that, perhaps most
important to a surgeon, the detector portion of the handpiece is fixed
to the cautery. According to this commenter, having the navigation
portion of the system within the operative field for real-time
detection significantly improves identification of the clip and the
lesion, even when working in a small space or in detection of a very
small target, as division or retraction of the tissue often causes the
target to move in surgery. This commenter noted that with real-time and
nearly continuous detection, loss or disorientation of the target is
minimized while performing the operation.
A few commenters described clinical outcome data from their
experience using the Navigators and SmartClipTM. A commenter
reported that he has decreased his re-excision rate from 16% in 2019
prior to the COVID pandemic to 5% in 2021. This commenter stated that
he performs an average of 200 breast conservation surgeries per year.
This commenter also added that the adoption of the Elucent technology
has resulted in fewer operative interventions for his patients
undergoing breast conservation, improved cosmesis with one surgery,
improved oncoplastic approaches as well as less anxiety and fewer
delays in oncologic care. A second commenter stated that in the five
months that they have implemented the technology, they have seen re-
excision rates drop to approximately 1.5%. Another commenter stated
that his institution is in the process of analyzing its clinical
outcomes data, which the commenter asserted illustrates the significant
clinical impact of implementing the SmartClipTM and
Navigator across six healthcare facilities and 235 surgical procedures.
Finally, a few commenters acknowledged the need for additional
research and larger clinical trials to support the preliminary positive
outcomes data, including the data indicating that the Navigators and
SmartClipTM decrease re-excision rates in breast
conservation surgery for patients with breast malignancy. These
commenters asserted that approval of pass-through payment for the
Navigators and SmartClipTM would enable greater access to
patients which will allow the surgical community to conduct additional
studies and collect more comprehensive and multi-center data to further
substantiate the clinical outcomes seen in early research studies.
Response: We appreciate the input provided by these commenters. We
have taken this information into consideration in making our final
determination of the substantial clinical improvement criterion,
discussed below.
Comment: The applicant submitted comments in response to many of
the concerns we expressed regarding the study abstract referenced in
the proposed rule, which assessed the impact of ESL using the EnVisio
Navigation System and SmartClipTM compared to wire
localization. In response to our concern that the study was
unpublished, the applicant stated that it submitted a manuscript for
peer-review and potential publication. In response to our concern that
this study appeared to be a feasibility study for a potentially larger
randomized controlled trial, the applicant stated that the study
authors did not make this statement and noted that prospective
randomized controlled trials are exceedingly rare in this space and not
considered necessary for adoption of a particular guidance technology.
The applicant further claimed that the study referenced in the abstract
has a rigorous cohort-matched design and a patient population size
which is far beyond a feasibility study. In response to our concern
about the lack of gender and age information, the applicant noted that
this was an IRB-approved matched cohort analysis (1:1) of 194 patients
(n=97 in both the study and control groups). The applicant further
stated that the age in the ESL group was 64 versus 61 in the WL group
(p=.015) (the applicant did not indicate whether these were average
ages, median ages, or otherwise). The applicant added that the matched
sample set included 190 females and four males. The applicant
reiterated that the study authors matched patients, one-to-one, based
on surgeon, procedure type with stratification for those having or not
having nodal procedures, and pathologic stage or benign pathology, and
restated the numerical results from the study abstract (which we
summarized in the CY 2023 OPPS/ASC proposed rule (87 FR 44593)).
In response to our concern that the differences in positive margin
and re-excision rates between the ESL and WL groups were not
statistically significant, the applicant asserted that the lack of
statistical significance for re-excisions was driven solely by the
sample size of the study. The applicant further noted that the
retrospective cohort-matched design prioritized patient matching over
sample size and the study was not prospectively powered for re-excision
rates as the authors had no a priori knowledge that this would be an
outcome of interest. The applicant claimed that, in hindsight,
reasonably achievable increases in sample size would have made
statistical conclusions possible. Specifically, the applicant claimed
that with a sample size of 150 (rather than 97) in each group, and
assuming identical re-excision rates, the difference between the ESL
and WL groups becomes statistically significant (p=0.049, Fisher's
exact test). The applicant further noted that ESL results were from the
initial cases performed with ESL at the study center and included a
learning curve, whereas the control wire localization cases were
performed at a time where the learning curve had been overcome and
surgeons had decades of experience with thousands of wire localization
cases. In addition, the applicant asserted that its system is being
used predominantly for the treatment of breast cancer, and that the
early results demonstrate lower positive margin rates and removal of
less normal tissue resulting in lower rates of re-excision by >50%.
The applicant also noted other clinical impacts of the Navigators
and SmartClipTM in supporting its claim of substantial
clinical improvement. The applicant claimed that the electromagnetic
navigation allows for more precise and accurate tissue localization,
resulting in 34.5% less normal functioning tissue being removed at the
time of surgery with ESL compared to WL. According to the applicant,
this results in less deformity and simpler oncoplastic reconstructions
and may decrease complications and post-procedure pain. The applicant
noted that the amount of excess (i.e., unnecessary) tissue removed was
statistically significant between the WL and ESL groups in the study
abstract it referenced, and that even with less tissue removed, the re-
excision rate decreased for the ESL group. According to the applicant,
the removal of less normal functioning non-neoplastic tissue during
surgery when using the Navigator compared to WL will cause
[[Page 71907]]
less tissue deformity, pain, and suffering and, in and of itself, is
evidence of substantial clinical improvement under Sec. 419.66(c)(2)--
specifically, that the removal of less normal functioning tissue
substantially improves the diagnosis or treatment of an illness or
injury or improves 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.
In response to our concern that the applicant had not provided
conclusive evidence that use of the Navigators reduces surgical site
infection rates, the applicant explained that this study was not
specifically powered to address surgical site infections, but stated
that when compared to wires, there are several surgical principles that
should contribute to lower SSI rates in adequately powered studies. The
applicant noted that the protrusion of the wire from the patient is an
infection risk because the wire is placed prior to surgery (often
hours) in a separate physical location from the operating room (often
radiology) and the patient is then transported to the operating room
with a semi-sterile dressing. The applicant added that the wire is a
further infection risk due to the added tissue trauma associated with
removal of larger volumes of tissue to minimize positive margins and
future additional procedures.
In response to our concern that the applicant had not provided
conclusive evidence that use of the Navigators reduces risk of tissue
marker migration, the applicant claimed that there is currently no
standard to determine tissue marker migration other than the
histopathological results. The applicant stated that migration of the
marker clip would result in an increase in positive margins and re-
excisions as well as an increase in the volume of tissue excised due to
uncertainty as to the exact position of the target, but that neither of
these findings was seen in the study. The applicant noted that the
lower re-excision rates and lower positive margins seen in the ESL
group are evidence of lack of tissue marker migration, in addition to
the smaller specimens and excess tissue excised.
Finally, the applicant asserted that breast cancer is the second
leading cause of cancer mortality in women, and that the current
standard localization technique (hook-wire) is both insufficient and
has not changed for many decades, despite high positive margin rates.
The applicant noted that in contrast to this, during this same time
period, larger investments in advanced technologies have been made to
decrease positive margin rates and increase quality of life in male-
predominant tumors such as prostate cancer. Thus, the applicant
asserted that technology-driven improvements in patient outcomes are
particularly important in breast cancer.
Response: We appreciate the applicant's responses to our questions
as well as the other comments we received about the Navigators.
However, we maintain the concerns we articulated in the proposed rule.
The provided published studies did not demonstrate a statistically
significant difference in positive margin and re-excision rates between
the ESL and WL technologies or provide evidence that
SmartClipTM reduces surgical site infection rates or risk of
tissue marker migration. Although the applicant noted that the amount
of excess tissue removed was statistically significant between the WL
and ESL groups in the study abstract it referenced, we do not agree
that this result, in and of itself, is evidence of substantial clinical
improvement under Sec. 419.66(c)(2)--that is, we do not believe that
this result, in itself, is evidence that the technology substantially
improves the diagnosis or treatment of an illness or injury or improves
the functioning of a malformed body part. We continue to believe that
additional information and evidence is necessary from larger, multi-
center published studies (including studies involving non-breast cancer
related procedures) that provide comparative outcomes between the
Navigators and existing technologies. Because of these concerns, we do
not believe that the Navigators represent a substantial clinical
improvement relative to currently existing technologies. After
consideration of the public comments we received, and our review of the
device pass through application, we are not approving the Navigators
for transitional pass-through payment status in CY 2023 because the
device does not meet the substantial clinical improvement criterion.
Because we have determined that the Navigators do not meet the
substantial clinical improvement criterion, we are not evaluating in
this final rule whether the device meets the cost criterion.
(3) SmartClipTM
Elucent Medical, Inc. submitted an application for a new device
category for transitional pass-through payment status for CY 2023 for
the SmartClipTM Soft Tissue Marker (SmartClipTM).
The applicant described the SmartClipTM as an
electromagnetically activated, single-use, sterile soft tissue marker
used for anatomical surgical guidance. According to the applicant, the
SmartClipTM is the only soft tissue marker that delivers
independent coordinates of location when used in conjunction with the
applicant's EnVisioTM Navigation System (which includes the
Navigators discussed previously in this final rule. Per the applicant,
at the time of surgical intervention, electromagnetic waves delivered
by the EnVisioTM Navigation System activate the implanted
SmartClipTM within a 50cm x 50cm x 35cm volume. The
applicant further explained that the SmartClipTM contains an
application-specific integrated circuit (ASIC), customized for use with
the EnVisioTM Navigation System, which is activated at a
specific frequency and communicates to the EnVisioTM
Navigation System the precise, real-time location of both the
SmartClipTM and the surgical margin, enabling the surgeon to
plan the specimen (tumor and margin) for excision.\43\ 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.
---------------------------------------------------------------------------
\43\ Based on the FDA 510(k) Summary for the
EnVisioTM Navigation System, the SmartClipTM
does not appear to be a component of the EnVisioTM
Navigation System; the SmartClipTM has a separate FDA
510(k) clearance as discussed later in this section.
---------------------------------------------------------------------------
The applicant stated that the SmartClipTM 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 SmartClipTM 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
SmartClipTM can be implanted into various types of soft
tissue, such as lung, gastrointestinal system, and breast, and can
subsequently be detected using the EnVisioTM 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 SmartClipsTM,
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 SmartClipTM enables the surgeon to choose the
safest, least
[[Page 71908]]
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 SmartClipTM
enables the surgeon to measure and record specimen size post excision.
The applicant further asserted that the SmartClipTM 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 SmartClipTM has characteristics that
differentiate it from conventional fiducial markers. First, the
applicant stated that the SmartClipTM location is expressed
relative to the patient's position--medial/lateral, inferior/superior,
anterior/posterior with 2mm precision. Second, according to the
applicant, the SmartClipTM 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 SmartClipTM 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 SmartClipTM is not subject to registration errors
often seen with navigation that utilizes pre-procedure imaging for
guidance. Furthermore, the applicant asserted that the
SmartClipTM is ideal for minimally invasive procedures in
that it does not require line of sight. The applicant also stated that
the SmartClipTM does not utilize any radioactive materials
or contain any ionizing radiation. Per the applicant, the
SmartClipTM does not require a separate imaging modality,
however, if another imaging modality is utilized, the
SmartClipTM is radiopaque. Finally, the applicant stated
that the SmartClipTM provides the following advantages
compared to current localization methods (including preoperative wire
localization): (1) no migration of the SmartClipTM; (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 SmartClipTM 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 SmartClipTM 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 SmartClipTM could not be
marketed until May 2019 because it is utilized in conjunction with the
EnVisioTM Navigation System and FDA clearance for the
EnVisioTM Navigation System was required prior to use of the
SmartClipTM (as mentioned previously, the applicant received
FDA clearance for the EnVisioTM Navigation System on March
22, 2019). We note that, according to the FDA 510(k) Summary and
Indications for Use for the SmartClipTM (K180640) and the
EnVisioTM Navigation System (K183400), the
SmartClipTM 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
EnVisioTM Navigation System enables the
SmartClipTM 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
SmartClipTM 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
EnVisioTM Navigation System. The applicant noted that while
the SmartClipTM 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 SmartClipTM ASIC fault, so as to ensure
patient care is not compromised. The applicant further stated that it
did not consider pursuing marketability of the SmartClipTM
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
EnVisioTM Navigation System (March 22, 2019) as the
applicable date for the SmartClipTM's initial marketability.
In the CY 2023 OPPS/ASC proposed rule, we solicited public comments on
whether the SmartClipTM meets the newness criterion.
Comment: The applicant asserted that the COVID-19 pandemic, which
started in the spring of 2020, and the subsequent halting of elective
surgeries, screening mammography, and company access to hospitals
substantially delayed the clinical implementation of the
SmartClipTM as well as the follow-on research necessary to
file a successful pass-through application. The applicant stated that,
in light of the COVID-19 global pandemic resulting in the suspension of
both research and elective surgical care, it believes the newness
criterion, which it stated is measured by available time on market, is
achieved.
Response: We appreciate the applicant's input. The applicant
submitted its application for consideration as a new device category
for transitional pass-through payment status for the
SmartClipTM on February 28, 2022, which is more than 3 years
from the date of the initial FDA marketing authorization (June 4,
2018). We do not agree that the COVID-19 pandemic created a basis for
claiming a verifiable delay in U.S. market availability of the
SmartClipTM. The applicant received 510(k) clearance from
FDA to market the SmartClipTM on February 4, 2018, which was
well before the beginning of the pandemic and thus we do not believe
the pandemic created a verifiable delay. In addition, in its
application, the applicant requested that we utilize the FDA clearance
date for the EnVisioTM Navigation System (March 22, 2019) as
the applicable date for the SmartClipTM's initial
marketability (which also was before the onset of the COVID-19
pandemic). In its application, the applicant asserted that it could not
market the SmartClipTM
[[Page 71909]]
until May 2019 because it is utilized in conjunction with the
EnVisioTM Navigation System and FDA clearance for the
EnVisioTM Navigation System was required prior to use of the
SmartClipTM. However, we note that, according to the FDA
510(k) Summary and Indications for Use for the SmartClipTM
(K180640) and the EnVisioTM Navigation System (K183400), the
SmartClipTM also can be located and surgically removed
through the use of imaging guidance such as x-ray, mammography,
ultrasound, and MRI. Thus, we do not believe the March 22, 2019, FDA
clearance date for the EnVisioTM Navigation System created a
verifiable delay in the market availability of the
SmartClipTM. Accordingly, we do not believe the applicant
has provided a basis for a verifiable delay in U.S. market
availability. Finally, in response to the applicant's assertion that
the newness criterion is measured by available time on the market, we
note that where there is a documented, verifiable delay in market
availability, under Sec. 419.66(b)(1), CMS assesses compliance with
the newness criterion by measuring amount of time from the date of
market availability, not available time on the market; that is, where
there is a verifiable delay, CMS will consider a pass-through
application if it is submitted within three years from the date of
market availability. After consideration of the public comments we
received, and our review of the device pass through application, we
have determined that the SmartClipTM does not meet the
newness criterion.
With respect to the eligibility criterion at Sec. 419.66(b)(3),
according to the applicant, the SmartClipTM 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 SmartClipTM 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). In the CY 2023 OPPS/ASC proposed rule, we
solicited public comments on whether the SmartClipTM meets
the eligibility criteria at Sec. 419.66(b).
Comment: The applicant asserted that the SmartClipTM
meets eligibility requirements of Sec. 419.66(b)(4) in that (1) it is
not a piece of equipment, an instrument, apparatus, implement, or item
for which depreciation and financing expenses are recovered as
depreciable assets (the applicant noted that the SmartClipTM
is a permanently implantable single use device), and (2) it is not a
material or supply furnished incident to a service (for example, a
suture, customized surgical kit, or clip, other than radiological site
marker). The applicant noted that the SmartClipTM is
utilized for real time three-dimensional surgical navigation. As such,
the applicant asserted that the SmartClipTM meets the
eligibility criteria at Sec. 419.66(b).
Response: Based on the information we have received and our review
of the application, we agree with the applicant that the
SmartClipTM is integral to the service provided, used for
one patient only, comes in contact with human tissue, and is surgically
implanted or inserted. In addition, we agree with the applicant that
the SmartClipTM meets the device eligibility requirements of
Sec. 419.66(b)(4) because it is not a piece of equipment, 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. Therefore, based on the public comments we have
received and our review of the application, we have determined that the
SmartClipTM meets the eligibility criteria at Sec.
419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that a device to be included in the
category is not appropriately described by any of the existing
categories or by any category previously in effect, and was not being
paid for as an outpatient service as of December 31, 1996. The
applicant stated that it was not aware of an existing pass-through
payment category that describes the SmartClipTM.
The applicant identified three devices or device categories that it
believes are most closely related to the SmartClipTM: (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 (SmartpillTM)).\44\
---------------------------------------------------------------------------
\44\ HCPCS code 91112 is not a current or previous pass-through
payment category. According to the applicant, the
SmartpillTM 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 SmartClipTM 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 noted in the CY 2023 OPPS/ASC proposed rule 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.\45\ 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.\46\ 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
SmartClipTM, 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)
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
SmartClipTM is an advanced interstitial implant that
substantially improves upon both generic gold fiducial markers and
common hook-wire localization systems. According to the applicant,
[[Page 71910]]
passive mechanical tissue markers such as gold fiducial markers and
hook-wire systems are related devices created for roughly the same
purpose as the SmartClipTM, but neither can be considered an
adequate comparator due to the highly advanced technology embedded in
the SmartClipTM. In contrast to both generic gold fiducial
markers and hook-wire systems, the applicant asserted that the
SmartClipTM contains an ASIC which is activated at a
specific frequency and provides location information regarding both the
SmartClipTM 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 SmartClipTM is described by HCPCS code A4648.
---------------------------------------------------------------------------
\45\ Medicare Claims Processing Manual, Ch. 4, section 60.4.2.
\46\ 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 solicited public comments on whether the SmartClipTM
meets the device category criterion.
Comment: A commenter stated that the SmartClipTM meets
the criterion at Sec. 419.66(c)(1) and can be differentiated from
other tissue markers. The commenter stated that the
SmartClipTM soft tissue marker has replaced the hook-wire,
and other non-directional, wire-free localization ``tissue markers''
across multiple sites at his institution since early March of 2022. The
commenter asserted that because the SmartClipTM offers the
uniqueness of integrated intelligence of precise location, he supported
the claim that the SmartClipTM is the first and only soft
tissue marker that provides the technical and clinical benefit of
knowing the exact location within a three-dimensional space. The
commenter added that the SmartClipTM is unique in that
radiologists can approach the placement of the marker in any direction
without any limitations on the depth, distance, or location of the
targeted tissue. The commenter also asserted that the enhanced
differentiation of the SmartClipTM's unique signature
further allows placement that benefits complete removal of the tissue
of concern. Per the commenter, the removal of complex lesions with the
distant disease has been an area of concern for which improved
localization markers have not been able to meet the clinical need. The
commenter reported that his practice has explored alternative
techniques and technologies, which increased re-excision rates,
resulting in patients having to repeat the various procedures for
localization and removal of additional tissue from the breast. The
commenter added that since implementing the SmartClipTM soft
tissue marker, his facilities have seen a significant reduction in the
need for patients to return for additional interventions.
Another commenter noted that in the proposed rule, the applicant
identified HCPCS code 91112 (Gastrointestinal transit and pressure
measurement, stomach through colon, wireless capsule, with
interpretation and report (SmartPill)) as one of the device categories
it believed was most closely related to the SmartClipTM and
indicated that the SmartClipTM is used in procedures
described by HCPCS code 91112. The commenter disagreed with the
applicant's statement that these procedures would be reported with the
SmartClipTM device. Per the commenter, the
SmartClipTM and SmartPill, an endoluminal capsule used in
the diagnosis of GI disorders, are not related devices used for similar
purposes. The commenter stated that while the SmartClipTM is
implanted in soft tissue and is used as a surgical marker, the
SmartPill capsule is ingested, captures information as it moves through
the GI tract, and passes naturally throughout the GI tract. According
to the commenter, the SmartPill is intended to measure pH, pressure,
and temperature throughout the GI tract, along with four different GI
transit times. The commenter asserted that because the
SmartClipTM and SmartPill, are not functionally related
devices and have vastly different indications for use, it is unlikely
that a surgical procedure to place a fiducial marker in soft tissue
using the SmartClipTM device would be reported with the
diagnostic procedure limited to the GI tract and described by CPT code
91112. The commenter requested that CMS remove reference to SmartPill
from considerations related to the SmartClipTM pass-through
application.
Response: We appreciate the information provided by the commenters
and have taken this into consideration in making our final
determination below regarding the criterion at Sec. 419.66(c)(1).
Comment: The applicant stated that it does not believe the
SmartClipTM is described by HCPCS code A4648 and explained
that it can be differentiated from the passive tissue markers
identified within HCPCS code A4648. According to the applicant, inert
metal biopsy markers, gold fiducial markers, magnetic seeds,
radioactive seeds, and hook-wires are used in conjunction with some
form of detector to provide a localizable marker at the known site of
disease. The applicant stated that these types of markers provide a
visual location under imaging or are locatable with various types of
detectors and are palpable at the time of surgery. The applicant added
that, like the inert metal markers, the radioactive and magnetic
markers are also passive, but can be located in the presence of a
magnetic or radioactive detector. Per the applicant, the markers do not
contain any computing capability within the marker itself, and thus no
3D data can be communicated. The applicant asserted that the
SmartClipTM soft tissue marker is unique in that it is
designed to contain an ASIC. According to the applicant, this circuit
is passive until it is in the presence of a specific radiofrequency at
which time the SmartClipTM actively communicates with the
Navigator to relay 3D coordinates to the surgeon at a rate of 16x per
second. The applicant stated that the three different models (i.e.,
colors) of the SmartClipTM operate at slightly different
frequencies so that they can be uniquely identified, individually
located, and color coded for presentation to the surgeon.
Response: We appreciate the commenters' input. For the reasons
specified by the commenters, we agree that the SmartClipTM
can be differentiated from the passive tissue markers identified within
HCPCS code A4648. We agree that passive mechanical tissue markers such
as gold fiducial markers and hook-wire systems are related devices
created for roughly the same purpose as the SmartClipTM, but
that neither can be considered an adequate comparator due to the highly
advanced technology (ASIC) embedded in the SmartClipTM which
can be activated at a specific radiofrequency and communicate 3D
coordinates to the surgeon in real time.
In addition, we agree with the commenter who noted that the
SmartClipTM and SmartPill are not functionally related
devices and have vastly different indications for use. We further agree
that it is unlikely that a surgical procedure to place a fiducial
marker in soft tissue using the SmartClipTM device would be
reported with the diagnostic procedure limited to the GI tract and
described by CPT code 91112.
After consideration of the public comments we received, we believe
that there is not a current or previously
[[Page 71911]]
existing pass-through payment category that describes the
SmartClipTM, and therefore, the SmartClipTM meets
the device category eligibility criterion at Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of 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 SmartClipTM
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 SmartClipTM
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 EnVisioTM
Navigation System and SmartClipTM compared to wire
localization (WL) on operative times, specimen volumes, margin
positivity, and margin re-excision rates.\47\ 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 55cm3 with WL versus 36cm3 with ESL
(p=0.0012). In those with measurable tumor volume, excess tissue
excised was larger with WL compared to ESL (median=73.2cm3 versus
52.5cm3, 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.
---------------------------------------------------------------------------
\47\ 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.\48\ The paper presented three cases from the
Moffitt Cancer Center, including radiographic and other images,
employing three different methods of breast mass localization: (1)
SmartClipTM, (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 SmartClipTM
localizers, SAVI SCOUT[supreg] localizers, and wire localizers.
---------------------------------------------------------------------------
\48\ 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.\49\
---------------------------------------------------------------------------
\49\ 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
SmartClipTM. The authors noted that the
SmartClipTM is the first device to provide three-plane
localization information. The authors stated that a monitor displays
the approximate position of the SmartClipTM allowing
everyone in the operating room to assist with the
[[Page 71912]]
localization of the SmartClipTM and provide knowledge of its
location prior to and throughout the surgery. They further noted that
the SmartClipTM localizer can be visualized on a small
screen mounted on the electrocautery tool which, like the monitor,
depicts the direction and depth to the SmartClipTM.
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 SmartClipTM 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
SmartClipTM, 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 SmartClipTM in clinical
practice.
In addition, the applicant provided three physician case reports
(two by surgeons and one by radiologists), each describing the use of
the SmartClipTM 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 SmartClipTM or
EnVisioTM Navigation System. In the first surgical case
report,\50\ the surgeon noted that the foot pedal activation of the
EnVisioTM Navigation System allowed toggling between two
SmartClipTM 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,\51\ the surgeon similarly
noted that the EnVisioTM Navigation System helped her to map
out and be more precise in her incision location and lumpectomy
dissection. Finally, in the radiologists' case report,\52\ ultrasound
guided SmartClipTM localization was ordered for definitive
surgical management. The radiologists noted the visibility of the
SmartClipTM relative to the coil clip, mass, and surrounding
tissue, as well as the ease of the deployment.
---------------------------------------------------------------------------
\50\ Kruper, Laura, Bracketing Lobulated Breast Lesion with the
EnVisioTM Navigation System using Differentiated
SmartClipTM.
\51\ Henkel, Dana, Single SmartClipTM Case.
\52\ Lee, Marie C., Mooney, Blaise, Right Breast IDC/DCIS.
---------------------------------------------------------------------------
The applicant also submitted several articles in general support of
its application, which we summarized in the CY 2023 OPPS/ASC proposed
rule 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.\53\ 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.\54\ 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.\55\ 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.\56\ 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.\57\ 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.\58\ 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.\59\
---------------------------------------------------------------------------
\53\ 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.
\54\ 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.
\55\ 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.
\56\ 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.
\57\ 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.
\58\ 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.
\59\ 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 noted the
following concerns in the CY 2023 OPPS/ASC proposed rule. We noted that
the first study appeared to be unpublished, and it was not clear
whether it had been submitted for publication in a peer-reviewed
journal. In addition, we stated that the study involved a sample of 97
patients from one institution and appeared 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, we indicated that the authors did
not report the sex or age of the study participants. Additionally, the
authors reported that
[[Page 71913]]
the differences in positive margin and re-excision rates between ESL
and WL groups were not statistically significant. We also noted a
potential concern regarding practice/selection effects bias inherent in
the methodology presented.
In addition, we noted that the second article was an undated,\60\
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. We explained that
the paper did not systematically compare the techniques across any
measurable variables, and the authors indicated that a clinical study
was underway at the institution to evaluate the SmartClipTM
in clinical practice. Similarly, we noted that the physician case
reports were solely descriptive in nature--they presented each
physician's anecdotal experience using the EnVisioTM
Navigation System and/or SmartClipTM. Furthermore, we noted
that the applicant provided several additional articles that, while
informative, did not involve the SmartClipTM and did not
appear to directly support the applicant's claim of substantial
clinical improvement. We stated that we would welcome additional
information and evidence from larger, multi-center studies that provide
comparative outcomes between the SmartClipTM and existing
technologies.
---------------------------------------------------------------------------
\60\ Although the applicant reported the date of the study as
January 2021, the copy of the study provided by the applicant was
not dated.
---------------------------------------------------------------------------
In the CY 2023 OPPS/ASC proposed rule, we further stated that none
of the articles and case reports provided conclusive evidence that the
use of the SmartClipTM reduces surgical site infection rates
or the risk of tissue marker migration, as claimed by the applicant. In
addition, we indicated that 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
SmartClipTM is utilized frequently in breast conserving
surgery, lymph nodes, and head/neck cancers. We stated in the proposed
rule that we would welcome additional evidence of substantial clinical
improvement in cases related to non-breast cancer related procedures.
We solicited public comments on whether the SmartClipTM
meets the substantial clinical improvement criterion.
Comment: All commenters addressing the SCI criterion offered
support for approval of the SmartClipTM application. Some
commenters, including the applicant, noted that for many years, the
standard of care for breast conservation surgery has been wire
localization and that little progress has been made. Such commenters
noted that compared to the investments and advances that have been made
in surgical technologies for other types of cancer (including male-
predominant cancers such as prostate cancer) to reduce positive margin
rates and increase quality of life, the tools for breast cancer surgery
have remained limited. According to commenters, advances in surgical
technologies for other types of cancer have included minimally invasive
approaches inclusive of laparoscopic as well as robotic surgery, image-
fusion, and advanced navigation. Such commenters considered the under-
resourcing of breast surgery to be an equity issue due to the fact that
breast surgery is primarily performed on women, and one commenter
noted, in particular, that the downstream impacts of repeat surgeries
(increased disfigurement, anxiety, infection risk, economic costs, time
away from work and family) are particularly impactful to working women,
especially those of child-bearing age and lower socio-economic status.
In addition, a commenter noted that breast tissue, unlike the liver or
lungs, can be variably thick or dense versus fatty depending on the age
and genetics of the patient, and that this makes the localization of
abnormalities or cancers in a breast difficult as each case can be
different depending on the amount of fat versus dense tissue and the
patient's breast size. These commenters believed that advances in
technology are needed in breast surgery to improve surgical results.
Several commenters described numerous drawbacks and difficulties
associated with wire localization techniques, including the following:
(1) some patients require up to 4 wires to ``bracket'' an abnormality
in the breast; (2) trauma and pain associated with having wires placed
and then extruding from a breast on the morning of surgery; (3)
scheduling difficulties associated with wire placement on the day of
surgery; (4) movement or displacement prior to or during surgery; (5)
wires can be cut or ``lost'' during the procedure, especially if the
cautery or bovie gets too close to them during the procedure; and (6)
wires are designed to have a small ``thicker'' portion placed at the
site of the tumor or abnormality; this small thick portion is difficult
to place accurately and if it migrates slightly can change the
orientation of the excision. In addressing difficulties in localizing
the wires, a commenter explained that surgeons attempt to localize the
tumor by ``following the wire,'' palpation, and educated guesses as to
where to resect tissue. Several commenters noted that these
difficulties in accurate tumor localization have resulted in high re-
excision rates. A commenter noted that over 15-20% of patients annually
require a second surgery to remove more breast tissue because the
localization was inexact at the time of the first surgery. A second
commenter stated that a recent meta-analysis showed an average 22% re-
excision rate for inadequate margins after primary lumpectomy. This
commenter asserted that the human and health care costs of this failure
rate are high and fall disproportionately on women. In addition, a
commenter reported that when using an alternative wire-free solution
with a radar detection marker, surgeons at his institution reported an
increase in re-excision rates, nearly doubling that of wires.
Commenters asserted that, as a result of difficulties and complications
with wire techniques, new technologies for localizing a breast and/or
lymph node abnormality requiring excision in the operating room are
needed.
Several commenters described clinical and surgical benefits of
using the Navigator and SmartClipTM based on experience
using this technology. Most of these commenters stated that using this
technology decreases positive surgical margin and re-excision rates. A
commenter noted that the system not only localizes the actual tumor
targeted for removal, but also shows the surgeon suggested margins.
That commenter added that with the Navigators and
SmartClipTM, the specimens are more circumferential and
consistent at a fixed (but surgeon selected) distance from the
implanted clip which has resulted in fewer positive margins, reducing
the need for a second surgery. Other commenters explained that the
technology allows the surgeon to track the position of the implanted
clip during surgery in 3D with real-time updates, allowing the surgeon
to have an objective view of the tip of the surgical instrument with
respect to the SmartClipTM, which according to commenters,
can result in decreases in both positive margin and re-excision rates.
In addition, a few commenters noted that the technology results in
removal of less normal breast tissue, with one commenter noting that
early data from major cancer centers is starting to show that less
normal tissue is being removed when the Elucent technology is used.
[[Page 71914]]
Commenters noted that this has major implications for post-surgical
pain, deformity, onco-plastic reconstructions, and complications. A
commenter asserted that it is unusual for a device to simultaneously
decrease deformity, pain and suffering, health care costs, and cancer
metrics like positive margin and re-excision rates.
Furthermore, a commenter noted that, in their anecdotal experience,
the use of the Navigators and SmartClipTM saves overall
operating room time compared to the hook-wire technique. This commenter
asserted that this decreases costs and anesthesia time and provides the
ability to more efficiently use operating rooms for other cases.
Another commenter reported that with the Navigators and
SmartClipTM, there is less need for synchronization with
radiology for localization procedures. This commenter asserted that in
the past, the need to have tumors localized in radiology before coming
to the operating room caused a number of problems such as displaced
wires, operating room delays, long patient waiting times with wires
protruding from the breast, and decreased efficiency. This commenter
and another noted that the SmartClipTM can be implanted at
virtually any time prior to the surgery at the patient's convenience,
thus avoiding delay or wire displacement on the day of surgery.
Some commenters described additional technical and operational
advantages to using the Navigators and SmartClipTM. These
commenters noted that the Navigators and SmartClipTM are
unique because they allow the surgeons to track the position of the
SmartClipTM during surgery in 3D with real time updates. A
few commenters specifically noted that the SmartClipTM
contains an ASIC chip which is activated at surgery once the patient
lays on the operative table. A commenter further asserted that the
field of navigation is over 30cm and can enable identification in a
large or small breast or one that is wide or narrow. This commenter
claimed that the most important component of the system is the NavSlim
and NavPencil which enable navigation in real time without using
another device or probe. According to this commenter, the NavSlim and
Pencil are placed onto the operative tool or cautery and do not have to
be picked up intermittently.
Another commenter stated a significant technical advantage of the
technology is that a 3D readout is generated as a graphic
representation of the clip relative to the tip of the handpiece
(compared to an audio signal only) as a reflection of distance, which
per the commenter, is a more intuitive way to understand the device
localization. This commenter further stated that, perhaps most
important to a surgeon, the detector portion of the handpiece is fixed
to the cautery. According to this commenter, having the navigation
portion of the system within the operative field for real-time
detection significantly improves identification of the clip and the
lesion, even when working in a small space or in detection of a very
small target, as division or retraction of the tissue often causes the
target to move in surgery. This commenter noted that with real-time and
nearly continuous detection, loss or disorientation of the target is
minimized while performing the operation.
Furthermore, a commenter provided comments based on his personal
experiences placing the SmartClipTM and direct observation
of his colleagues' use of SmartClipTM. The commenter first
noted that all non-wire/non-radioactive localization methods have some
common benefits to patients, in that they allow for flexibility with
scheduling, are generally less painful than wires, have less chance of
dislodgment/migration after placement, can be used to localize targets
in the axilla and non-palpable targets which are too superficial or too
deep for a wire, and when operating room cases are unexpectedly
cancelled or delayed, no harm comes to patients. The commenter asserted
that the SmartClipTM has several unique benefits, observed
at his institution, that demonstrate that it meets the criterion at
Sec. 419.66(c)(2). First, the commenter stated that the utilization of
the SmartClipTM provides the ability to localize targets
deep in the breast and deep in the axilla, beneath overlying dense
tissue such as muscle. The commenter noted that the 35cm detection
depth available with the SmartClipTM soft tissue marker
exceeds that of other types of markers such as the SaviScout, which the
commenter stated are often not detectable when the target is deeper
than 4 cm of normal breast tissue or beneath dense tissue, such as
muscle encountered in axilla. The commenter stated that this causes the
surgeon to have to ``cut down'' through tissue until the clip is
detected, resulting in a less optimal approach, longer operating room
time, and potential damage to the clip with electrocautery devices.
According to this commenter, a second important benefit the
SmartClipTM provides is the ability to localize targets
surrounded by blood products/hematomas. Per the commenter, the ASIC
computer chip within the SmartClipTM is not affected by
surrounding human tissue, including hematomas. The commenter stated
that in contrast, other tissue markers are often not detectable if a
hematoma is present. The commenter noted that if a hematoma limits the
signal and detection of a localizing clip, the result is delay in
surgery or a prolonged, less accurate surgical excision and need for
radiology staff to come to the operating room to assist the surgeon
localizing the target using ultrasound technology/fluoroscopy.
Third, the commenter stated that in his experience, the
SmartClipTM provides more specific bracketing ability with 3
differentiated clip signatures, due to the ASIC computer chip that
delivers precise coordinates of the individual SmartClipTM
signals and their locations. According to the commenter, this has
resulted in smaller, more accurate surgical specimens.
Fourth, the commenter noted that if there is migration of a
localizing clip, a second clip must be placed, and asserted that
because the SmartClipTM has 3 unique signals, this
complication is easily remedied. Per the commenter, other clips which
lack unique signals must be placed far enough from the migrated clip,
resulting in time consuming imaging and communication to ensure the
proper area is surgically excised, as well as more time, more
radiation, and more tissue being removed as surgeons must make larger
incisions.
In addition, the commenter noted that when a patient undergoes
neoadjuvant chemotherapy, the cancer must be localized before
chemotherapy treatment to ensure the correct area is removed, and that
response to treatment is often measured with MRI. Per the applicant,
the SmartClipTM has less MRI artifact than other clips,
which allows for accurate assessment of response to therapy. The
commenter also stated that the SmartClipTM is highly visible
clip with ultrasound. The commenter asserted that the ultrasound
visibility makes placement easy for radiologists, as the
SmartClipTM looks significantly larger and brighter than the
biopsy clips which are already in the target tissue being localized.
Additionally, the commenter stated that in the unexpected event that
the SmartClipTM must be localized with ultrasound
intraoperatively, the highly visible nature of the
SmartClipTM makes this easier when compared to searching for
other clips which are less echogenic.
This commenter also described some technical advantages of the
SmartClipTM. First, the commenter stated that the
SmartClipTM is easy to deploy. The commenter specifically
[[Page 71915]]
noted that the needle is available in different lengths, specifically
noting the second-generation needle called ``SmartClipTM
Lite.'' The commenter stated that the bevel of this needle is longer
than other needles, which makes cutting through dense tissue easier.
The commenter added that the bevel is also etched and highly echogenic,
and that when the bevel is pointed ``up'' towards the ultrasound probe,
the SmartClipTM is very easy to see. The commenter explained
that this allows the radiologist and ultrasound technologist to readily
distinguish between structures in the breast, existing biopsy clips,
and the tip of the deployment needle. Additionally, the commenter
asserted that the thumb button and forward movement is intuitive and
familiar to breast radiologists and can all be done with one hand (no
need to put the ultrasound probe down to ``unlock'' the deployment
needle). The commenter also stated that the needle is lightweight, but
extremely sharp, and that the shape of the SmartClipTM makes
ultrasound deployment easy. In addition, per the commenter, the clip is
smooth with no external antennas or protrusions to get caught in tissue
or bend in dense tissue. The commenter stated that, to date, they have
not bent any needles or had any needles self-deploy. However, the
commenter acknowledged that they have had two unsuccessful deployments
due to an issue which has since been rectified, but the commenter
stated that each of these situations was solved simply with the
deployment of a second SmartClipTM without patient harm or
delayed treatment. The commenter stated that the applicant has
communicated an improved quality control process to prevent future
incidents going forward.
A few other commenters described clinical outcome data from their
experience with the Navigators and SmartClipTM. A commenter
reported that he has decreased his re-excision rate from 16% in 2019
prior to the COVID pandemic to 5% in 2021. This commenter stated that
he performs an average of 200 breast conservation surgeries per year.
This commenter also added that the adoption of the Elucent technology
has resulted in fewer operative interventions for his patients
undergoing breast conservation, improved cosmesis with one surgery,
improved oncoplastic approaches as well as less anxiety and fewer
delays in oncologic care. A second commenter stated that in the five
months that they have implemented the technology, they have seen re-
excision rates drop to approximately 1.5%. Another commenter stated
that his institution is in the process of analyzing its clinical
outcomes data, which the commenter asserted illustrate the significant
clinical impact of implementing the SmartClipTM and
Navigator across six healthcare facilities and 235 surgical procedures.
Finally, a few commenters acknowledged the need for additional
research and larger clinical trials to support the preliminary positive
outcomes data, including the data indicating that the Navigators and
SmartClipTM decrease re-excision rates in breast
conservation surgery for patients with breast malignancy. These
commenters asserted that approval of pass-through payment for the
Navigators and SmartClipTM would enable greater access to
patients which will allow the surgical community to conduct additional
studies and collect more comprehensive and multi-center data to further
substantiate the clinical outcomes seen in early research studies.
Response: We appreciate the input provided by these commenters. We
have taken this information into consideration in making our final
determination of the substantial clinical improvement criterion,
discussed below.
Comment: The applicant submitted comments in response to many of
the concerns we expressed regarding the study abstract referenced in
the proposed rule, which assessed the impact of ESL using the EnVisio
Navigation System and SmartClipTM compared to wire
localization. In response to our concern that the study was
unpublished, the applicant stated that it submitted a manuscript for
peer-review and potential publication. In response to our concern that
this study appeared to be a feasibility study for a potentially larger
randomized controlled trial, the applicant stated that the study
authors did not make this statement and noted that prospective
randomized controlled trials are exceedingly rare in this space and not
considered necessary for adoption of a particular guidance technology.
The applicant further claimed that the study referenced in the abstract
has a rigorous cohort-matched design and a patient population size
which is far beyond a feasibility study. In response to our concern
about the lack of gender and age information, the applicant noted that
this was an IRB-approved matched cohort analysis (1:1) of 194 patients
(n=97 in both the study and control groups). The applicant further
stated that the age in the ESL group was 64 versus 61 in the WL group
(p=.015) (the applicant did not indicate whether these were average
ages, median ages, or otherwise). The applicant added that the matched
sample set included 190 females and four males. The applicant
reiterated that the study authors matched patients, one-to-one, based
on surgeon, procedure type with stratification for those having or not
having nodal procedures, and pathologic stage or benign pathology, and
restated the numerical results from the study abstract (which we
summarized in the CY 2023 OPPS/ASC proposed rule (87 FR 44593)).
In response to our concern that the differences in positive margin
and re-excision rates between the ESL and WL groups were not
statistically significant, the applicant asserted that the lack of
statistical significance for re-excisions was driven solely by the
sample size of the study. The applicant further noted that the
retrospective cohort-matched design prioritized patient matching over
sample size and the study was not prospectively powered for re-excision
rates as the authors had no a priori knowledge that this would be an
outcome of interest. The applicant claimed that, in hindsight,
reasonably achievable increases in sample size would have made
statistical conclusions possible. Specifically, the applicant claimed
that with a sample size of 150 (rather than 97) in each group, and
assuming identical re-excision rates, the difference between the ESL
and WL groups becomes statistically significant (p=0.049, Fisher's
exact test). The applicant further noted that ESL results were from the
initial cases performed with ESL at the study center and included a
learning curve, whereas the control wire localization cases were
performed at a time where the learning curve had been overcome and
surgeons had decades of experience with thousands of wire localization
cases. In addition, the applicant asserted that the Elucent system is
being used predominantly for treatment of breast cancer, and that the
early results demonstrate lower positive margin rates and removal of
less normal tissue resulting in lower rates of re-excision by >50%.
The applicant also noted other clinical impacts of the Navigators
and SmartClipTM in supporting its claim of substantial
clinical improvement. The applicant claimed that the electromagnetic
navigation allows for more precise and accurate tissue localization,
resulting in 34.5% less normal functioning tissue being removed at the
time of surgery with ESL compared to WL. According to the applicant,
this results in less deformity and simpler oncoplastic reconstructions
and may decrease complications and
[[Page 71916]]
post-procedure pain. The applicant noted that the amount of excess
(i.e., unnecessary) tissue removed was statistically significant
between the WL and ESL groups in the study abstract it referenced, and
that even with less tissue removed, the re-excision rate decreased for
the ESL group. According to the applicant, the removal of less normal
functioning non-neoplastic tissue during surgery when using the
Navigator compared to WL will cause less tissue deformity, pain, and
suffering and, in and of itself, is evidence of substantial clinical
improvement under Sec. 419.66(c)(2)--specifically, that the removal of
less normal functioning tissue substantially improves the diagnosis or
treatment of an illness or injury or improves 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.
In response to our concern that the applicant had not provided
conclusive evidence that use of the SmartClipTM reduces
surgical site infection rates, the applicant explained that this study
was not specifically powered to address surgical site infections, but
stated that when compared to wires, there are several surgical
principles that should contribute to lower SSI rates in adequately
powered studies. The applicant noted that the protrusion of the wire
from the patient is an infection risk because the wire is placed prior
to surgery (often hours) in a separate physical location from the
operating room (often radiology) and the patient is then transported to
the operating room with a semi-sterile dressing. The applicant added
that the wire is a further infection risk due to the added tissue
trauma associated with removal of larger volumes of tissue to minimize
positive margins and future additional procedures.
In response to our concern that the applicant had not provided
conclusive evidence that use of the SmartClipTM reduces risk
of tissue marker migration, the applicant claimed that there is
currently no standard to determine tissue marker migration other than
the histopathological results. The applicant stated that migration of
the marker clip would result in an increase in positive margins and re-
excisions as well as an increase in the volume of tissue excised due to
uncertainty as to the exact position of the target, but that neither of
these findings was seen in the study. The applicant noted that the
lower re-excision rates and lower positive margins seen in the ESL
group are evidence of lack of tissue marker migration, in addition to
the smaller specimens and excess tissue excised.
Finally, the applicant asserted that breast cancer is the second
leading cause of cancer mortality in women, and that the current
standard localization technique (hook-wire) is both insufficient and
has not changed for many decades, despite high positive margin rates.
The applicant noted that in contrast to this, during this same time
period, larger investments in advanced technologies have been made to
decrease positive margin rates and increase quality of life in male-
predominant tumors such as prostate cancer. Thus, the applicant
asserted that technology-driven improvements in patient outcomes are
particularly important in breast cancer.
Response: We appreciate the applicant's responses to our questions
as well as the other comments we received about the
SmartClipTM. However, we maintain the concerns we
articulated in the proposed rule. The provided published studies did
not demonstrate a statistically significant difference in positive
margin and re-excision rates between the ESL and WL technologies or
provide evidence that SmartClipTM reduces surgical site
infection rates or risk of tissue marker migration. Although the
applicant noted that the amount of excess tissue removed was
statistically significant between the WL and ESL groups in the study
abstract it referenced, we do not agree that this result, in and of
itself, is evidence of substantial clinical improvement under Sec.
419.66(c)(2)--that is, we do not believe that this result, in itself,
is evidence that the technology substantially improves the diagnosis or
treatment of an illness or injury or improves the functioning of a
malformed body part. We continue to believe that additional information
and evidence is necessary from larger, multi-center published studies
(including studies involving non-breast cancer related procedures) that
provide comparative outcomes between the SmartClipTM and
existing technologies. Because of these concerns, we do not believe
that the SmartClipTM represents a substantial clinical
improvement relative to currently existing technologies. After
consideration of the public comments we received, and our review of the
device pass-through application, we are not approving the
SmartClipTM for transitional pass-through payment status in
CY 2023 because the device does not meet the newness or substantial
clinical improvement criterion.
We note that we received comments from the applicant with regard to
the cost criteria for this device, but because we have determined that
the device does not meet the newness or substantial clinical
improvement criteria, and therefore, is not eligible for approval for
transitional pass-through payment status for CY 2023, we are not
summarizing comments received or making a determination on those
criteria in this final rule.
(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
[[Page 71917]]
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.
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 invited public comment on whether the Evoke[supreg]
SCS System meets the newness criterion.
Comment: The applicant reasserted that the Evoke[supreg] SCS System
meets the newness criterion at Sec. 419.66(b)(1) as the application
was submitted within 3 years of FDA approval.
Response: We appreciate the commenter's input and agree that
because we received the application for the Evoke[supreg] SCS System on
March 1, 2022, which was within 3 years of the FDA premarketing
approval on February 28, 2022, 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 noted 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 noted 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 invited public comment on
whether the Evoke[supreg] SCS System meets the eligibility criteria at
Sec. 419.66(b).
Comment: The applicant stated the generator and charger components
of the Evoke[supreg] SCS System meet the eligibility criteria at Sec.
419.66(b)(3) and (4), as the new device category would only apply to
these two components. The applicant stated that the Evoke generator is
an integral part of the implant procedure of spinal neurostimulator
pulse generator (CPT code 63685). The applicant explained that the
charger is a rechargeable battery embedded in the implantable device,
and all that apply to the implant also apply to the charger. The
applicant stated that the generator and charger components meet the
criterion at Sec. 419.66(b)(3) since they are used for one patient
only, come in contact with human tissue, and are surgically inserted.
The applicant stated that the generator and charger components meet the
criterion at Sec. 419.66(b)(4) since they are not the type of item for
which depreciation and financing expenses are recovered or they are
materials or supplies furnished incident to a service.
Response: Based on the information we have received and our review
of the application, we agree with the applicant that the applicable
components of the device are used for one patient only, come in contact
with human tissue, and are surgically implanted or inserted. We also
agree with the applicant that the applicable components meet the device
eligibility requirements of Sec. 419.66(b)(4) because they are not
equipment, an instrument, apparatus, implement, or item for which
depreciation and financing expenses are recovered, and they are not a
supply or material furnished incident to a service. Based on this
assessment we have determined that the Evoke[supreg] SCS System meets
the eligibility criteria at Sec. 419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at
[[Page 71918]]
Sec. 419.66(c). The first criteria 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
55 below) and explained why each category does not describe the Evoke
SCS System. In summary, the applicant asserted that the existing codes
do not adequately describe the Evoke 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 SCS System is a rechargeable, closed-loop neurostimulator that
provides stimulation to spinal nerves. Upon review, it did not appear
that there are any existing pass-through payment categories that might
apply to the Evoke[supreg] SCS System. We invited public comment on
whether Evoke[supreg] SCS System meets the device category criterion.
Comment: The applicant and many other commenters agreed with CMS's
assessment that there are no existing pass-through payment categories
that describe the Evoke[supreg] SCS System.
A competitor asserted that the Evoke[supreg] SCS System is
described by an existing category. The commenter stated that, in
considering existing codes, CMS noted that Evoke is not described by
``C1820--Generator, neurostimulator (implantable), with rechargeable
battery and charging system'' or by ``C1822--Generator, neurostimulator
(implantable), high frequency, with rechargeable battery and charging
system'' because neither code describes a closed-loop neurostimulator.
However, the commenter noted that CMS acknowledges in the proposed rule
that Saluda Medical, Inc., the manufacturer of Evoke ``indicated that
this stimulator delivers both open-loop and closed-loop stimulation
modes.'' The commenter stated that the aforementioned codes are not
explicitly for open-loop neurostimulators and have long been used for
technology similar to close-loop stimulation such as Medtronic's
AdaptiveStimTM. The commenter stated that
AdaptiveStimTM, first commercially introduced by Medtronic
in 2011, is also a closed-loop SCS device which incorporates an
internal accelerometer in the generator to monitor patient movements
and postural fluctuations and adjusts device settings such as output
amplitude, thus closing the loop. The commenter stated that, while both
the accelerometer technology and ECAP sensing technology purport to
provide the same benefit, i.e., reduced uncomfortable paresthesias,
there are no comparative clinical trials to determine if one technology
is superior to the other. The commenter stated that, even if CMS
asserts that codes C1820 and C1822 are only for open-loop
neurostimulators as suggested in the proposed rule, the codes still
apply to Evoke because the product--according to the manufacturer--also
delivers open-loop stimulation mode. The commenter also stated that as
the Evoke system can deliver both open-loop and closed-loop stimulation
modes, there is nothing to prevent implanting the system and
programming initially as a closed-loop system, and post implantation
and billing, adjust the system to an-open looped system. The commenter
explained that the existing closed-loop AdaptiveStimTM
system has been accurately described since its commercial introduction
by C1820 and therefore, Evoke entirely meets the description of the
existing code, C1820, and thus would not satisfy the newness criteria
Sec. 419.66(c)(1) for transitional pass-through payment status.
Response: We appreciate the commenters' input. It is our
understanding that a closed-loop system measures and uses the system's
output to adjust subsequent output. Because the Evoke[supreg] SCS
System measures and uses the evoked compound action potentials to
instantaneously adjust subsequent stimulation output on every
stimulation pulse, we believe it is uniquely a true closed-loop system.
After consideration of the public comments we received, we continue to
believe that there is not an existing pass-through payment category
that describes the Evoke[supreg] SCS System, and therefore, the
Evoke[supreg] SCS System meets the device category eligibility
criterion at Sec. 419.66(c)(1).
BILLING CODE 4120-01-P
[[Page 71919]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.071
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
[[Page 71920]]
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-
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.\61\ 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.
Noninferiority (d=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.
---------------------------------------------------------------------------
\61\ 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.\62\ 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.\63\ 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.\64\ 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).
---------------------------------------------------------------------------
\62\ 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.
\63\ 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.
\64\ 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=0.0052) and at 12 months (83.1 percent vs 61.0 percent;
difference 22.0 percent; p=0.0060). Non-inferiority was met at 3 months
(p<0.0001) and 12 months
[[Page 71921]]
(p<0.0001), as was superiority (3 months, p=0[middot]0052; 12 months,
p=0.0060).
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, 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).\65\ 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).
---------------------------------------------------------------------------
\65\ 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 patients [19 percent] [95 percent CI 10.8-30.9], and 11 adverse
events in the open-loop group in 11 patients [16 percent] [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.\66\ 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).
---------------------------------------------------------------------------
\66\ 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.\67\ 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
[[Page 71922]]
2015 to April 2017 for the Avalon study.\68\ 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).
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\67\ 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]
\68\ 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.\69\ 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
patients were high responders (>=80 percent pain reduction).
---------------------------------------------------------------------------
\69\ Ibid.
---------------------------------------------------------------------------
Based upon the evidence presented by the applicant, we noted the
following concerns regarding whether the Evoke[supreg] SCS System met
the substantial clinical improvement criterion. First, we noted 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 invited 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 requested additional details about how
these two studies' results would be generalizable to the U.S.
population. We invited public comments on whether the Evoke[supreg] SCS
System meets the substantial clinical improvement criterion.
Comment: The applicant acknowledged that the device utilized as the
control group in the Evoke[supreg] study was not commercially available
at the time of the study. However, the applicant stated that the
Evoke[supreg] System Summary of Safety and Effectiveness Data (SSED,
P190002) published by FDA includes information highlighting that the
control group can be considered representative of SCS devices that were
commercially available at the time. As such, the applicant asserts that
the published clinical results of Evoke[supreg] closed-loop SCS versus
the choice of control indicate that the substantial clinical
improvement (SCI) criterion has been met. The applicant explained that,
as stated in FDA SSED, the Evoke[supreg] System open-loop stimulation
mode delivers therapy that is equivalent to other commercially
available open-loop SCS systems in terms of intended use, and with
respect to their biological and technical characteristics. To support
these claims, the applicant provided a comparison of effectiveness
outcomes between Evoke[supreg] open-loop SCS and other FDA-approved
commercial open-loop systems.
Many commenters expressed the opinion that the Evoke[supreg] SCS
System open-loop stimulation mode is largely equivalent to other
commercially available SCS systems, consistent with the FDA's pre-
market approval for Evoke[supreg], and therefore served as an effective
comparator between the Evoke[supreg] SCS System closed-loop stimulation
mode and traditional open-loop stimulation.
Many commenters noted that the use of the same Evoke[supreg] device
in both the experimental and control arms had multiple benefits
supporting the rigor and validity of the Randomized Clinical Trial
(RCT). First, it made it possible to ensure proper double-blinding in
the study. Second, using the Evoke[supreg] system in both arms of the
clinical trial was a way to control for confounding factors associated
with differences between different systems, and only study the
differences in clinical effects between the open- loop and closed- loop
aspects. Third, because the Evoke[supreg] SCS System could measure the
neural response in both groups by quantifying the ECAPs, using the
Evoke[supreg] SCS System in both groups allowed for a more direct
comparison of spinal cord activation.
Many commenters noted that the use of the Evoke[supreg] SCS System
in both study groups was to the study participants' ultimate benefit
since they were implanted with a device that could be switched to a
closed-loop setting that can better manage their pain after the long-
term study is completed.
Response: We appreciate the applicant's and other commenters'
responses to our questions regarding the Evoke[supreg] SCS System.
Based on commenters' inputs, we agree that the Evoke[supreg] SCS System
open-loop stimulation mode is largely equivalent to other commercially
available SCS systems and thus served as an appropriate comparator for
closed-loop versus open-loop spinal cord stimulation. We believe this
RCT comparison served to demonstrate the substantial clinical
improvement provided by the closed-loop system, differentiating it from
open-loop systems typically described by existing device categories,
thus supporting the creation of a new device category.
Comment: A competitor agreed with our concern regarding the use of
the Evoke[supreg] device in both arms of the RCT, stating that there
are no comparative data regarding the relative clinical benefit of the
Evoke[supreg] closed loop system. In contrast, the commenter noted that
the RCT for the Senza SCS system compared that system's 10 kHz high-
frequency, open-loop stimulation to a completely different commercially
available device programmed to use low-frequency, open-loop
stimulation.
Response: We appreciate the commenter's input, however, we do not
believe that the Senza SCS system RCT is equivalent to the situation of
the Evoke[supreg] SCS System RCT, and thus does not provide a
sufficient counterfactual.
[[Page 71923]]
Comment: The applicant stated that the Evoke study was a
prospective, multicenter, randomized, double-blind study statistically
powered to test the efficacy of the Evoke[supreg] SCS System to treat
patients with chronic, intractable pain of the trunk and/or limbs. The
applicant explained that this study design was developed to be
generalizable, preserve objectivity, and minimize bias. The sample size
calculation and expected treatment effect were based on prior open-loop
SCS studies by North et al. (2005),\70\ Kumar et al. (2007),\71\ and
Kapural et al. (2015),\72\ as well as the preliminary results of
Evoke[supreg] closed-loop SCS from the Avalon study. The applicant
explained that the study design and sample size calculation for the
Evoke study were reviewed and approved by FDA to test non-inferiority
and superiority of Evoke[supreg] closed-loop SCS compared to open-loop
SCS.
---------------------------------------------------------------------------
\70\ North RB, Kidd DH, Farrokhi F, Piantadosi SA. Spinal cord
stimulation versus repeated lumbosacral spine surgery for chronic
pain: a randomized, controlled trial. Neurosurgery. 2005;56(1):98-
106; discussion 106-7.
\71\ Kumar K, Taylor RS, Jacques L, Eldabe S, Meglio M, Molet J,
et al. Spinal cord stimulation versus conventional medical
management for neuropathic pain: A multicentre randomised controlled
trial in patients with failed back surgery syndrome: Pain. 2007
Nov;132(1):179-88.
\72\ Kapural L, Yu C, Doust MW, Gliner BE, Vallejo R, Sitzman
BT, et al. Novel 10-khz high-frequency therapy (HF10 therapy) is
superior to traditional low-frequency spinal cord stimulation for
the treatment of chronic back and leg pain: the SENZA-RCT randomized
controlled trial. Anesthesiology. 2015 Oct;123(4):851-60.
---------------------------------------------------------------------------
The applicant explained that the Evoke[supreg] study randomized 134
subjects across 13 investigation sites and that no one site enrolled
more than 18% of study subjects and no interaction was found in post
hoc testing between study sites and treatments in the assessment of the
primary study endpoint (p-value = 0.673). Additionally, the applicant
explained that the randomization effectively generated directly
comparable treatment groups. There were no statistically significant
differences in the comparisons of the baseline characteristics between
groups (p-value > 0.05). The applicant asserted that, therefore, both
the multi-center and randomization requirements of this trial were
effectively fulfilled, which enhances both the internal and external
validity of the statistical conclusions drawn from this study.
The applicant stated that patient populations and use of the device
(including clinical practice and techniques) are similar between
Australia and the U.S.; and therefore, the results from the Australian
Avalon study are generalizable to the U.S. population. The applicant
stated that the baseline characteristics of the patients in the Avalon
Australian study population were very similar to those of the Evoke
U.S. study population. The applicant also explained that the national
medical societies from these geographies are in agreement regarding the
conditions in which to recommend SCS as a treatment option for chronic
pain. The clinical study protocols for both the Evoke and Avalon
studies were designed in accordance with these recommendations. The
applicant further explained that the U.S. and Australian instructions
for use (IFU) used in each of these studies followed similar
procedures, and that study personnel were required to have the
requisite skills and sufficient experience and to complete training on
the Evoke system and study procedures to participate in the studies.
Many commenters stated that they believe the Evoke[supreg] RCT was
powered adequately (i.e., had sufficient sample size) to detect
differences in the primary outcome between groups. Many commenters also
stated that they believe the demographic characteristics of the
Australian and U.S. populations and uses of the device (including
clinical practice and techniques) in the two countries are
substantially similar, and this should not be a concern.
Response: We appreciate the manufacturer's and other commenters'
responses to our questions regarding the Evoke[supreg] SCS System. We
concur with the commenters' inputs that the Evoke[supreg] RCT sample
size was sufficient to detect differences in the primary outcome
between study groups. Based on the commenters' inputs, we also agree
that the results of the Avalon study are generalizable to the U.S.
population.
Comment: A competitor stated they do not believe that the
Evoke[supreg] SCS System has successfully demonstrated substantial
clinical improvement in relation to existing technologies. As an
example, the commenter offered a comparison between some of the results
of the Evoke[supreg] RCT and that of the Senza SCS system RCT. The
Senza RCT compared a control arm of open-loop low-frequency stimulation
to a treatment arm of open-loop high frequency 10 kHz stimulation.
First, the commenter stated that the Evoke[supreg] RCT demonstrated a
treatment effect for back pain at 3 months of 18.3%, while the Senza
RCT demonstrated a treatment effect of 38.4%, more than twice that
shown in the Evoke[supreg] RCT. Second, the commenter stated that while
the Evoke[supreg] RCT demonstrated a statistically significant
improvement in the treatment group for back pain, it did not
demonstrate a statistically significant improvement in leg pain. On the
other hand, the commenter stated that the Senza RCT demonstrated a
statistically significant improvement in both back and leg pain.
Response: We appreciate the commenter's input. We note that the
treatment effects between the Evoke[supreg] RCT and Senza RCT are not
directly comparable since those studies were designed to test the
differences between different mechanisms of SCS (e.g., open-loop versus
closed-loop and low-frequency versus high-frequency, respectively).
Further, we note that the commenter only describes treatment effect
differences at 3 months, while the Evoke RCT has consistently
demonstrated substantial clinical improvements over 24 months. Last,
with respect to the commenter's claim that the Evoke[supreg] RCT did
not demonstrate a statistically significant improvement in leg pain, we
believe the Evoke[supreg] RCT demonstrated statistically significant
improvements in both leg pain and overall back and leg pain combined.
Comment: Many commenters stated that they believe the Evoke[supreg]
SCS System has demonstrated substantial clinical improvement. The
commenters pointed out that the Evoke[supreg] RCT was the first to
compare SCS between traditional open-loop and a novel closed-loop
system using a highly rigorous study design, and it is one of the only
double-blind SCS studies with such a substantial follow-up period
(e.g., follow-ups at 12 months, 24 months, and eventually at 36
months). The commenters stated that the RCT showed substantial clinical
improvement in Evoke[supreg] SCS System over the open-loop SCS in terms
of the overall pain reduction and other patient-reported outcomes. The
commenters stated that the results of all the cited clinical studies
demonstrate that use of closed-loop therapy provides an advantage
compared to use of open-loop therapy, with a clinically meaningful
reduction in pain for patients who suffer from chronic, intractable
pain of the trunk and/or limbs. The commenters noted that given that
currently available systems offer only open-loop therapy, the
availability of the Evoke[supreg] SCS System provides an important
clinical benefit over contemporary systems available in the market.
Response: We appreciate the applicant's and other commenters'
responses to our questions regarding the Evoke[supreg] SCS System.
After consideration of the manufacturer's response and the public
comments received, we believe
[[Page 71924]]
that commenters have addressed our concerns regarding whether the
Evoke[supreg] SCS System meets the substantial clinical improvement
criterion and that the Evoke[supreg] SCS System represents a
substantial clinical improvement over existing technologies based on
the data received from commenters.
The third criteria 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
criteria for device pass-through payment status, a device must pass all
three tests of the cost criteria 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 criteria,
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 stated that 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) [middot] 100 = 152.8 percent).
Therefore, we stated that 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
stated that we believe that the Evoke[supreg] SCS System meet the third
cost significance requirement.
We noted a concern regarding whether the Evoke[supreg] SCS System
meets all 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 invited public comment on whether the Evoke[supreg] SCS System
meets the device pass-through payment criteria discussed in this
section, including the cost criteria for device pass-through payment
status.
Comment: The applicant asserted that the Evoke[supreg] SCS System
meets all the cost criteria required under Sec. 419.66(b)(3).
Specifically, the applicant stated that the internal, implantable
components of the Evoke[supreg] SCS System (e.g., the generator and
charger) meet the cost criteria, while the external components (the
surgical accessories, clinical interface, clinical system transceiver,
pocket console and chargers) do not meet the criteria. The applicant
provided a cost breakdown of the eligible internal components as a
subset of the entire system: the cost of the implanted generator and
charger is $32,000, while the additional components included in the
``system'', i.e., leads, anchors, lead extension, surgical accessories,
etc. are $5,000.
Response: We appreciate the applicant's input. As the applicant
explained in response to our concerns regarding the device eligibility
criteria specified at Sec. 419.66(b), their request for a new device
category would only apply to the generator and charger components of
the Evoke[supreg] SCS System since those are the only components that
meet the device eligibility criteria. The applicant's clarification
regarding the cost breakdown of the eligible versus ineligible
components indicates that cost for just the generator and charger is
$32,000, while the estimated average cost of the entire Evoke[supreg]
SCS system is $37,000. When we recalculate the formulas for the three
cost significance requirements, we find that the eligible Evoke
components still meet all three cost significance requirements and,
thus, the cost criteria required under Sec. 419.66(b)(3). After
consideration of the public comments we received, and consideration of
the cost criteria, we have determined that the Evoke[supreg] SCS System
meets the cost criteria for device pass-through payment status.
After considering the public comments we received and our review of
the device pass-through application, we have determined that the
Evoke[supreg] SCS System meets the criteria for device pass-through.
Therefore, we are finalizing approval for device passthrough payment
status for the Evoke[supreg] SCS System effective beginning January 1,
2023.
[[Page 71925]]
(5) Pathfinder[supreg] Endoscope Overtube
Neptune Medical, Inc. 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 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 solicited public comments on whether the
Pathfinder[supreg] meets the newness criterion.
We did not receive public comments in regard to whether the
Pathfinder[supreg] meets the eligibility criterion at Sec.
419.66(b)(1). Because we received the Pathfinder[supreg] pass-through
application on November 30, 2021, which is within 3 years of August 20,
2019, the date of initial FDA marketing authorization, we agree that
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 solicited public comments on whether the
Pathfinder[supreg] meets the eligibility criteria at Sec. 419.66(b).
We did not receive public comments in regard to whether the
Pathfinder[supreg] meets the eligibility criteria at Sec. 419.66(b)(3)
or (4). Based on our review of the application, we agree with the
applicant that the Pathfinder[supreg] meets the criterion of Sec.
419.66(b).
The criterion 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 RigidizationTM. 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 did not appear that there are any existing pass-
through payment categories that might apply to the Pathfinder[supreg].
We solicited public comment on whether the Pathfinder[supreg] meets the
device category criterion.
We did not receive public comments in regard to whether the
Pathfinder[supreg] meets the eligibility criterion at Sec.
419.66(c)(1) and upon review, it does not appear that there are any
existing pass-through payment categories that might apply to the
Pathfinder[supreg]. Therefore, we agree with the applicant that the
Pathfinder[supreg] meets the criterion of Sec. 419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of FDA's Breakthrough Devices Program and has received
FDA marketing authorization for the indication covered by the
Breakthrough Device designation. The applicant stated 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 asserted 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 anastomosis, 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
[[Page 71926]]
and complications from scope looping, the applicant submitted a
prospective single center study performed over 11 months by two
endoscopists in the United States.\73\ 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.
---------------------------------------------------------------------------
\73\ 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
States.\74\ 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.
---------------------------------------------------------------------------
\74\ 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,\75\ 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.
---------------------------------------------------------------------------
\75\ 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 \76\ 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.
---------------------------------------------------------------------------
\76\ 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 \77\ 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.
---------------------------------------------------------------------------
\77\ 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.
---------------------------------------------------------------------------
[[Page 71927]]
A sixth article \78\ 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.
---------------------------------------------------------------------------
\78\ 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 \79\ 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. 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.
---------------------------------------------------------------------------
\79\ 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 \80\ 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) \81\ 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.
---------------------------------------------------------------------------
\80\ 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.
\81\ 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,\82\
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.
---------------------------------------------------------------------------
\82\ 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 \83\ 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.
[[Page 71928]]
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.
---------------------------------------------------------------------------
\83\ 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 \84\ 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 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.
---------------------------------------------------------------------------
\84\ 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 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.\85\
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,
but made no comparison to the use of other existing strategies or
techniques that could be used for these procedures.\86\ The applicant
also 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 had a concern that there has not been adequate comparison
to other available devices used for similar indication. We asked for
public comment on whether Pathfinder shows superiority over the
existing devices/methods used in cases of endoscope looping and
abnormal anatomy.
---------------------------------------------------------------------------
\85\ 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.
\86\ 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.
---------------------------------------------------------------------------
Furthermore, with respect to the two articles 87 88
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. Finally, we noted that there was 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.
---------------------------------------------------------------------------
\87\ 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.
\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.
---------------------------------------------------------------------------
We invited public comments on whether the Pathfinder[supreg] meets
the substantial clinical improvement criterion.
Response: No comments were submitted regarding whether the
Pathfinder[supreg] meets the substantial clinical improvement
criterion. As such, we maintain our concerns listed in the CY 2023
OPPS/ASC proposed rule. Specifically, we are concerned that the
majority of the articles provided were a clinical case series which did
not necessarily allow for a clear comparison with common mediation
strategies. 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, but made no comparison to the use of other existing
strategies or techniques that could be used for these procedures. We
noted that while there are other devices available which can help
assist the Endoscopist in procedures which are difficult to perform and
the applicant mentioned the existence of such devices, the applicant
did not provide studies comparing the efficacy of the
Pathfinder[supreg] with other rigidization devices. Overall, we do not
believe that there has not been an adequate comparison of the
Pathfinder[supreg] to other available devices used for similar
indication. In addition, we remain concerned that all the clinical case
study series presented in the applicant's articles were based on small
sample sizes. Moreover, we are concerned that in both articles
presented to support the
[[Page 71929]]
substantial clinical improvement claim in reducing endoscopists'
workload during endoscopy procedures, the authorships were identical
for the same study center and time frame and there were only two
participating endoscopists. As such, we believe it is difficult to make
comparisons due to the lack of a diverse pool of endoscopists.
Furthermore, factors such as center and clinical staff characteristics
in both studies were difficult to control, which makes it difficult to
determine if observed differences resulted from the Pathfinder[supreg]
or from confounding variables. Finally, there was potential for some
level of selection bias if providers were allowed to select the manner
and order in which patients were treated, and thereby potentially
influence outcomes seen in these studies. Because of these reasons, we
do not believe that the Pathfinder[supreg] represents a substantial
clinical improvement relative to existing technology currently
available.
After our review of the device pass through application, we are not
approving the Pathfinder[supreg] for transitional pass-through payment
status in CY 2023 because the technology does not meet the substantial
clinical improvement criterion. Because we have determined that the
Pathfinder[supreg] does not meet the substantial clinical improvement
criterion, we are not evaluating whether the device meets the cost
criterion.
(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 Uretero1TM 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 Uretero1TM 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 solicited public comments on whether
the Uretero1 meets the newness criterion.
We did not receive public comments in regard to whether the
Uretero1 meets the newness criterion at Sec. 419.66(b)(1). Because we
received the Uretero1 pass-through application on March 1, 2022, which
is within 3 years of November 23, 2021, the date of FDA 510(k) approval
to market the Uretero1, we have concluded that 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
tissue when it is inserted to visualize organs, cavities, and canals in
the urinary tract.83 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
[[Page 71930]]
incident to a service. We solicited public comments on whether the
Uretero1 meets the eligibility criterion at Sec. 419.66(b).
We did not receive any comments on whether the Uretero1 meets the
eligibility criteria at Sec. 419.66(b)(3) or (4). We agree with the
applicant that the Uretero1 device meets the criteria of Sec.
419.66(b)(3) and (4).
The criteria for establishing new device categories are specified
at Sec. 419.66(c). The first criterion, at Sec. 419.66(c)(1),
provides that CMS determines that 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.\84\ 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 solicited
public comment on whether the Uretero1 meets the device category
criterion.
We did not receive any comments on whether the Uretero1 meets the
criterion for establishing new device categories specified at Sec.
419.66(c)(1). However, we agree that there is no existing pass-through
payment category that appropriately describes the Uretero1. The
Uretero1 is a single use, disposable, digital flexible ureteroscope
that may be used in urologic procedures (ureteroscopy) to diagnose and
treat conditions of the urinary tract. Therefore, the existing pass-
through code for a single-use, disposable, endoscopic device for GI
imaging does not apply. Based on this information, we have determined
that the Uretero1 meets the eligibility criterion at Sec.
419.66(c)(1).
The second criterion for establishing a device category, at Sec.
419.66(c)(2), provides that CMS determines either of the following: (i)
that a device to be included in the category has demonstrated that it
will substantially improve the diagnosis or treatment of an illness or
injury or improve the functioning of a malformed body part compared to
the benefits of a device or devices in a previously established
category or other available treatment; or (ii) for devices for which
pass-through status will begin on or after January 1, 2020, as an
alternative to the substantial clinical improvement criterion, the
device is part of FDA's Breakthrough Devices Program and has received
FDA marketing authorization 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.\85\
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.\86\ 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.
Another article included in the literature review by Ofstead et
al.\87\ describes the risks associated with inefficient processing of
reusable ureteroscopes using a time-driven activity-based costing
(TDABC).\88\ This article, by Isaacson et al. (2017), notes the time
and costs involved in the decontamination and sterilization processes
of reusable flexible ureteroscopes.\89\ 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' 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.
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.\90\ In the
letter, FDA confirms it has received over 450 Medical Device Reports
(MDRs)
[[Page 71931]]
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.\91\ 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.\92\
To support its second claim that the Uretero1 reduces risk of
contamination, the applicant again cited the literature review by
Ofstead et al.\93\ Referencing the article by Lee et al., titled
``Increasing potential risks of contamination from repetitive use of
endoscope,'' \94\ 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.
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.\95\ 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.\96\ 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.\97\
The Uretero1 device was not included as a comparison in this study
either.
The applicant referred to a study by Bozzini et al.\98\ 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).
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.\99\
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 were cultured and
visually inspected after they had been cleaned and sterilized with
hydrogen peroxide gas.\100\ 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.\101\ 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.\102\ 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.
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.\103\
In summary, the applicant references these citations to support its
assertions that the Uretero1 single-use disposable digital flexible
ureteroscope presents a substantial clinical improvement over existing
devices. We noted 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 included 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
welcomed additional evidence demonstrating a comparison of
[[Page 71932]]
the Uretero1's performance against other similarly disposable devices.
We also noted that the applicant cited an FDA news release \104\ 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 \105\ 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.
We solicited public comments on whether the Uretero1 meets the
substantial clinical improvement criterion.
We did not receive any comments in regard to the second criterion
for establishing a device category as specified at Sec. 419.66(c)(2),
or a response to our concern about a direct comparison to another
disposable device. The applicant provided source articles that
demonstrated the increased risks associated with using reusable
devices, but did not provide clinical studies that referenced another
disposable device as a comparator. While we agree that it would be
helpful to see comparative studies between the single-use Uretero1
device and other disposable devices, we agree that the evidence
demonstrating the improved patient outcomes and reduced patient risk
associated with the disposable device in comparison with reusable
devices represents substantial clinical improvement.
The third criteria 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 56.
BILLING CODE 4120-01-P
[[Page 71933]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.072
BILLING CODE 4120-01-C
To meet the cost criteria for device pass-through payment status, a
device must pass all three tests of the cost criteria 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 criteria, 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
Uretero1 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
[[Page 71934]]
that the estimated average reasonable cost of the devices in the
category must exceed the cost of the device-related portion of the APC
payment amount for the related service by at least 25 percent, which
means that the device cost needs to be at least 125 percent of the
offset amount (the device-related portion of the APC found on the
offset list). The estimated average reasonable cost of $1,500 for
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 solicited public comment on whether the Uretero1 meets the
device pass-through payment criteria discussed in this section,
including the cost criteria for device pass-through payment status.
We did not receive any comments with regard to any of the cost
significance requirements specified at Sec. 419.66(d). Based on our
findings from the first, second, and third cost significant tests, we
believe that the Uretero1 device meets the cost significance criteria
specified at Sec. 419.66(d).
After reviewing the device pass-through application, we have
determined that the Uretero1 single-use flexible disposable digital
flexible ureteroscope meets the criteria for device pass-through.
Therefore, we are approving the Uretero1 for transitional pass-through
payment status beginning January 1, 2023.
B. Proposal to Publicly Post OPPS Device Pass-Through Applications
As noted in the CY 2023 OPPS/ASC proposed rule (87 FR 44620),
applicants seeking OPPS transitional pass-through status for medical
devices (``OPPS device pass-through'') must submit an application to
CMS containing certain information.\89\ The application is currently
undergoing the Paperwork Reduction Act reapproval process, which has
notice and comment periods separate from the CY 2023 OPPS/ASC proposed
rule. The CMS-10052 package 60-day notice was published in the Federal
Register on April 29, 2022 (87 FR 25488). The CMS-10052 package 30-day
Federal Register Notice was published on July 15, 2022 (87 FR 42484),
and was submitted to OMB on July 18, 2022, as an extension with no
changes. 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.
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\89\ 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.
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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 CY 2023 OPPS/ASC proposed rule, we stated that 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. We further stated in the proposed rule that, 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,
[[Page 71935]]
we explained that 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 stated that we
believe 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 stated in the proposed rule that we believe 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. We further explained that 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 applications we receive have been increasing over
time. That is, making the applications available to the public online
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 proposed to publicly post future applications for OPPS
device pass-through payment online.\90\ Specifically, beginning with
applications submitted on or after March 2, 2023, we proposed 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 proposed to post online information
acquired subsequent to the application submission (e.g., updated
application information, additional clinical studies, etc.). We
proposed that we would publicly post all completed application forms
and related materials at the same time that the proposed rule was
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 did not propose
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.
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\90\ CMS did not propose 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 proposed 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 proposed 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 solicited public comments on
this proposal.
We noted in the CY 2023 OPPS/ASC proposed rule that at times
applicants furnish information marked as proprietary or trade secret
information along with their applications for OPPS device pass-through
payment. We explained that, 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.\91\ Consistent with the current application
instructions, we noted that 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
emphasized, however, that it is the applicant's responsibility to
clearly identify data and information as such in its application.
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\91\ 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.
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Additionally, we noted 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 reiterated 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. As we stated in the CY 2023 OPPS/ASC proposed rule, 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. We explained that our 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 stated that we did not expect our
proposal would place additional burdens on future applicants because we
did not propose 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 in the CY 2023 OPPS/ASC proposed rule and throughout this
section, the aim of our 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 stated that 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 explained that we would, 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 stated that 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. We
further stated that, 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
[[Page 71936]]
medical device, and the nature of the supporting materials provided).
We explained that 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 added that 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
stated that 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. We stated that in the proposed rule, we would also
continue to provide discussion of the concerns or issues we identified
with respect to applications submitted, and 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 in the CY 2023 OPPS/ASC proposed rule and this final
rule, we believe the proposal to 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 further noted in the CY 2023 OPPS/ASC proposed rule that if we
adopted this proposal in the final rule, we would begin referring to
publicly posted applications in the CY 2024 rulemaking cycle, depending
on when they are received. We explained that this would mean 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. We stated that 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. We further stated that
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
with summaries and cross-references to the publicly posted
applications, depending on when the application was submitted). We
stated that 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 solicited 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. We stated that 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 noted 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.
We explained that our goal in making these proposals under both the
hospital OPPS and IPPS was 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 sought 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, or in the alternative, March 1,
2023.
Comment: We received several public comments regarding this policy
proposal. Some commenters were fully supportive of the proposal. These
commenters cited various reasons for their support, including that the
proposal would enhance the transparency of the application evaluation
process, streamline CMS' internal processes for reviewing and
evaluating applications, and facilitate and foster more informed public
comment and greater engagement from interested parties. A commenter
specifically expressed appreciation for CMS' efforts to keep
confidential and trade secret information private, provided the
applicant clearly marks the information as such. Another commenter who
supported the proposal requested that CMS make clear in the final rule,
if it moves forward with its proposal, that it will retain a mechanism
to enable applicants to submit proprietary or trade secret information
that is not posted online, consistent with CMS' current policy.
Finally, a commenter noted its appreciation for the improvements to
the NTAP application posting process incorporated in the FY 2023 IPPS/
LTCH PPS final rule, and further stated that it appreciated that CMS
reflected these improvements in the proposed OPPS pass-through payment
application posting process in the CY 2023 OPPS/ASC proposed rule. This
commenter expressed its general support of the OPPS transitional pass-
through payment policy, stating that it represents a significant
success for the Medicare program. According to the commenter, the
policy has helped reduce disincentives to the adoption of new
technologies under the OPPS, and has accelerated access to those
technologies for Medicare beneficiaries and encouraged investment in
the development of innovative new products and therapies. This
commenter further stated that it appreciates the significant effort and
resources that CMS has dedicated to the management of the transitional
pass-through payment program, and hopes the agency will proceed on any
reasonable steps to improve the efficiency and capacity of the
application and review process.
Response: We appreciate the commenters' support for our proposal
and our efforts toward greater transparency, public input, and
improving and streamlining the device pass-through application process,
as well as the support for our device pass-through payment policy
generally. Given this support, and after further consideration of the
proposal and feedback from other commenters, as
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further discussed below, we are finalizing our proposal to post
completed OPPS device pass-through applications and related materials
online, with a modified effective date. We note that under the policy
we are finalizing in this rule, we will provide a mechanism for
applicants to submit confidential information, including proprietary or
trade secret information that will not be posted online, as discussed
later in this section.
Comment: Some commenters urged CMS not to adopt the proposal,
asserting that applicants may have proprietary and trade-sensitive
information that, while appropriate to share with CMS for purposes of
submission of a device pass-through application, may not be appropriate
to share with the public or competitors. These commenters believed that
the proposal may lead to a lack of rigorous information sharing between
applicants and CMS, and that such transparency should be of primary
concern to the agency as it reviews such applications to determine
eligibility. These commenters asserted that public posting is unlikely
to benefit Medicare patients, but is likely to impose additional legal
and commercial burdens on innovators without benefit for the Medicare
program.
Another commenter stated that while it appreciates the effort to
provide more information to the public for input to inform pass-through
status decisions, they strongly believed that CMS' policy proposal
poses more risk than benefit to medical product innovation. First, the
commenter explained that pass-through applications contain a
significant amount of proprietary information and data, and that the
protection of this data is paramount to the research and development
process for medical devices and other innovative products, including
drugs and biologics. The commenter stated that although CMS notes that
it is incumbent on applicants to indicate which components are
considered confidential or proprietary, the commenter believed that
public posting of these applications introduces an opportunity for
irreversible and unintentional disclosure that is not present under the
current process. The commenter also pointed to CMS' statement in the
proposed rule (87 FR 44621) that, due to the need for public feedback,
it would not be able to consider applications where the applicant deems
the entirety of the submission to be proprietary or confidential for
uses beyond internal agency review. The commenter claimed that
determinations about the proprietary nature of information for purposes
of public disclosure are beyond the scope of the CMS' authority,
particularly when there is no clarity on what information CMS deems
necessary for public feedback. The commenter asserted that
manufacturers should retain discretion over what information is
disclosed beyond the reviewing agency. The commenter further stated
that the current approach that CMS uses to summarize, evaluate, and
notify the public of its pass-through status determinations has proven
adequate, and that CMS has used the notice and comment rulemaking
process to collect public feedback on pass-through applications since
2016 without issue. The commenter added that should CMS find it
necessary to provide additional information to the public, it should
work coordinately with applicants to determine what is appropriate to
disclose.
According to this commenter, the impact of publicly posting
applications and supplemental material for pass-through status is
likely to undermine the intent of transitional pass-through payment.
The commenter asserted that, as demonstrated by its established
success, the current process protects the interests of developers
assuming the substantial risk of medical product innovation, while
still allowing CMS to collect sufficient information to inform the
public and solicit feedback. The commenter urged CMS to not finalize
this policy and to protect the integrity of this vital means of
allowing providers to adopt new medical products while lowering costs
and improving health outcomes.
Response: We appreciate the commenters' feedback. As discussed in
the proposed rule, under our current OPPS device pass-through
application review process, we will have a mechanism for applicants to
submit confidential information, including proprietary and trade secret
information, that will not be posted online. We anticipate providing a
section on the application where applicants can submit confidential
information separately from non-confidential information, or otherwise
mark sections of the application for which we will not pose the
information online. The OPPS device pass-through application existing
instructions specify that the data provided in the application may be
subject to disclosure and instructs the applicant to mark any
proprietary or trade secret information so CMS can attempt, to the
extent allowed under Federal law, to protect the information from
public view. Consistent with our current policy, and under the policy
we are finalizing in this rule, if an applicant submits confidential
information as part of its application and identifies it as such, we
will attempt, to the extent allowed by Federal law, to keep this
information from public view, including public posting. We anticipate
providing a section on the application where applicants can submit
confidential information separately from non-confidential information,
or otherwise marking sections or questions in the application for which
we will not post the information online. Applicants should expect that,
unless otherwise noted in the application that certain information will
not be posted publicly (for example, contact information), everything
may be posted publicly. We emphasize that it is the applicant's
responsibility to put confidential information only in the areas of the
application designated for confidential information and not elsewhere
in the application. However, as previously noted, applicants should
consider what they include in a confidential section of the application
given that we generally do not consider any information that cannot be
made public when determining whether a device meets the pass-through
payment criteria. We note that, unlike the New Technology Add-on
Payment (NTAP) applications, we believe applicants generally have
limited need to submit confidential information, including proprietary
or trade secret information as part of their OPPS device pass-through
payment applications, given that a device must have FDA clearance or
approval prior to the date of application. Because of this, and because
the policy we are finalizing in this rule provides for protection of
confidential information submitted as part of an application provided
it is identified as such, we do not believe the policy would result
lack of rigorous information sharing between applicants and CMS, or
impose additional legal or commercial burdens on innovators, as
suggested by a commenter.
Additionally, we note that in the past we have received
applications in which all the data and information in the application
are marked as proprietary or confidential, or where certain information
provided in support of the applicant's assertions regarding eligibility
for pass-through payment status, for example a claim of substantial
clinical improvement, is marked as such. In such cases, we reiterate
that we generally will 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
[[Page 71938]]
is important that we provide the information needed for the public to
meaningfully comment on the OPPS device pass-through payment
applications, including the applicants' claims about meeting the OPPS
device pass-through payment criteria. We believe that maintaining
transparency with respect to the information we consider in making our
device pass-through payment determinations will lead to greater
information exchange and more informed device pass-through payment
decisions which help to ensure appropriate payment for and access to
new and innovative medical devices and technologies, ultimately
benefiting Medicare patients and the Medicare program generally.
In addition, because we will continue to allow applicants to
identify information they consider confidential, including proprietary
and trade secret information, so that it may be protected from public
view, including public posting, we do not believe public posting of
applications introduces an opportunity for irreversible and
unintentional disclosure, or undermines the interests of developers or
the intent of the OPPS device pass-through payment program, as claimed
by a commenter. Furthermore, we emphasize that under our current policy
as well as the policy we are finalizing in this rule, CMS does not make
determinations about the proprietary nature of information for purposes
of public disclosure. Instead, as explained previously, applicants make
these determinations by identifying which information is appropriate to
disclose publicly and which information is confidential and should not
be disclosed. Thus, the applicants, not CMS, retain discretion to
determine what information can be publicly disclosed.
After considering the comments and for the reasons discussed, we
are finalizing our proposal to publicly post OPPS device pass-through
applications online, including the completed application forms and
certain related materials (as described previously), and any additional
updated application information submitted subsequent to the initial
application submission (except information identified by the applicant
as confidential), at the time the proposed rule is issued. In addition,
we are finalizing, as proposed, a mechanism for applicants to submit
confidential information that would not be posted online, such as in a
separate section of the application, or by identifying particular
questions for which the information submitted would not be publicly
posted. Furthermore, we are finalizing as proposed our proposal with
respect to the treatment of copyrighted information. With the exception
of information included in a confidential information section of the
application, and materials identified by the applicant as copyrighted
and/or not otherwise releasable to the public, the contents of the
application and related materials may be posted publicly.
In the CY 2023 OPPS/ASC proposed rule, we proposed that this policy
would apply to applications submitted on or after January 1, 2023;
however, we also solicited comment on whether we should consider an
alternative implementation date of March 1, 2023. We did not receive
any comments regarding the implementation date of this policy, however,
after further consideration, we are finalizing the alternative
implementation date of March 1, 2023. As we explained in the proposed
rule, if we were to finalize our proposal with an effective date of
January 1, 2023, we would begin referring to publicly posted
applications in the CY 2024 rulemaking cycle, depending on when
applications are received. This would mean that some OPPS device pass-
through applications (those received on or before December 31, 2022)
would follow the current process and be described fully in the proposed
rule consistent with our historical practice (unless they elect to have
their applications publicly posted), and other OPPS device pass-through
applications (those received after the effective date of January 1,
2023) would be summarized in the proposed rule with a cross-reference
to the publicly posted application, consistent with our new policy.
Thus, if our policy were effective January 1, 2023, device pass-through
applications could be discussed in two different ways in the CY 2024
proposed and final rules. We believe that this would be confusing to
applicants and interested parties. Therefore, we are finalizing the
alternative implementation date of March 1, 2023. Using this
alternative effective date, we will begin publicly posting all OPPS
device pass-through applications summarized with a cross-reference to
the publicly posted application, as previously described beginning in
the CY 2025 proposed and final rules consistent with our final policy.
As noted in the proposed rule, this means that all OPPS device pass-
through applications discussed in the CY 2024 OPPS proposed and final
rules will follow the current process and will be fully described in
the proposed rule consistent with our historical practice.. We further
clarify that we will post these application materials at the time the
proposed rule is issued, and that we will not post applications that
are withdrawn prior to the date the proposed rule is issued.
C. 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 final rule with comment period. 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 final rule with comment period. 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
[[Page 71939]]
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.C.1.b of the CY 2023 OPPS/ASC proposed rule (87 FR 44622
through 44623) 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.C.3 and IV.C.4 of the CY 2023 OPPS/ASC
proposed rule (87 FR 44624 through 44625).
b. Use of the Three Criteria To Designate Device-Intensive Procedures
We clarified our established policy in the CY 2018 OPPS/ASC final
rule with comment period (82 FR 52474), where we explained that device-
intensive procedures require the implantation of a device and
additionally are subject to the following criteria:
All procedures must involve implantable devices that would
be reported if device insertion procedures were performed;
The required devices must be surgically inserted or
implanted devices that remain in the patient's body after the
conclusion of the procedure (at least temporarily); and
The device offset amount must be significant, which is
defined as exceeding 40 percent of the procedure's mean cost.
We changed our policy to apply these three criteria to determine
whether procedures qualify as device-intensive in the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66926), where we stated that we
would apply the no cost/full credit and partial credit device policy--
which includes the three criteria listed previously--to all device-
intensive procedures beginning in CY 2015. We reiterated this position
in the CY 2016 OPPS/ASC final rule with comment period (80 FR 70424),
where we explained that we were finalizing our proposal to continue
using the three criteria established in the CY 2007 OPPS/ASC final rule
with comment period for determining the APCs to which the CY 2016
device intensive policy will apply. Under the policies we adopted in
CYs 2015, 2016, and 2017, all procedures that require the implantation
of a device and meet the previously described criteria are assigned
device-intensive status, regardless of their APC placement.
2. Device-Intensive Procedure Policy for CY 2019 and Subsequent Years
As part of our effort to better capture costs for procedures with
significant device costs, in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58944 through 58948), for CY 2019, we modified
our criteria for device-intensive procedures. We had heard from
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
[[Page 71940]]
comment period (81 FR 79658), we finalized a policy for CY 2017 to
apply device-intensive status with a default device offset set at 41
percent for new HCPCS codes describing procedures requiring the
implantation or insertion of a device that did not yet have associated
claims data until claims data are available to establish the HCPCS
code-level device offset for the procedures. This default device offset
amount of 41 percent was not calculated from claims data; instead, it
was applied as a default until claims data were available upon which to
calculate an actual device offset for the new code. The purpose of
applying the 41-percent default device offset to new codes that
describe procedures that implant or insert devices was to ensure ASC
access for new procedures until claims data become available.
As discussed in the CY 2019 OPPS/ASC proposed rule and final rule
with comment period (83 FR 37108 through 37109 and 58945 through 58946,
respectively), in accordance with our policy stated previously to lower
the device offset percentage threshold for procedures to qualify as
device-intensive from greater than 40 percent to greater than 30
percent, for CY 2019 and subsequent years, we modified this policy to
apply a 31-percent default device offset to new HCPCS codes describing
procedures requiring the implantation of a device that do not yet have
associated claims data until claims data are available to establish the
HCPCS code-level device offset for the procedures. In conjunction with
the policy to lower the default device offset from 41 percent to 31
percent, we continued our current policy of, in certain rare instances
(for example, in the case of a very expensive implantable device),
temporarily assigning a higher offset percentage if warranted by
additional information such as pricing data from a device manufacturer
(81 FR 79658). Once claims data are available for a new procedure
requiring the implantation or insertion of a device, device-intensive
status is applied to the code if the HCPCS code-level device offset is
greater than 30 percent, according to our policy of determining device-
intensive status by calculating the HCPCS code-level device offset.
In addition, in the CY 2019 OPPS/ASC final rule with comment
period, we clarified that since the adoption of our policy in effect as
of CY 2018, the associated claims data used for purposes of determining
whether or not to apply the default device offset are the associated
claims data for either the new HCPCS code or any predecessor code, as
described by CPT coding guidance, for the new HCPCS code. Additionally,
for CY 2019 and subsequent years, in limited instances where a new
HCPCS code does not have a predecessor code as defined by CPT, but
describes a procedure that was previously described by an existing
code, we use clinical discretion to identify HCPCS codes that are
clinically related or similar to the new HCPCS code but are not
officially recognized as a predecessor code by CPT, and to use the
claims data of the clinically related or similar code(s) for purposes
of determining whether or not to apply the default device offset to the
new HCPCS code (83 FR 58946). Clinically related and similar procedures
for purposes of this policy are procedures that have 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 proposed to use CY 2021 claims information for determining
device offset percentages and assigning device-intensive status.
Comment: Many commenters requested that we use invoice or cost data
submitted by manufacturers to determine device-intensive status and the
device offset percentage for a procedure. Other commenters requested
that we use invoice data, or a subset of claims data, to determine
device-intensive status for the procedure and that hospitals have
inaccurately coded devices as surgical supplies and, therefore, the
device offset percentage calculated from our claims statistics does not
reflect the true cost of the device. Specifically, commenters requested
that we assign device-
[[Page 71941]]
intensive status to the following procedures:
HCPCS code C9757 (Laminotomy (hemilaminectomy), with
decompression of nerve root(s), including partial facetectomy,
foraminotomy and excision of herniated intervertebral disc, and repair
of annular defect with implantation of bone anchored annular closure
device, including annular defect measurement, alignment and sizing
assessment, and image guidance; 1 interspace, lumbar);
CPT code 55880 (Ablation of malignant prostate tissue,
transrectal, with high intensity-focused ultrasound (hifu), including
ultrasound guidance);
CPT code 58674 (Laparoscopy, surgical, ablation of uterine
fibroid(s) including intraoperative ultrasound guidance and monitoring,
radiofrequency);
CPT code 65426 (Excision or transposition of pterygium;
with graft);
CPT code 65778 (Placement of amniotic membrane on the
ocular surface; without sutures).
Response: We are not accepting the commenters' recommendation to
use invoices as an alternative data source for determining device-
intensive status for procedures that do not have a device offset
percentage that exceeds our 30 percent device-intensive threshold based
on claims data available for this final rule with comment period. As
discussed in section II.A.1 of this final rule with comment period, we
rely on claims and cost report data for hospital outpatient department
services, using the most recent available data to construct our
database. Under our current policy, hospitals are still expected to
adhere to the guidelines of correct coding and append the correct
device code to the claim when applicable and we believe our database
represents the best source of device cost information available to us.
We do not believe it would be appropriate under our current policy to
eliminate in whole or in part the available claims data that we have
for ratesetting and determining device offset percentages.
Comment: One commenter recommended that we assign the device offset
percentage of CPT code 0627T (Percutaneous injection of allogeneic
cellular and/or tissue-based product, intervertebral disc, unilateral
or bilateral injection, with fluoroscopic guidance, lumbar; first
level) to 0629T (Percutaneous injection of allogeneic cellular and/or
tissue-based product, intervertebral disc, unilateral or bilateral
injection, with ct guidance, lumbar; first level) as both procedures
use the same device.
Response: For the CY 2023 OPPS/ASC proposed rule and this final
rule with comment period, we do not have any claims data for CPT code
0629T to determine a device offset percentage. Under our current
policy, we may assign an alternative device offset percentage if we
have claims data from a clinically similar procedure code that uses the
same device. We agree with commenters that this policy can apply to CPT
code 0629T. CPT code 0629T is clinically similar to CPT code 0627T and
uses the same device as this procedure. Therefore, we are accepting the
commenter's recommendation and, for CY 2023, we are assigning the
device offset percentage of CPT code 0627T to CPT code 0629T and
assigning CPT code 0629T device-intensive status.
Comment: One commenter requested that we verify that the device
costs associated with CPT code 0421T (Transurethral waterjet ablation
of prostate, including control of post-operative bleeding, including
ultrasound guidance, complete (vasectomy, meatotomy, cystourethroscopy,
urethral calibration and/or dilation, and internal urethrotomy are
included when performed)) include the cost of the pass-through device
category HCPCS code C2596 (Probe, image-guided, robotic, waterjet
ablation) which is expiring on January 1, 2023.
Response: We reviewed our device categories used to determine
device offset percentages for this final rule with comment period and
verified that HCPCS code C2596 is indeed categorized as a device. The
costs associated with this device are reflected in the device offset
percentage of CPT code 0421T.
Comment: One commenter stated that, while CMS changed the
descriptor to HCPCS code C1889 (Implantable/insertable device, not
otherwise classified), confusion continues to exist among hospitals, as
evidenced by their reluctance to use HCPCS C1889 to report device costs
for procedures that do not have device-intensive status. The commenter
requested that CMS clarify that HCPCS code C1889 may be billed with a
procedure that does not have device-intensive status.
Response: HCPCS code C1889 may be billed with a procedure that does
not have device-intensive status. In the CY 2019 OPPS/ASC final rule
with comment period (83 FR 58950), we finalized our revision to the
HCPCS C1889 to remove the specific applicability to device-intensive
procedures to clarify this point. Additionally, in our April 2022
update of the Hospital Outpatient Prospective Payment System, we
revised Chapter 4, Section 61.1 of the Medicare Claims Processing
Manual to clarify that hospitals should report HCPCS code C1889 for the
use of devices that are not described by a specific HCPCS code. We will
continue to monitor stakeholder feedback regarding the use of HCPCS
code C1889 to determine if additional guidance is needed.
After consideration of the public comments we received, we are
finalizing our proposal to use CY 2021 claims information for
determining device offset percentages and assigning device-intensive
status.
The full listing of the final CY 2023 device-intensive procedures
can be found in Addendum P to the CY 2023 OPPS/ASC final rule with
comment period (which is available via the internet on the CMS
website). Further, our claims accounting narrative contains a
description of our device offset percentage calculation. Our claims
accounting narrative for this final rule with comment period can be
found under supporting documentation for the CY 2023 OPPS/ASC final
rule on our website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
3. Device Edit Policy
In the CY 2015 OPPS/ASC final rule with comment period (79 FR
66795), we finalized a policy and implemented claims processing edits
that require any of the device codes used in the previous device-to-
procedure edits to be present on the claim whenever a procedure code
assigned to any of the APCs listed in Table 5 of the CY 2015 OPPS/ASC
final rule with comment period (the CY 2015 device-dependent APCs) is
reported on the claim. In addition, in the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70422), we modified our previously existing
policy and applied the device coding requirements exclusively to
procedures that require the implantation of a device that are assigned
to a device-intensive APC. In the CY 2016 OPPS/ASC final rule with
comment period, we also finalized our policy that the claims processing
edits are such that any device code, when reported on a claim with a
procedure assigned to a device-intensive APC (listed in Table 42 of the
CY 2016 OPPS/ASC final rule with comment period (80 FR 70422)) will
satisfy the edit.
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79658
through 79659), we changed our policy for CY 2017 and subsequent years
to apply the CY 2016 device coding requirements to the newly defined
[[Page 71942]]
device-intensive procedures. For CY 2017 and subsequent years, we also
specified that any device code, when reported on a claim with a device-
intensive procedure, will satisfy the edit. In addition, we created
HCPCS code C1889 to recognize devices furnished during a device-
intensive procedure that are not described by a specific Level II HCPCS
Category C-code. Reporting HCPCS code C1889 with a device-intensive
procedure will satisfy the edit requiring a device code to be reported
on a claim with a device-intensive procedure. In the CY 2019 OPPS/ASC
final rule with comment period, we revised the description of HCPCS
code C1889 to remove the specific applicability to device-intensive
procedures (83 FR 58950). For CY 2019 and subsequent years, the
description of HCPCS code C1889 is ``Implantable/insertable device, not
otherwise classified''.
Comment: Some commenters requested that CMS restore the device-to-
procedure and procedure-to-device edits. Commenters recommended that we
apply such edits to specific procedures, such as total hip arthroplasty
or total knee arthroplasty procedures, and require a specific device
code rather than any device code.
Response: As we stated in the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66794), we continue to believe that the
elimination of device-to-procedure edits and procedure-to-device edits
is appropriate due to the experience hospitals now have in coding and
reporting these claims fully. Under our current policy, hospitals are
still expected to adhere to the guidelines of correct coding and append
the correct device code to the claim when applicable. While we believe
our current device edits policy, which requires that a device code be
reported on a claim for procedures that have significant device costs,
continues to accurately capture the device costs associated with
device-intensive procedures and provides the necessary flexibility to
hospitals to code claims accurately, we will continue to monitor the
reporting of device costs on hospital outpatient claims to determine if
any modifications to our existing policy are warranted in future
rulemaking.
We did not propose any changes this policy for CY 2023. After
consideration of the public comments we received, we are finalizing our
proposal, without modification, to continue our device edits 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
[[Page 71943]]
amount of the credit. We adopted this change in policy in the preamble
of the CY 2014 OPPS/ASC final rule with comment period and discussed it
in subregulatory guidance, including Chapter 4, Section 61.3.6 of the
Medicare Claims Processing Manual. Further, in the CY 2021 OPPS/ASC
final rule with comment period (85 FR 86017 through 86018, 86302), we
made conforming changes to our regulations at Sec. 419.45(b)(1) and
(2) that codified this policy.
We did not propose any changes and we did not receive any public
comments related to our policies regarding payment for no cost/full
credit and partial credit devices for CY 2023.
V. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
A. OPPS Transitional Pass-Through Payment for Additional Costs of
Drugs, Biologicals, and Radiopharmaceuticals
1. Background
Section 1833(t)(6) of the Act provides for temporary additional
payments or ``transitional pass-through payments'' for certain drugs
and biologicals. Throughout the proposed rule, the term ``biological''
is used because this is the term that appears in section 1861(t) of the
Act. A ``biological'' as used in the proposed rule includes (but is not
necessarily limited to) a ``biological product'' or a ``biologic'' as
defined under section 351 of the PHS Act. As enacted by the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA) (Pub.
L. 106-113), this pass-through payment provision requires the Secretary
to make additional payments to hospitals for: current orphan drugs for
rare diseases and conditions, as designated under section 526 of the
Federal Food, Drug, and Cosmetic Act; current drugs and biologicals and
brachytherapy sources used in cancer therapy; and current
radiopharmaceutical drugs and biologicals. ``Current'' refers to those
types of drugs or biologicals mentioned above that are hospital
outpatient services under Medicare Part B for which transitional pass-
through payment was made on the first date the hospital OPPS was
implemented.
Transitional pass-through payments also are provided for certain
``new'' drugs and biologicals that were not being paid for as an HOPD
service as of December 31, 1996, and whose cost is ``not
insignificant'' in relation to the OPPS payments for the procedures or
services associated with the new drug or biological. For pass-through
payment purposes, radiopharmaceuticals are included as ``drugs.'' As
required by statute, transitional pass-through payments for a drug or
biological described in section 1833(t)(6)(C)(i)(II) of the Act can be
made for a period of at least 2 years, but not more than 3 years, after
the payment was first made for the drug as a hospital outpatient
service under Medicare Part B. Proposed CY 2023 pass-through drugs and
biologicals and their designated APCs are assigned status indicator
``G'' in Addenda A and B to the proposed rule (which are available on
the CMS website).\92\
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Section 1833(t)(6)(D)(i) of the Act specifies that the pass-through
payment amount, in the case of a drug or biological, is the amount by
which the amount determined under section 1842(o) of the Act for the
drug or biological exceeds the portion of the otherwise applicable
Medicare OPD fee schedule that the Secretary determines is associated
with the drug or biological. The methodology for determining the pass-
through payment amount is set forth in regulations at 42 CFR 419.64.
These regulations specify that the pass-through payment equals the
amount determined under section 1842(o) of the Act minus the portion of
the APC payment that CMS determines is associated with the drug or
biological.
Section 1847A of the Act establishes the average sales price (ASP)
methodology, which is used for payment for drugs and biologicals
described in section 1842(o)(1)(C) of the Act furnished on or after
January 1, 2005. The ASP methodology, as applied under the OPPS, uses
several sources of data as a basis for payment, including the ASP, the
wholesale acquisition cost (WAC), and the average wholesale price
(AWP). In the proposed rule, the term ``ASP methodology'' and ``ASP-
based'' are inclusive of all data sources and methodologies described
therein. Additional information on the ASP methodology can be found on
our website at: https://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 57. Most of these drugs and biologicals
will have received OPPS pass-through payment for 3 years during the
period of January 1, 2019 through
[[Page 71944]]
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 was proposed to be $135 for CY 2023), as discussed
further in section V.B.1 of the CY 2023 OPPS/ASC proposed rule (87 FR
44641 to 44643)). If the estimated per day cost for the drug or
biological is less than or equal to the applicable OPPS drug packaging
threshold, we would package payment for the drug or biological into the
payment for the associated procedure in the upcoming calendar year. If
the estimated per day cost of the drug or biological is greater than
the OPPS drug packaging threshold, we proposed to provide separate
payment at the applicable ASP-based payment amount (which is proposed
at ASP plus 6 percent for CY 2023 and subsequent years), as discussed
further in section V.B.2 of the CY 2023 OPPS/ASC proposed rule (87 FR
44645).
Comment: We received many comments specific to providing additional
quarters of separate payments for drugs and biologicals whose pass-
through payment status will expire between December 31, 2022, and
December 31, 2023.
Response: We refer readers to section IV of this CY 2023 OPPS/ASC
final rule with comment period for a full discussion of the comments
and CMS's final decision not to provide any additional quarters of
separate payment for any drug, biological, or device category whose
pass-through payment status will expire between December 31, 2022, and
December 31, 2023. Refer to Table 57 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 the CY 2023 OPPS/
ASC final rule with comment period (which is available on the CMS
website).
BILLING CODE 4120-01-P
[[Page 71945]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.073
[[Page 71946]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.074
[[Page 71947]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.075
[[Page 71948]]
4. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
Payment Status Expiring in CY 2023
We proposed 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 of the CY 2023 OPPS/
ASC proposed rule (87 FR 44632 through 44636). 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''
(Pass-Through Drugs and Biologicals) in Addenda A and B to the CY 2023
OPPS/ASC proposed rule (which are available on the CMS website).\93\
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 of
the CY 2023 OPPS/ASC proposed rule (87 FR 44632 through 44636).
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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 proposed to continue to pay for
pass-through drugs and biologicals at ASP plus 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 plus 6 percent. Therefore, we proposed 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 plus 6 percent, and the portion of the otherwise applicable OPD
fee schedule that the Secretary determines is appropriate, which is
also proposed at ASP plus 6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure
(including contrast agents, diagnostic radiopharmaceuticals, and stress
agents); and drugs and biologicals that function as supplies when used
in a surgical procedure), we proposed that their pass-through payment
amount would be equal to ASP plus 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 the CY 2023 OPPS/ASC proposed rule (87
FR 44641). We proposed this policy because, if not for the pass-through
payment status of these policy-packaged products, payment for these
products would be packaged into the associated procedure and therefore,
there are associated OPD fee schedule amounts for them.
We proposed 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 proposed 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 proposed to follow the standard ASP
methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which is proposed at ASP plus
6 percent. If ASP data are not available for a radiopharmaceutical, we
proposed to provide pass-through payment at WAC plus 3 percent
(consistent with our proposed policy in section V.B.2.b of the CY 2023
OPPS/ASC proposed rule (87 FR 44637)), the equivalent payment provided
for pass-through drugs and biologicals without ASP information.
Additional detail on the WAC plus 3 percent payment policy can be found
in section V.B.2.b of the CY 2023 OPPS/ASC proposed rule (87 FR 44641).
If WAC information also is not available, we proposed to provide
payment for the pass-through radiopharmaceutical at 95 percent of its
most recent AWP. We refer readers to Table 58 below for the list of
drugs and biologicals with pass-through payment status expiring during
CY 2023.
[[Page 71949]]
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[[Page 71950]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.077
[[Page 71951]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.078
[[Page 71952]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.079
[[Page 71953]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.080
5. Drugs, Biologicals, and Radiopharmaceuticals With Pass-Through
Payment Status Continuing in CY 2023
We proposed to continue pass-through payment status in CY 2023 for
49 drugs and biologicals. These drugs and biologicals, which were
approved for pass-through payment status with effective dates beginning
between April 1, 2021 and October 1, 2022, are listed in Table 59. The
APCs and HCPCS codes for these drugs and biologicals, which have pass-
through payment status that will continue after December 31, 2022, are
assigned status indicator ``G'' in Addenda A and B to the CY 2023 OPPS/
ASC proposed rule (which are available on the CMS website).\94\
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Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through
payment for pass-through drugs and biologicals (the
[[Page 71954]]
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 proposed to
continue to pay for pass-through drugs and biologicals at ASP plus 6
percent, equivalent to the payment rate these drugs and biologicals
would receive in the physician's office setting in CY 2023. We proposed
that a $0 pass-through payment amount would be paid for pass-through
drugs and biologicals that are not policy-packaged as described in
section V.B.1.c under the CY 2023 OPPS because the difference between
the amount authorized under section 1842(o) of the Act, which is
proposed at ASP plus 6 percent, and the portion of the otherwise
applicable OPD fee schedule that the Secretary determines is
appropriate, which is proposed at ASP plus 6 percent, is $0.
In the case of policy-packaged drugs (which include the following:
anesthesia drugs; drugs, biologicals, and radiopharmaceuticals that
function as supplies when used in a diagnostic test or procedure
(including contrast agents, diagnostic radiopharmaceuticals, and stress
agents); and drugs and biologicals that function as supplies when used
in a surgical procedure), we proposed that their pass-through payment
amount would be equal to ASP plus 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 the CY 2023 OPPS/ASC
proposed rule (87 FR 44641). We proposed this policy because, if not
for the pass-through payment status of these policy-packaged products,
payment for these products would be packaged into the associated
procedure and therefore, there are associated OPD fee schedule amounts
for them.
We proposed 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 proposed 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 proposed to follow the standard ASP
methodology to determine the pass-through payment rate that drugs
receive under section 1842(o) of the Act, which is proposed at ASP plus
6 percent. If ASP data are not available for a radiopharmaceutical, we
proposed to provide pass-through payment at WAC plus 3 percent
(consistent with our proposed policy in section V.B.2.b of the CY 2023
OPPS/ASC proposed rule (87 FR 44645)), the equivalent payment provided
to pass-through drugs and biologicals without ASP information.
Additional detail on the WAC plus 3 percent payment policy can be found
in section V.B.2.b of the CY 2023 OPPS/ASC proposed rule (87 FR 44645).
If WAC information also is not available, we proposed to provide
payment for the pass-through radiopharmaceutical at 95 percent of its
most recent AWP.
The drugs and biologicals that we proposed to have pass-through
payment status expire after December 31, 2023, are shown in Table 59.
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6. Provisions for Reducing Transitional Pass-Through Payments for
Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals to Offset
Costs Packaged Into APC Groups
Under the regulation at 42 CFR 419.2(b)(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 proposed to continue to
apply the same policy-packaged offset policy to payment for pass-
through diagnostic radiopharmaceuticals, pass-through contrast agents,
pass-through stress agents, and pass-through skin substitutes. The APCs
to which a payment offset may be applicable for
[[Page 71960]]
pass-through diagnostic radiopharmaceuticals, pass-through contrast
agents, pass-through stress agents, and pass-through skin substitutes
are identified in Table 60.
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We proposed to continue to post annually on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Annual-Policy-Files.html a file that contains the
APC offset amounts that will be used for that year for purposes of both
evaluating cost significance for candidate pass-through payment device
categories and drugs and biologicals and establishing any appropriate
APC offset amounts. Specifically, the file will continue to provide the
amounts and percentages of APC payment associated with packaged
implantable devices, policy-packaged drugs, and threshold packaged
drugs and biologicals for every OPPS clinical APC.
Comment: We received a comment asking CMS to determine offsets to
pass-through payments at the HCPCS level rather than the APC level,
similar to the CMS policy for devices.
Response: We thank the commenter for their suggestion, which we
will take into consideration for future rulemaking.
Comment: One commenter requested that CMS release a copy of the APC
offset file with future OPPS/ASC proposed rules to enable the public to
calculate the percentage of APC payment associated with packaged drug
costs using APC offset data for the upcoming calendar year.
Response: We thank the commenter for their suggestion, but at this
time we disagree that it is necessary to release a copy of the APC
offset file with the proposed OPPS/ASC proposed rule. After
consideration of the comments received, we are finalizing our policy as
proposed.
B. OPPS Payment for Drugs, Biologicals, and Radiopharmaceuticals
Without Pass-Through Payment Status
1. Criteria for Packaging Payment for Drugs, Biologicals, and
Radiopharmaceuticals
a. Packaging Threshold
In accordance with section 1833(t)(16)(B) of the Act, the threshold
for establishing separate APCs for payment of drugs and biologicals was
set to $50 per administration during CYs 2005 and 2006. In CY 2007, we
used the four-quarter moving average Producer Price Index (PPI) levels
for Pharmaceutical Preparations (Prescription) to trend the $50
threshold forward from the third quarter of CY 2005 (when the Pub. L.
108-173 mandated threshold became effective) to the third quarter of CY
2007. We then rounded the resulting dollar amount to the nearest $5
increment in order to determine the CY 2007 threshold amount of $55.
Using the same methodology as that used in CY 2007 (which is discussed
in more detail in the CY 2007 OPPS/ASC final rule with comment period
(71 FR 68085 through 68086)), we set the packaging threshold for
establishing separate APCs for drugs and biologicals at $130 for CY
2022 (86 FR 63635 through 63637).
Following the CY 2007 methodology, for the CY 2023 OPPS/ASC
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
proposed a packaging threshold for CY 2023 of $135.
Comment: Generally, commenters did not support the proposal to
increase the drug packaging threshold to $135. One commenter encouraged
CMS to consider rolling back the threshold since the
[[Page 71961]]
increase in the threshold in their view has significantly outpaced the
OPPS update in recent years.
Response: We appreciate the commenters' feedback on the drug
packaging threshold level of $135, but we do not agree with the
suggestion. We reiterate our methodology, which was adopted in the CY
2007 final rule with comment period (71 FR 68085 through 68086), for
the CY 2023 drug packaging threshold calculation using the most current
data available. We remind commenters that the OPPS drug packaging
threshold is updated based on the Producer Price Index (PPI) levels for
Pharmaceutical Preparations (Prescription). We believe this methodology
is the most appropriate as it specifically accounts for increases in
drug pricing relative to the general OPPS update, which is not specific
to drug pricing. The PPI for prescription drugs reflects the inflation
from a national market, which is different from the market for other
health care services. For CY 2023, we calculated the drug packaging
threshold to be $135. After consideration of the public comments, we
are finalizing our proposal without modification to set the drug
packaging threshold for CY 2023 at $135.
b. Packaging of Payment for HCPCS Codes That Describe Certain Drugs,
Certain Biologicals, and Certain Therapeutic Radiopharmaceuticals Under
the Cost Threshold (``Threshold-Packaged Drugs'')
To determine the proposed CY 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 the
CY 2023 OPPS/ASC proposed rule (87 FR 44643), or for the following
policy-packaged items that we proposed 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 plus 6 percent (which is the payment
rate we proposed for separately payable drugs and biologicals) for CY
2023, as discussed in more detail in section V.B.2.b of the CY 2023
OPPS/ASC proposed rule (87 FR 44642)) 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 proposed 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 the CY 2023 OPPS/ASC
proposed rule (which are available via the internet on the CMS website)
because these are the most recent data available for use at the time of
development of the CY 2023 OPPS/ASC 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 proposed 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 the CY 2023 OPPS/ASC proposed rule (which is
available on the CMS website) \95\ for proposed payment in CY 2023.
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Our policy during previous cycles of the OPPS has been to use
updated ASP and claims data to make final determinations of the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals for the OPPS/ASC final rule with comment period.
We note that it is also our policy to make an annual packaging
determination for a HCPCS code only when we develop the OPPS/ASC final
rule with comment period for the update year. Only HCPCS codes that are
identified as separately payable in the final rule with comment period
are subject to quarterly updates. For our calculation of per day costs
of HCPCS codes for drugs and biologicals in the CY 2023 OPPS/ASC
proposed rule, we proposed 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 proposed to use these
data for budget neutrality estimates and impact analyses for the CY
2023 OPPS/ASC proposed rule.
Payment rates for HCPCS codes for separately payable drugs and
biologicals included in Addenda A and B of the final rule with comment
period will be based on ASP data from the second quarter of CY 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 proposed 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 the CY 2023 OPPS/
ASC proposed rule may be different from the same drugs' HCPCS codes'
packaging status determined based on the data used for this final rule
with comment period. Under such circumstances, we proposed to continue
to follow the established policies initially adopted for the CY 2005
OPPS (69 FR 65780) in order to more equitably pay for those drugs whose
costs fluctuate relative to the proposed CY 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,
[[Page 71962]]
consistent with our historical practice, we proposed to apply the
following policies to those HCPCS codes for drugs, biologicals, and
therapeutic radiopharmaceuticals whose relationship to the drug
packaging threshold changes based on the updated drug packaging
threshold and on the final updated data:
HCPCS codes for drugs and biologicals that were paid
separately in CY 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.
We did not receive any public comments on our proposal and,
therefore, we are finalizing our proposal to recalculate the mean unit
cost for items that do not currently have an ASP-based payment rate
from all of the CY 2021 claims data and updated cost report information
available for this CY 2023 final rule with comment period to determine
their final per day cost. We also did not receive any public comments
on our proposal to continue to follow the established policies,
initially adopted for the CY 2005 OPPS (69 FR 65780), when the
packaging status of HCPCS codes for drugs, biologicals, and therapeutic
radiopharmaceuticals in the proposed rule is different from the same
drug's HCPCS code's packaging status determined based on the data used
for the final rule with comment period. For CY 2023, we are finalizing
these two proposals without modification. Please refer to Addendum B to
this final rule with comment period, which is available on the CMS
website,\96\ for information on the packaging status of drugs,
biologicals, and therapeutic radiopharmaceuticals.
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c. Policy-Packaged Drugs, Biologicals, and Radiopharmaceuticals
As mentioned earlier in this section, under the OPPS, we package
several categories of nonpass-through drugs, biologicals, and
radiopharmaceuticals, regardless of the cost of the products. Because
the products are packaged according to the policies in 42 CFR 419.2(b),
we refer to these packaged drugs, biologicals, and radiopharmaceuticals
as ``policy-packaged'' drugs, biologicals, and radiopharmaceuticals.
These policies are either longstanding or based on longstanding
principles and inherent to the OPPS and are as follows:
Anesthesia, certain drugs, biologicals, and other
pharmaceuticals; medical and surgical supplies and equipment; surgical
dressings; and devices used for external reduction of fractures and
dislocations (Sec. 419.2(b)(4));
Intraoperative items and services (Sec. 419.2(b)(14));
Drugs, biologicals, and radiopharmaceuticals that function
as supplies when used in a diagnostic test or procedure (including, but
not limited to, diagnostic radiopharmaceuticals, contrast agents, and
pharmacologic stress agents) (Sec. 419.2(b)(15)); and
Drugs and biologicals that function as supplies when used
in a surgical procedure (including, but not limited to, skin
substitutes and similar products that aid wound healing and implantable
biologicals) (Sec. 419.2(b)(16)).
The policy at Sec. 419.2(b)(16) is broader than that at Sec.
419.2(b)(14). As we stated in the CY 2015 OPPS/ASC final rule with
comment period: ``We consider all items related to the surgical outcome
and provided during the hospital stay in which the surgery is
performed, including postsurgical pain management drugs, to be part of
the surgery for purposes of our drug and biological surgical supply
packaging policy'' (79 FR 66875). The category described by Sec.
419.2(b)(15) is large and includes diagnostic radiopharmaceuticals,
contrast agents, stress agents, and some other products. The category
described by Sec. 419.2(b)(16) includes skin substitutes and some
other products. We believe it is important to reiterate that cost
consideration is not a factor when determining whether an item is a
surgical supply (79 FR 66875).
Comment: Some commenters had general concerns regarding the risk of
CMS packaging polices creating access barriers and incentives for
stinting on care. Specifically, one commenter requested that we develop
a policy to provide separate payment for drugs that are administered at
the time of ophthalmic surgery and have an FDA-approved indication to
treat or prevent postoperative issues.
Response: We thank commenters for their feedback. We continue to
believe in the importance of our packaging policies as an inherent
principle of OPPS and ASC payment policy. In response to the commenter
requesting that we develop a policy to provide separate payment for
drugs that are administered at the time of ophthalmic surgery, a
surgical procedure episode consists of both pre-operative and post-
operative care in addition to the surgical procedure itself. If a drug
used to address a post-operative concern, such as pain management, is
billed together with a surgical procedure, we assume that the pain
management drug was given as a part of the overall surgical procedure.
Because the pain management drug is ancillary to the primary ophthalmic
surgery procedure, it is considered a surgical supply. The pain
management drug is only administered to the patient because the patient
has received ophthalmic surgery, and the drug would not have been
administered to the patient if the patient did not have the surgery. In
the OPPS, we pay one rate for the entire surgical procedure; and
payment for supplies, such as pain management drugs, is packaged into
the payment rate for the surgical procedure. We note exceptions to this
policy in the ASC setting are discussed in section II.A.3.b. (Payment
Policy for Non-Opioid Pain Management Drugs and Biologicals that
Function as Surgical Supplies under the ASC Payment System) of this
final rule with comment period.
Comment: One commenter recommended that CMS continue to apply
radiolabeled product edits to the nuclear medicine procedures to ensure
that all packaged costs are included on nuclear medicine claims in
order to establish appropriate payment rates in the future. The
commenter was concerned that many providers performing nuclear medicine
procedures are not including the cost of diagnostic
radiopharmaceuticals used for the procedures in their claim
submissions. The commenter believes this lack of drug cost reporting
could be causing the cost of nuclear medicine procedures to be
underreported and therefore requested that the radiolabeled product
edits be reinstated.
Response: We appreciate the commenter's feedback; however, we are
[[Page 71963]]
not reinstating the radiolabeled product edits to nuclear medicine
procedures, which required a diagnostic radiopharmaceutical to be
present on the same claim as a nuclear medicine procedure for payment
to be made under the OPPS. As previously discussed in the CY 2020 OPPS/
ASC final rule with comment period (85 FR 86033 through 86034), the
edits were in place between CY 2008 and CY 2014 (78 FR 75033). We
believe the period of time in which the edits were in place was
sufficient for hospitals to gain experience reporting procedures
involving radiolabeled products and to become accustomed to ensuring
that they code and report charges so that their claims fully and
appropriately reflect the costs of those radiolabeled products. As with
all other items and services recognized under the OPPS, we expect
hospitals to code and report their costs appropriately, regardless of
whether there are claims processing edits in place.
Comment: Several commenters had concerns regarding the CMS policy
to package diagnostic radiopharmaceuticals. These commenters believed
radiopharmaceuticals are not supplies but instead are essential
elements in driving the procedures themselves. Commenters believe that
for newer, more innovative radiopharmaceuticals, packaging could lead
to a lack of patient access to the technology after pass-through
payment expires, especially if there is no clinical alternative.
Commenters also discussed HR 4479/S. 2609 the ``Facilitating Innovative
Nuclear Diagnostics Act (FIND Act) of 2021'' introduced in the U.S.
House of Representatives, which would mandate that CMS make separate
payment for precision diagnostic radiopharmaceuticals receiving FDA
approval after 2008 that have an estimated mean per day product cost of
at least $500.
Several commenters requested that diagnostic radiopharmaceuticals
be paid separately in all cases, not just when the drugs have pass-
through payment status. Some commenters mentioned that pass-through
payment status helps the diffusion of new diagnostic
radiopharmaceuticals into the market, but it is not enough to make up
for what the commenters believe is inadequate payment after pass-
through status expires. Commenters opposed incorporating the cost of
the drug into the associated APC and provided evidence showing
procedures in which diagnostic radiopharmaceuticals are considered to
be a surgical supply, which the commenter believed are often paid at a
lower rate than the payment rate for the diagnostic radiopharmaceutical
itself when the drug had pass-through payment status. Additionally,
commenters proposed alternative payment methodologies, such as
subjecting diagnostic radiopharmaceuticals to the drug packaging
threshold; creating separate APC payments for diagnostic
radiopharmaceuticals that cost more than $500; and using ASP, WAC, AWP,
mean unit cost data, or various other payment methodologies to account
for packaged radiopharmaceutical costs, including making sure
diagnostic radiopharmaceuticals and their associated nuclear medicine
APCs do not violate the ``two-times rule.'' Commenters suggested not
consolidating the Nuclear Medicine APCs. Other commenters suggested
creating new Nuclear Medicine APCs in order to pay adequately for
higher cost diagnostic radiopharmaceuticals.
Commenters were also concerned that by providing packaged payment
for precision diagnostic radiopharmaceuticals in the outpatient
setting, CMS is creating barriers for safety net hospitals serving a
high proportion of Medicare beneficiaries and hospitals serving
underserved communities. Commenters specified certain populations, such
as those with Alzheimer's Disease, depend on the use of diagnostic
radiopharmaceuticals. Commenters discussed difficulties enrolling
hospitals in clinical studies to further research diagnostic
radiopharmaceuticals due to CMS packaging policies. Commenters also
suggested paying separately specifically for radiopharmaceuticals that
are used for Alzheimer's Disease.
Response: We thank commenters for their suggestions. Commenters
have made many of these suggestions in the past, and we addressed them
in previous rules, including the CY 2020 OPPS/ASC final rule (84 FR
61314 through 61315) and the CY 2021 OPPS/ASC final rule (85 FR 86034).
We continue to believe that diagnostic radiopharmaceuticals are an
integral component of many nuclear medicine and imaging procedures and
charges associated with them should be reported on hospital claims to
the extent they are used. Accordingly, the payment for the
radiopharmaceuticals should be reflected within the payment for the
primary procedure. We note that rates are established in a manner that
uses the geometric mean of reported costs to furnish the procedure
based on data submitted to CMS from all hospitals paid under the OPPS
to set the payment rate for the service. The costs that are calculated
by Medicare reflect the average costs of items and services that are
packaged into a primary procedure and will not necessarily equal the
sum of the cost of the primary procedure and the average sales price of
the specific items and services used in the procedure in each case.
Furthermore, the costs are based on the reported costs submitted to
Medicare by the hospitals and not the list price established by the
manufacturer. Claims data that include the radiopharmaceutical packaged
with the associated procedure reflect the combined cost of the
procedure and the radiopharmaceutical used in the procedure.
Additionally, we do not believe it is appropriate to create a new
packaging threshold specifically for diagnostic radiopharmaceuticals as
such a threshold would not align with our overall packaging policy, and
commenters have submitted only limited data to support a specific
threshold. With respect to the request that we create a new APC for
each radiopharmaceutical product, we do not believe it is appropriate
to create unique APCs for diagnostic radiopharmaceuticals. Diagnostic
radiopharmaceuticals function as supplies during a diagnostic test or
procedure and, following our longstanding packaging policy, these items
are packaged under the OPPS. Packaging supports our goal of making OPPS
payments consistent with those of a prospective payment system, which
packages costs into a single aggregate payment for a service,
encounter, or episode of care. Furthermore, diagnostic
radiopharmaceuticals function as supplies that enable the provision of
an independent service and are not themselves the primary therapeutic
modality. Therefore, we do not believe they warrant separate payment
through creation of a unique APC at this time.
We welcome ongoing dialogue and engagement from stakeholders
regarding suggestions for payment changes for consideration in future
rulemaking.
d. Packaging Determination for HCPCS Codes That Describe the Same Drug
or Biological but Different Dosages
In the CY 2010 OPPS/ASC final rule with comment period (74 FR 60490
through 60491), we finalized a policy to make a single packaging
determination for a drug, rather than an individual HCPCS code, when a
drug has multiple HCPCS codes describing different dosages because we
believe that adopting the standard HCPCS code-specific packaging
determinations for these codes could lead to inappropriate payment
incentives for hospitals to report certain HCPCS codes instead of
[[Page 71964]]
others. We continue to believe that making packaging determinations on
a drug-specific basis eliminates payment incentives for hospitals to
report certain HCPCS codes for drugs and allows hospitals flexibility
in choosing to report all HCPCS codes for different dosages of the same
drug or only the lowest dosage HCPCS code. Therefore, we proposed to
continue our policy to make packaging determinations on a drug-specific
basis, rather than a HCPCS code-specific basis, for those HCPCS codes
that describe the same drug or biological but different dosages in CY
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 plus 6 percent across all of the
HCPCS codes that describe each distinct drug or biological in order to
determine the mean units per day of the drug or biological in terms of
the HCPCS code with the lowest dosage descriptor. The following drugs
did not have pricing information available for the ASP methodology for
the CY 2023 OPPS/ASC proposed rule; and, as is our current policy for
determining the packaging status of other drugs, we used the mean unit
cost available from the CY 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 plus 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 61.
We did not receive any comments on our proposal and we are
finalizing it as proposed.
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2. Payment for Drugs and Biologicals Without Pass-Through Status That
Are Not Packaged
a. Payment for Specified Covered Outpatient Drugs (SCODs) and Other
Separately Payable Drugs and Biologicals
Section 1833(t)(14) of the Act defines certain separately payable
radiopharmaceuticals, drugs, and biologicals and mandates specific
payments for these items. Under section 1833(t)(14)(B)(i) of the Act, a
``specified covered outpatient drug'' (known as a SCOD) is defined as a
covered outpatient drug, as defined in section 1927(k)(2) of the Act,
for which a separate APC has been established and that either is a
radiopharmaceutical agent or is a drug or biological for which payment
was made on a pass-through basis on or before December 31, 2002.
Under section 1833(t)(14)(B)(ii) of the Act, certain drugs and
biologicals are designated as exceptions and are not included in the
definition of SCODs. These exceptions are--
A drug or biological for which payment is first made on or
after January 1, 2003, under the transitional pass-through payment
provision in section 1833(t)(6) of the Act.
A drug or biological for which a temporary HCPCS code has not
been assigned.
During CYs 2004 and 2005, an orphan drug (as designated by the
Secretary).
Section 1833(t)(14)(A)(iii) of the Act requires that payment for
SCODs in CY
[[Page 71966]]
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 plus 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.\97\
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\97\ Medicare Payment Advisory Committee. June 2005 Report to
the Congress. Chapter 6: Payment for pharmacy handling costs in
hospital outpatient departments. Available at: https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/June05_ch6.pdf.
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It has been our policy since CY 2006 to apply the same treatment to
all separately payable drugs and biologicals, which include SCODs, and
drugs and biologicals that are not SCODs. Therefore, we apply the
payment methodology in section 1833(t)(14)(A)(iii) of the Act to SCODs,
as required by statute, but we also apply it to separately payable
drugs and biologicals that are not SCODs, which is a policy
determination rather than a statutory requirement. For CY 2023 and
subsequent years, we proposed to apply section 1833(t)(14)(A)(iii)(II)
of the Act to all separately payable drugs and biologicals, including
SCODs. Although we do not distinguish SCODs in this discussion, we note
that we are required to apply section 1833(t)(14)(A)(iii)(II) of the
Act to SCODs, but we also are applying this provision to other
separately payable drugs and biologicals, consistent with our history
of using the same payment methodology for all separately payable drugs
and biologicals.
For a detailed discussion of our OPPS drug payment policies from CY
2006 to CY 2012, we refer readers to the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68383 through 68385). In the CY 2013 OPPS/
ASC final rule with comment period (77 FR 68386 through 68389), we
first adopted the statutory default policy to pay for separately
payable drugs and biologicals at ASP plus 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 Payment Policy
For CY 2023 and subsequent years, we proposed to continue our
payment policy that has been in effect since CY 2013 to pay for
separately payable drugs and biologicals, with the exception of 340B-
acquired drugs, at ASP plus 6 percent in accordance with section
1833(t)(14)(A)(iii)(II) of the Act (the statutory default). We formally
proposed to pay for separately payable nonpass-through drugs acquired
with a 340B discount at a rate of ASP minus 22.5 percent (as described
in section V.B.6 of this CY 2023 OPPS/ASC final rule with comment
period) but noted that we anticipated paying for 340B drugs at ASP plus
6 percent. 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 proposed to continue to
utilize a 3-percent add-on instead of a 6-percent add-on for drugs that
are paid based on WAC pursuant to our authority under section
1833(t)(14)(A)(iii)(II) of the Act, which provides, in part, that the
amount of payment for a SCOD is the average price of the drug in the
year established under section 1847A of the Act. We also proposed to
apply this provision to non-SCOD separately payable drugs. Because we
proposed to establish the average price for a drug paid based on WAC
under section 1847A of the Act as WAC plus 3 percent instead of WAC
plus 6 percent, we believe it is appropriate to price separately
payable drugs paid based on WAC at the same amount under the OPPS. Our
proposal to pay for drugs and biologicals at WAC plus 3 percent, rather
than WAC plus 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 proposed that the
payment amount for these drugs (in this case, at 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. of this CY 2023 OPPS/
ASC final rule with comment period for a full discussion of our
finalized CY 2023 payment policy for 340B drugs.
Consistent with our current policy, we proposed 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
[[Page 71967]]
the Act. We also proposed that the budget neutral weight scalar would
not be applied in determining payments for these separately payable
drugs and biologicals.
We note that separately payable drug and biological payment rates
listed in Addenda A and B to the CY 2023 OPPS/ASC proposed rule
(available on the CMS website \98\), which illustrate the proposed CY
2023 payment of ASP plus 6 percent for separately payable nonpass-
through drugs and biologicals and ASP plus 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 the CY 2023 OPPS/ASC 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
the CY 2023 OPPS/ASC 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 the CY 2023 OPPS/ASC proposed rule
(reflecting April 2022 ASP data) that do not have ASP, WAC, or AWP
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 the CY 2023 OPPS/ASC 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 the CY 2023 OPPS/ASC proposed
rule.
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Comment: We received several general comments on Medicare drug
spending and drug spending under the OPPS and ASC. One commenter
provided feedback on the rapidly rising costs of prescription drugs.
Another commenter commented on the need to increase domestic generic
drug manufacturing.
Response: While we note these comments are generally out of scope
for purposes of this OPPS/ASC final rule with comment period, we thank
commenters for their interest and feedback.
Comment: A few commenters supported separate payment for specific
drugs, biologicals, and radiopharmaceuticals for CY 2023. Commenters
also supported CMS paying for all separately payable drugs and
biologicals as SCODs. Several commenters expressed their approval for
our proposal to pay for separately payable drugs and biologicals at ASP
plus 6 percent. The commenters generally believed this policy is
consistent with statute and Congressional intent and generates more
predictable payment for providers than previous payment methodologies
for drugs and biologicals. A few of these commenters believed the ASP
plus 6 percent payment policy ensures equivalent payment for drugs and
biologicals between the outpatient hospital setting and the physician
office, which, in their view, encourages Medicare beneficiaries to
receive care in the most clinically appropriate setting.
Response: We appreciate the commenters' feedback and support.
Comment: One commenter requested that an add-on percentage of
greater than 6 percent of ASP be paid for separately payable
radiopharmaceuticals to reflect higher overhead and handling costs for
these products.
Response: The add-on percentage of 6 percent is generally viewed as
reflecting the overhead and handling cost of most drugs,
radiopharmaceuticals, and biologicals that are separately payable in
the OPPS even though the overhead and handling costs for individual
products may be higher or lower than 6 percent of the ASP. We believe
that the add-on percentage of 6 percent is appropriate for separately
payable radiopharmaceuticals.
Comment: Several commenters requested that we maintain the status
indicator assignment for HCPCS code Q2041 of ``K'' (Nonpass-Through
Drugs and Nonimplantable Biologicals, Including Therapeutic
Radiopharmaceuticals), rather than assigning it a status indicator of
``N'' (Items and Services Packaged into APC Rates) as shown in the
proposed rule addenda.
Response: We agree with commenters and thank them for their
comments on this discrepancy. HCPCS code Q2041 will be assigned to a
status indicator of ``K'' for CY 2023 as shown in the addenda to this
final rule with comment period on the CMS website.\99\
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Comment: One commenter provided information regarding their drug
Sinuva, described by HCPCS code J7402. This commenter believed their
drug should be assigned to status indicator ``K'' upon pass-through
expiration. This commenter explained that their drug does not fit into
the category of drugs and biologicals that function as supplies when
used in a surgical procedure.
Response: We thank this commenter for this information regarding
their product. We refer readers to section V.A. of this final rule with
comment period for details regarding pass-through expiration of their
product. Upon pass-through expiration, we will publish updated status
indicator assignments through the regular quarterly releases, which can
be found on the CMS website.\100\
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Comment: Commenters requested that we exclude radiopharmaceuticals
from our proposed policy that during an initial sales period in which
data on the prices for sales of the drug or biological are not
sufficiently available from the manufacturer, payments can be made for
drugs using WAC pricing plus a 3 percent price add-on. The commenters
believe the cost of preparing radiopharmaceuticals is higher than the
cost of preparing other drugs and biologicals and a 6 percent price
add-on should be required anytime that we use WAC to price a
radiopharmaceutical.
Response: The WAC of a drug or biological is defined in section
1847A(c)(6)(B) of the Act as the manufacturer's list price for the drug
or biological to wholesalers or direct purchasers in the United States,
not including prompt pay or other discounts, rebates or reductions in
price, for the most recent month for which the information is
available, as reported in wholesale price guides or other publications
of drug or biological pricing data. Because the WAC does not include
discounts, it typically exceeds ASP, and the use of a WAC-based payment
amount for the same drug
[[Page 71968]]
results in higher dollar payments than the use of an ASP-based payment
amount. Also, MedPAC in their June 2017 Report to the Congress (https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/reports/jun17_reporttocongress_sec.pdf) suggested that
greater parity between ASP-based acquisition costs and WAC-based
payments for Part B drugs could be achieved and recommended changing
the 6 percent add-on for WAC-based payments to 3 percent. Given this
evidence that WAC pricing tends to overestimate drug cost, we believe
our current and proposed policy to pay drugs at WAC plus 3 percent for
all drugs, biologicals, and radiopharmaceuticals when ASP is not
available more accurately reflects the cost of new products recently
entering the market than does WAC plus 6 percent.
After considering the public comments we received, we are
finalizing our proposals related to payment for SCODs and other
separately payable drugs and biologicals without modification.
c. Biosimilar Biological Products
For CY 2016 and CY 2017, we finalized a policy to pay for
biosimilar biological products based on the payment allowance of the
product as determined under section 1847A of the 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 payment for 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 proposed to continue our
policy to make all biosimilar biological products eligible for pass-
through payment and not just the first biosimilar biological product
for a reference product. We also formally proposed to continue our
current policy of paying for nonpass-through biosimilars acquired under
the 340B program at the biosimilar's ASP minus 22.5 percent of the
biosimilar's ASP instead of the biosimilar's ASP minus 22.5 percent of
the reference product's ASP, in accordance with section
1833(t)(14)(A)(iii)(II) of the Act. We refer readers to section V.B.6.
of the CY 2023 OPPS/ASC proposed rule (87 FR 63644) for a full
discussion of our proposed CY 2023 payment policy for 340B drugs.
Comment: Commenters supported our proposal to continue our policy
from CY 2018 to make biosimilar biological products eligible for pass-
through payment and not just the first biosimilar biological product
for a reference product.
Response: We appreciate the support of this established policy.
Comment: Commenters expressed general concerns regarding payment
for pass-through biosimilars acquired by 340B entities and the impact
on those biosimilars' competitors that are not on pass-through and are
also acquired by 340B entities. Many acknowledged the proposed changes
to the 340B payment under the OPPS in the proposed rule may no longer
make this a concern; however, these commenters also expressed concerns
regarding CMS's ability to change 340B payment rates in the future and
were concerned this may not create an even playing field for
biosimilars on pass-through status and their reference biological
products not on pass-through when acquired through the 340B program.
These commenters believe that pass-through biosimilars have a
substantial payment differential as compared to the innovator reference
products and biosimilar biological products without pass-through status
when purchased under the 340B program. Specifically, one commenter did
not support our proposal to continue our CY 2018 policy to make all
biosimilar biological products eligible for pass-through payment and
not just the first biosimilar biological product for a reference
product. The commenter believes that there should be a ``level playing
field'' between biosimilars and their reference products in order to
increase competition and reduce costs for beneficiaries. The commenter
does not believe it is fair for biosimilars of a reference product to
be receiving pass-through payment of ASP plus 6 percent of the
reference product's ASP. The commenter believes that this difference in
the payment rates for biosimilars and their reference products could
potentially lead to increased Medicare spending on biosimilars as
providers utilize biosimilars instead of the biosimilars' reference
products because of the higher payment rates for biosimilars in these
circumstances. The commenter believes use of biosimilars is
inappropriately incentivized and that these products should not be
eligible for pass-through status.
Response: As discussed in the CY 2019 OPPS/ASC final rule with
comment period (83 FR 58977), we continue to believe that eligibility
for pass-through payment status reflects the unique, complex nature of
biosimilars and is important as biosimilars become established in the
market, just as it is for all other new drugs and biologicals. We note,
for CY 2023, we are finalizing a policy to pay for biosimilars acquired
under the 340B Program at the rate in which non 340B acquired
biosimilars are paid, which is generally the biosimilar's ASP plus 6
percent of the reference biological product's ASP, subject to section
d. (Increased Payment for Biosimilars in the Inflation Reduction Act of
2022) below. Our final policy regarding the payment rate for drugs and
biologicals that are acquired under the 340B program is described in
section V.B.6 of this final rule with comment period.
After consideration of the public comments we received, we are
finalizing our proposed payment policy for biosimilar products, without
modification, to continue the policy established in CY 2018 to make all
biosimilar biological products eligible for pass-through payment and
not just the first biosimilar biological product
[[Page 71969]]
for a reference product. We are continuing our policy to pay for all
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 packaging
policies as described through section V.B. of this final rule with
comment period.
d. Increased Payment for Biosimilars in the Inflation Reduction Act of
2022
On August 16th, 2022, the Inflation Reduction Act of 2022 (IRA)
(Pub. L. 117-169) was signed into law. Section 1847A(b)(8) of the Act,
as amended by section 11403 of the IRA, requires a temporary increase
in the add-on payment for qualifying biosimilar biological products
from 6 percent to 8 percent of the ASP of the reference biological
beginning October 1, 2022. This increase applies for a 5-year period as
required by section 1847A(b)(8)(B). A qualifying biosimilar biological
product is defined as a biosimilar with an ASP that is not more than
the ASP of the reference biological. For qualifying biosimilar
biological products for which payment was made using ASP as of
September 30, 2022, the 5-year period begins on October 1, 2022. For
qualifying biosimilar biological products for which payment is first
made using ASP between October 1, 2022, through December 31, 2027, the
5-year period begins on the first day of the calendar quarter during
which such payment is first made.
Because we generally base OPPS and ASC payments for biosimilar
biological products on the methodology described in section 1847A(b)(8)
of the Act (80 FR 70444 through 70446), payments for qualifying
biosimilars, as defined at section 1847A(b)(8)(B)(iii) of the Act, will
temporarily increase. Therefore, beginning October 1, 2022, payment for
qualifying nonpass-through biosimilars under the OPPS and ASC payment
systems generally changed from ASP plus 6 percent of the reference
biological product's ASP, to ASP plus 8 percent of the reference
biological product's ASP for a 5-year period. Similarly, payment for
qualifying pass-through biosimilars under the OPPS and ASC payment
systems generally changed from ASP plus 6 percent of the reference
biological product's ASP to ASP plus 8 percent of the reference
biological product's ASP for a 5-year period. For existing qualifying
biosimilars for which payment was made using ASP as of September 30,
2022, the 5-year period began on October 1, 2022. For new qualifying
biosimilars for which payment is first made using ASP between October
1, 2022, and December 31, 2027, the applicable 5-year period begins on
the first day of the calendar quarter during which such payment is
made. We note, additional details on the implementation of the IRA are
forthcoming and will be communicated through a vehicle other than this
CY 2023 OPPS/ASC final rule with comment period.
3. Payment Policy for Therapeutic Radiopharmaceuticals
For CY 2023 and subsequent years, we proposed to continue the
payment policy for therapeutic radiopharmaceuticals that began in CY
2010. We pay for separately payable therapeutic radiopharmaceuticals
under the ASP methodology adopted for separately payable drugs and
biologicals. If ASP information is unavailable for a therapeutic
radiopharmaceutical, we base therapeutic radiopharmaceutical payment on
mean unit cost data derived from hospital claims. We believe that the
rationale outlined in the CY 2010 OPPS/ASC final rule with comment
period (74 FR 60524 through 60525) for applying the principles of
separately payable drug pricing to therapeutic radiopharmaceuticals
continues to be appropriate for nonpass-through, separately payable
therapeutic radiopharmaceuticals in CY 2023. Therefore, we proposed,
for CY 2023 and subsequent years, to pay all nonpass-through,
separately payable therapeutic radiopharmaceuticals at ASP plus 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 proposed 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 the CY 2023 OPPS/ASC proposed rule (which are available on the CMS
website).\101\
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Comment: Commenters supported the continuation of this policy to
provide a predicable payment methodology and avoid the payment swings
that occurred prior to adoption of the statutory default rate for
therapeutic radiopharmaceuticals.
Response: We thank commenters for their support and feedback on
this policy.
Comment: One commenter suggested CMS investigate HCPCS code A9699.
This commenter stated that this code was packaged and no separate APC
payment was made. This commenter suggested that CMS revise the status
indicator of this drug to a status indicator of ``K'' in order to allow
this code to be separately payable as they believed not doing so may
impede beneficiary access to new therapeutic radiopharmaceuticals that
may be billed with this code.
Response: We thank this commenter for their recommendation to
assign HCPCS code A9699 (Radiopharmaceutical, therapeutic, not
otherwise classified) a status indicator of ``K.'' We note that this
code is assigned an OPPS status indicator of ``N'' for CY 2023, which
is a longstanding status indicator assignment under the OPPS.
After consideration of the public comments we received, we are
finalizing our proposal, without modification, to continue to pay all
nonpass-through, separately payable therapeutic radiopharmaceuticals at
ASP plus 6 percent. We are also finalizing our proposal to continue 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. The CY 2023
final payment rates for nonpass-through, separately payable therapeutic
radiopharmaceuticals are included in Addenda A and B to this final rule
with comment period (which are available on the CMS website).
4. 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
[[Page 71970]]
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 plus 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 proposed to pay for blood
clotting factors at ASP plus 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: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Part-B-Drugs/McrPartBDrugAvgSalesPrice/index.html.
We proposed to provide payment for blood clotting factors under the
same methodology as other separately payable drugs and biologicals
under the OPPS and to continue payment of an updated furnishing fee. We
will announce the actual figure of the percent change in the applicable
CPI and the updated furnishing fee calculation based on that figure
through the applicable program instructions and posting on the CMS
website.
Comment: One commenter supported our proposal to continue to pay
for blood clotting factors at ASP plus 6 percent plus a furnishing fee
for the clotting factors updated annually using the CPI. The commenter
also supported our policy to pay the same clotting factor furnishing
fee across different care settings.
Response: We appreciate the commenter's support for our policies.
After reviewing the public comment that we received, we are
finalizing our proposal, without modification, to provide payment for
blood clotting factors under the same methodology as other separately
payable drugs and biologicals under the OPPS and to continue payment of
an updated furnishing fee. We will announce the actual figure of the
percent change in the applicable CPI and the updated furnishing fee
calculation based on that figure through the applicable program
instructions and posting on the CMS website.
5. Payment for Nonpass-Through Drugs, Biologicals, and
Radiopharmaceuticals With HCPCS Codes But Without OPPS Hospital Claims
Data
For CY 2023 and subsequent years, we proposed 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 the CY 2023 OPPS/ASC proposed rule,
which is available on the CMS website.\102\
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\102\ https://www.cms.gov/medicare/medicare-fee-for-service-
payment/hospitaloutpatientpps.
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We did not receive any specific public comments regarding our
proposed payment for non-pass-through drugs, biologicals, and
radiopharmaceuticals with HCPCS codes but without OPPS hospital claims
data; however, many commenters did support paying for separately
payable drugs under the statutory default. Therefore, we are finalizing
our CY 2023 proposal without modification, including our proposal to
assign drug or biological products status indicator ``K'' and pay for
them separately for the remainder of CY 2023 if pricing information
becomes available. The 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
final rule with comment period, which is available 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
plus 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 \103\ and MedPAC \104\ that 340B
hospitals were acquiring drugs at a significant discount under HRSA's
340B Drug Pricing Program. We direct readers to the CY 2018 OPPS/ASC
final rule with comment period for a more detailed discussion of the
340B drug payment policy (82 FR 52493 to 52511).
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\103\ Government Accountability Office. ``Medicare Part B Drugs:
``Action Needed to Reduce Financial Incentives to Prescribe 340B
Drugs at Participating Hospitals.'' June 2015. Available at https://www.gao.gov/assets/gao-15-442.pdf.
\104\ Medicare Payment Advisory Commission. March 2016 Report to
the Congress: Medicare Payment Policy. March 2016. Available at
Medicare Payment Advisory Commission. March 2016 Report to the
Congress: Medicare Payment Policy. March 2016. Available at https://www.medpac.gov/document/http-www-medpac-gov-docs-default-source-reports-may-2015-report-to-the-congress-overview-of-the-340b-drug-pricing-program-pdf/.
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This policy has been the subject of significant litigation,
including the Supreme Court's recent decision in American Hospital
Association v. Becerra, 142 S. Ct. 1896 (2022). Originally, in December
2018, the United States District Court for the District of Columbia
(the ``District Court'') concluded that the Secretary lacked the
authority to adjust the default rate to bring it more 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
[[Page 71971]]
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. Plaintiffs then petitioned the United States
Supreme Court for a writ of certiorari, which was granted on July 2,
2021.\105\
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\105\ https://www.supremecourt.gov/orders/courtorders/070221zor_4gc5.pdf.
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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) without having conducted a survey of hospitals'
acquisition costs under subparagraph (t)(14)(A)(iii)(I). While the
Supreme Court's decision addressed payment rates for CYs 2018 and 2019,
it has implications for CY 2023 payment rates. However, given the
timing of the Supreme Court's decision, we lacked the necessary time to
fully incorporate the adjustments to the proposed payment rates and
budget neutrality calculations to account for that decision before
issuing the CY 2023 OPPS/ASC proposed rule, as explained further below.
For that reason, the payment rates, tables, and addenda in the CY 2023
OPPS/ASC proposed rule reflected 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. We also provided 340B
alternate supporting files, which provide information regarding the
payment effects to non-drug services from removing the 340B program
payment policy and restoring drug payment to the default rate,
generally ASP plus 6 percent, for CY 2023. We stated that we
anticipated applying the default rate--generally ASP plus 6 percent--to
such drugs and biologicals in the final rule for CY 2023, in light of
the Supreme Court's recent decision. We noted we were still evaluating
how to apply the Supreme Court's recent decision to prior calendar
years 2018 through 2022.
Each year since 2018, we have continued the policy of paying for
drugs and biologicals acquired through the 340B Program at ASP minus
22.5 percent. When we were developing the CY 2023 OPPS/ASC proposed
rule, we intended to propose to continue our 340B policy based on the
D.C. Circuit Court of Appeals' then-governing decision. That is, the
rates that we previously developed, the tables, and the addenda that
are part of the CY 2023 OPPS/ASC proposed rule built on the policy that
had been in effect since 2018, which paid for drugs and biologicals at
one rate if they were acquired through the 340B program (generally ASP
minus 22.5 percent), and at another rate if they were not acquired
through the 340B program (generally ASP plus 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
subparagraph 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. In addition, section
1833(t)(14)(H) separately provides that ``[a]dditional expenditures
resulting from this paragraph . . . shall be taken into account'' in
establishing the conversion, weighting, and other adjustment factors
for any calendar year after 2005.
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. As we explained in the proposed rule, 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 had changed the policy and accompanying
rates in response to the Supreme Court's decision, the proposed rule
would have been substantially delayed, which would have jeopardized our
ability to develop this 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 the CY 2023
OPPS/ASC 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. We noted that
if interested parties or members of the public wished 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 would
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 anticipated
reverting to our prior policy of paying the default rate, generally ASP
plus 6 percent, regardless of whether a drug was acquired through the
340B program. We advised readers that a reversion to that policy would
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 plus 6 percent in CY 2023, we explained that 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 rate-setting, which
represent all drug lines for which the 340B program payment policy
applied, we estimated the 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 indicated that 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 was 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
[[Page 71972]]
increased the conversion factor to budget neutralize the decreased
spending for drugs acquired through the 340B program in CY 2018. In the
CY 2018 proposed rule (87 FR 44648), we explained that 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 plus 6 percent. We
noted 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 for all hospitals of removing the
payment differential for 340B drugs and the corresponding budget
neutrality adjustment for CY 2023 was 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 v. Azar, 348 F. Supp. 3d 62 (D.D.C.), 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. See
Am. Hospital Ass'n v. Azar, No. 18-2084 (RC), 2019 WL 3037306. 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. See Am. Hospital Ass'n v. Azar, 967 F.3d 818. 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 this year 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.
After the CY 2020 OPPS/ASC proposed rule was issued, we announced in
the Federal Register (84 FR 51590) our intent to conduct a 340B
hospital survey to collect drug acquisition cost data for certain
quarters in CY 2018 and 2019. We stated that such survey data may be
used in setting the Medicare payment amount for drugs acquired by 340B
hospitals for 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. 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 our original interpretation of the statute
to adjust ASP by minus 22.5 percent was reasonable.
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 decision
to calendar years 2018 through 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.'' Am. Hospital Ass'n, 142 S. Ct. at 1903. We solicited public
comments on the best way to craft any proposed, potential remedies
affecting calendar years 2018 through 2022.
The Supreme Court remanded its decision to the D.C. Circuit, which
in turn remanded it to the United States District Court for the
District of Columbia. Upon the case's remand to the district court, the
plaintiffs filed two motions seeking (1) to vacate the portion of the
340B reimbursement rate in the CY 2022 final OPPS rule that is still in
effect for the remainder of 2022; and (2) to remedy the reduced payment
amounts to 340B hospitals under the reimbursement rates in the final
OPPS rules for CYs 2018-2022.
After the publication of the proposed CY 2023 OPPS rule, on
September 28, 2022, the district court ruled on the first motion,
vacating the 340B reimbursement rate for the remainder of 2022. The
agency has since taken the necessary steps to implement that September
28, 2022, decision, which the court clarified was a final
judgment.\106\ The court also indicated in its decision on the first
motion that it would issue a separate opinion resolving the second
motion at a later time.
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\106\ Vacating Differential Payment Rate for 340B-Acquired Drugs
in 2022 Outpatient Prospective Payment System Final Rule with
Comment Period. https://www.cms.gov/medicare/medicare-fee-for-
service-payment/hospitaloutpatientpps.
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We received the following public comments in response to our
comment solicitation on potential remedies affecting calendar years
2018 through 2022.
Comment: A majority of commenters requested that we promptly pay
hospitals the additional amounts owed for 340B drug payments from 2018
to 2022 as a result of the 340B policy no longer applying. Some
commenters additionally requested that we include interest in these
payments. A majority of commenters also requested that we not seek
recoupment of funds received (which they characterize as holding
hospitals harmless) for the increased rates for non-drug services from
2018 through 2022, arguing that budget neutrality can be applied only
prospectively and that there is no precedent for a retrospective budget
neutrality adjustment. These commenters also argued that a
retrospective payment adjustment would be unfair given the significant
financial impact it would have on hospitals and that it would be
penalizing hospitals for a policy that has been deemed unlawful by the
Supreme Court. These commenters also pointed
[[Page 71973]]
to the logistical and administrative burdens that retroactive payment
adjustment would impose on hospitals and contended that hospitals have
spent most of the overpaid funds during the PHE.
MedPAC and a few other commenters stated that any changes in
response to the Supreme Court's decision should be made in a budget-
neutral manner to ensure consistency with the OPPS statute and CMS's
longstanding budget neutral policy and because, given scarce fiscal
resources, it would be fiscally imprudent to increase Medicare spending
by approximately $2 billion in each year that CMS applied the
overturned 340B policy (CY 2018 through CY 2022) without making a
corresponding budget neutrality adjustment.
Many commenters suggested that if CMS determines that it must
address payments from 2018 through 2022 in a budget neutral manner, CMS
should engage in a more fulsome notice-and-comment rulemaking process
with opportunities for public comment regarding how it will carry out
any policy changes. Several commenters suggested a budget neutral,
prospective-only solution to address payments from 2018 through 2022.
One commenter suggested that CMS defer adoption of a 340B-related
budget neutrality adjustment for 2023 and instead issue a request for
information to solicit comments on how to address the policy
implications of the 340B policy reversal for all relevant years (2018
through 2022) and all impacted providers. One commenter emphasized that
whatever methodology CMS adopts, it should not involve the reprocessing
of claims in order to avoid any impact on patient coinsurance. Several
commenters urged CMS to ensure that the methodology used to remedy the
reduced payment amounts between 2018 and 2022 does not inadvertently
impact non-340B eligible providers, including Ambulatory Surgical
Centers.
Several commenters requested that the 340B payment rates for CY
2022 be immediately updated to reflect ASP plus 6 percent given that
the payment rate of ASP minus 22.5 percent was found to be unlawful.
One commenter suggested that CMS develop and implement a simple
attestation process for each year of reduced payment amounts pursuant
to our policy in effect at the time. Another commenter suggested that
CMS state clearly in the final rule that hospitals may forego
collecting these payments from beneficiaries or insurance companies for
the increased rate.
Response: We thank commenters for their many thoughtful comments
and will take their input into account as we formulate an appropriate
remedy to address reduced payment amounts to 340B hospitals for CYs
2018 through 2022. We agree with commenters who suggested that we
should give stakeholders an opportunity to comment on a proposed
remedy, but do not believe we need to delay the process by first
issuing a separate request for information. We also acknowledge the
motion pending before the district court with respect to this issue. In
order to balance our ability to give the remedy the type of
deliberation encouraged by the Medicare statute and Administrative
Procedure Act, stakeholders' ability to comment, and their interest in
a timely remedy, we plan to issue a separate proposed rule detailing
our proposed remedy for CYs 2018 to CY 2022 in advance of the CY 2024
OPPS/ASC proposed rule. As we previously announced, claims for 340B-
acquired drugs paid after the district court's September 28, 2022
ruling are paid at the default rate (generally ASP plus 6
percent).\107\
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\107\ See https://www.cms.gov/outreach-and-educationoutreachffsprovpartprogprovider-partnership-email-archive/2022-10-13-mlnc#_Toc116466499.
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c. CY 2023 340B Drug Payment Policy
As discussed above, given when the Supreme Court's decision in
American Hospital Association v. Becerra was issued during our annual
rulemaking process, we lacked the necessary time to account for that
decision before issuing the CY 2023 OPPS/ASC proposed rule. For that
reason, for CY 2023, we formally proposed to continue the 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 explained
that we fully anticipated adopting a policy of paying ASP plus 6
percent for 340B-acquired drugs and biologicals in this final rule with
comment period. This formal proposal was in accordance with the policy
choices and calculations that CMS made in the months leading up to
publication of the CY 2023 OPPS/ASC proposed rule before the Supreme
Court issued its decision in American Hospital Association. We
proposed, in accordance with section 1833(t)(14)(A)(iii)(II) of the
Act, to pay for separately payable Medicare Part B drugs and
biologicals (assigned status indicator ``K''), other than vaccines and
drugs on pass-through status, that are acquired through the 340B
Program at ASP minus 22.5 percent when billed by a hospital paid under
the OPPS that is not excepted from the payment adjustment. We formally
proposed to continue our current policy for calculating payment for
340B-acquired biosimilars, which is discussed in section V.B.2.c. of
the CY 2019 OPPS/ASC final rule with comment period, and would continue
the policy we finalized in CY 2019 to pay ASP minus 22.5 percent for
340B-acquired drugs and biologicals furnished in nonexcepted off-campus
PBDs paid under the PFS.
We also formally proposed to continue the 340B payment adjustment
for WAC-priced drugs, which is WAC minus 22.5 percent. We proposed that
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
proposed to continue to exempt rural sole community hospitals (as
described under the regulations at Sec. 412.92 and designated as rural
for Medicare purposes), children's hospitals, and PPS-exempt cancer
hospitals from the 340B payment adjustment.
Finally, we formally proposed 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.'' \108\
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\108\ CMS established two Healthcare Common Procedure Coding
System (HCPCS) Level II modifiers to identify 340B-acquired drugs:
Modifier ``JG'' Drug or biological acquired with 340B
drug pricing program discount, reported to trigger the payment
reduction.
Modifier ``TB'' Drug or biological acquired with 340B
drug pricing program discount, reported for informational purposes.
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Again, we noted that, in light of the Supreme Court's decision in
American Hospital Association, we fully anticipated reverting to our
prior policy of paying for drugs at ASP plus 6 percent, regardless of
whether they were acquired through the 340B program for CY 2023. We
also explained that we fully expected that when we reverted to paying
for drugs acquired through the 340B program at ASP plus 6 percent, we
would 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
[[Page 71974]]
methodology for drugs and biologicals purchased under the 340B Program,
we estimated 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.
We welcomed public comments on the budget neutrality adjustment and
stated that they would 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 plus 6 percent we also published the 340B Alternative supporting
files, which included 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.
We received the following public comments on our proposal for CY
2023.
Comment: The vast majority of commenters supported our intention to
revert to our prior policy of paying for drugs at ASP plus 6 percent
for non-pass-through separately payable drugs and biosimilar products
acquired under the 340B program for CY 2023.
Response: We thank these commenters for their comments.
Comment: Some commenters opposed reverting to an ASP plus 6 percent
payment rate and argued for a new drug cost survey to inform the
payment rate for CY 2024. These commenters argued that the ASP plus 6
percent payment rate was excessive and that conducting a new drug cost
survey would ensure that CMS is paying a rate that more closely
approximates the costs incurred by 340B providers.
Response: We thank the commenters for their suggestions regarding
drug cost surveys, we are under no statutory obligation to necessarily
conduct a drug cost survey to inform the payment rate for any given
year. According to the GAO hospitals survey in 2005, surveys be useful
on occasion to validate rate-setting data CMS receives, such as ASP,
but they also create a burden for hospitals and the data collector. For
these reasons, GAO recommended that CMS survey hospitals only
occasionally to validate hospital acquisition costs. Nonetheless, we
will take the commenters' feedback regarding a survey of hospital drug
acquisition costs into consideration for potential future rulemaking.
Comment: One commenter who supported CMS conducting a new drug cost
survey, argued that reverting to the ASP plus 6 percent payment rate
would be arbitrary and capricious under the Administrative Procedure
Act because (1) CMS did not examine relevant data provided in the CY
2021 OPPS proposed rule, which provides evidence for finalizing 340B
payment as ASP minus 28.7 percent; (2) CMS did not articulate a
satisfactory explanation for the policy change to finalize payment at
ASP plus 6 percent; (3) reversion to the ASP plus 6 percent payment
rate is contrary to substantial evidence that 340B hospitals are vastly
overpaid for drugs; and (4) reversion to the ASP plus 6 percent payment
rate is otherwise an unreasonable decision.
Response: Our policy for CY 2023 is consistent with the Supreme
Court's decision in American Hospital Association. Additionally, we are
reverting to our longstanding payment methodology, which is described
in detail throughout section V. (OPPS Payment for Drugs, Biologicals,
and Radiopharmaceuticals) of this final rule. This payment methodology
is consistent with section 1833(t)(14)(A)(iii)(II) of the Act and is
based on many years of notice and comment rulemaking.
Comment: Many commenters opposed our proposal to continue requiring
hospitals to use the ``JG'' and ``TB'' claims modifiers in CY 2023 to
identify drugs acquired with the 340B discount and requested that we
discontinue their use.
Response: We appreciate these commenters' concerns; however, it is
important for us to maintain the 340B modifiers for CY 2023 to allow us
to track the utilization of 340B acquired drugs and biologicals under
the OPPS.
For CY 2023, we are maintaining the requirement for 340B hospitals
to report the ``JG'' and ``TB'' modifiers for informational purposes,
but they will have no effect on payment rates. The presence of modifier
``JG'' on a claim to indicate a drug is acquired under the 340B program
will not trigger a payment reduction and will be used only for
informational purposes. Claims for 340B drugs and biologicals
identified with a ``JG'' modifier will be paid at the same statutory
default rate as non-340B drugs and biologicals. For CY 2023, rural sole
community hospitals, children's hospitals, and PPS-exempt cancer
hospitals should continue to bill the modifier ``TB'' on claim lines
for drugs acquired through the 340B Program. All other 340B providers
should continue to report the modifier ``JG.'' We believe maintaining
both modifiers will reduce provider burden compared to shifting to a
single modifier, as all providers can continue utilizing the modifier
(either ``JG'' or ``TB'') in the same manner as they have been utilized
for the past five calendar years.
For CY 2023, we are finalizing the reversion to a payment rate of,
generally, ASP plus 6 percent as the default payment rate for drugs and
biologicals acquired under the 340B program and will pay for these
drugs and biologicals no differently than we pay for those drugs and
biologicals that are not acquired under the 340B program.
Comment: A few commenters supported CMS's proposal to continue to
require hospitals to use 340B billing modifiers to report separately
payable drugs that were acquired under the 340B program.
Response: We thank commenters for their input and it is important
for us to maintain the 340B modifiers for CY 2023 to allow us to track
the utilization of 340B acquired drugs and biologicals under the OPPS.
For CY 2023, rural SCHs, children's hospitals, and PPS-exempt cancer
hospitals) will report the ``TB'' modifier when a drug is acquired
under the 340B program and paid under the OPPS. For CY 2023, hospitals
reporting the modifier ``JG'' when a drug is acquired under the 340B
program will not trigger a payment reduction. Instead, the modifier
``JG'' is for informational purposes only and will be paid at the
statutory payment rate for drugs and biologicals. Similarly, the ``TB''
modifier will continue to be for informational purpose only and
reported by rural SCHs, children's hospitals, and PPS-exempt cancer
hospitals. Providers shall continue utilizing the modifier (either
``JG'' or ``TB'') in the same manner as they have been utilized for the
past five calendar years.
Comment: Many commenters opposed our intent to budget neutralize
the increased payment for 340B drugs for CY 2023, arguing that the
proposed negative 4.04 percent budget neutrality adjustment to the
conversion factor would cancel out the 2.7 percent fee schedule
increase. One of these commenters requested that we waive the 340B-
related budget neutrality adjustment for 2023 and instead engage with
interested parties in the CY 2024 OPPS/ASC proposed rule to identify
other remedies. Several of these commenters suggested, in the event CMS
deems that an adjustment to the CY 2023 conversion factor is necessary,
that CMS spread the CY 2023 adjustment out over four to five years to
mitigate the single-year impact on hospitals.
[[Page 71975]]
Response: We appreciate the commenters' concerns regarding the
effect of the 340B budget neutrality adjustment for 2023. However,
under sections 1833(t)(9)(B) and (t)(14)(H), adjustments for a year may
not cause the estimated amount of expenditures for that year to
increase or decrease from the estimated amount of expenditures that
would have been made if the adjustments had not been made, and
additional expenditures for drugs and biologicals in years after 2005
must be taken account in establishing the conversion weighting, and
other adjustment factors. Accordingly, the increase in payments for
340B drugs must be accompanied by a corresponding budget neutrality
adjustment in CY 2023. We calculated the proposed budget neutrality
adjustment to conversion factor of 0.9596 using our standard
methodology. However, we acknowledge there are alternative
methodologies to calculate the budget neutrality factor consistent with
the statute and, as discussed further below, agree with the commenters
that such an alternative is more appropriate in these circumstances.
Comment: Many commenters requested that, in the place of the -4.04
percent adjustment to the CY 2023 OPPS conversion factor to maintain
budget neutrality with CY 2022, we instead apply a budget neutrality
adjustment that offsets the 3.19 percent increase we applied to the
conversion factor in CY 2018 to account for the decreased payment for
340B drugs under our policy, which would have the effect of undoing
that policy.
Response: We agree with commenters that under these specific
circumstances it is appropriate to decrease payments for non-drug items
and services by a percentage that would offset the percentage by which
they were increased when CMS implemented the 340B policy in CY 2018.
Accordingly, we are adopting this methodology based on the
consideration of comments received. Our adjustment to the CY 2023 OPPS
conversion factor will be 0.9691 rather than 0.9596, reflecting a
budget neutrality adjustment of -3.09 percent rather than the -4.04
percent we proposed. Reducing the conversion factor by 3.09 percent in
CY 2023 is the reduction that is necessary to fully offset the 3.19
percent increase to the conversion factor we implemented in CY 2018.
The -3.09 percent adjustment is applied by multiplying the conversion
factor by 0.9691 (1/1.0319). This adjustment to the conversion factor
is appropriate in these circumstances, including because it removes the
effect of the 340B policy as originally adopted in CY 2018, which was
recently invalidated by the Supreme Court as explained above, from the
CY 2023 conversion factor and ensures it is equivalent to the
conversion factor that would be in place if the 340B drug payment
policy had never been implemented.
Comment: A commenter believed that the payment for non-drug
services should have increased since 2018 as the 340B expenditure
increased through application of an updated budget neutrality
adjustment. The commenter suggested that CMS could apply a one-time
budget neutrality adjustment for CY 2023 to increase non-drug payments
to account for what commenters believed were underpayments for non-drug
items and services in CY 2020 through CY 2022. In addition, the
commenter recommended CMS apply a net budget neutrality adjustment for
pass-through payments of 1.03 percent in place of the 0.34 budget
neutrality adjustment reflected in the proposed rule due to the CY 2023
payment rate for 340B drugs of ASP plus 6 percent.
Response: We thank the commenter for the recommendation but the
first comment is related to the budget neutrality adjustment from prior
years. We will take it under consideration as we prepare a separate
proposed rule to address the remedy for CY 2018 to 2022. In regards to
the passthrough payment comment, we have updated the passthrough
payment estimate for CY 2023 to account for the change in 340B policy
as discussed in the passthrough payment estimate section of this final
rule.
Comment: Many commenters urged CMS to discard the 2020 drug survey
for future ratesetting because the commenters contend it was not
performed consistent with the statute. Many commenters also encouraged
CMS to undertake, without delay, the survey of drug acquisition costs
required by the Medicare statute and base OPPS payments for 340B
hospitals on that survey starting with CY 2023.
Response: We are not conducting or taking into account the results
of a drug acquisition cost survey for CY 2023. For CY 2023, we are
finalizing our policy to generally pay ASP plus 6 percent for
separately payable drugs and biologicals, regardless of whether they
were acquired through the 340B program
Comment: One commenter requested that when determining its 340B
payment policy for CY 2023, CMS consider the potentially negative
impacts on rural hospitals that continue to struggle financially.
Response: We appreciate this commenter's feedback. We note that
while the original intent of this policy was not to benefit rural
hospitals financially, we recognize that ending this policy means that
payment rates for non-drug items and services will decrease, which will
lead to lower total payments for all hospitals, including non-340B
hospitals or hospitals that were exempt from the 340B payment policy
for which the 340B policy had a positive financial effect. We
appreciate the role rural hospitals play in serving their communities
and understand the financial challenges of rural hospitals. As
discussed previously, since the Supreme Court invalidated the previous
payment rate of ASP minus 22.5 percent for 340B acquired drugs and
biologicals, we must decrease other rates to offset the increase in
340B drug payment. We believe the best interpretation of the statute is
to require budget neutrality across the program.
Comment: Several commenters requested that the ASC payment system
be insulated from any reductions to the OPPS conversion factor for CY
2023.
Response: We note the budget neutrality adjustment does not impact
the ASC conversion factor; however, because the ASC standard
ratesetting methodology adopts OPPS payment rates and the device
portion (or device offset amount), the revised OPPS conversion factor
will have an impact on the ASC payment system. Specifically, because
the device portion for device-intensive procedures is held constant
with the OPPS and is not calculated with the ASC conversion factor, the
revised OPPS conversion factor will lower the device portion for
device-intensive procedures, including the payment rates for device-
intensive procedures under the ASC payment system. However, the decline
in expenditures for device portions under the ASC payment system is
fully offset through the ASC weight scalar, which increases payment for
the non-device portions of all covered surgical procedures and certain
covered ancillary services.
Comment: One commenter expressed concern that the interaction of
the 340B payment reduction with the exemption for pass-through products
has the potential to create a disparity between payment for biosimilars
with pass-through status and their reference products and branded pass-
through and nonpass-through products. The commenter contends that the
disparity created by these combined policies could cause inappropriate
financial incentives for prescribing biosimilars on pass-through status
rather than nonpass-
[[Page 71976]]
through reference products including financial incentives to prescribe
that could conflict inappropriately with clinical guidelines and/or
standards of care.
Response: We note that, by the time this final rule with comment
period is issued, the 340B payment adjustment will no longer be in
effect as we are reverting to our standard payment methodology of
paying a statutory default amount of, in general, ASP plus 6 percent
regardless of whether a drug is acquired under the 340B program.
Comment: One commenter encouraged CMS and HHS to work with HRSA to
improve the integrity of the 340B Drug Pricing Program, such as
clarifying the definition of a ``patient,'' placing greater guardrails
on when contract pharmacies may access the Program's discounts, and
revising the formula for Disproportionate Share Hospital status from
one based on inpatient days to one that is based on outpatient
utilization.
Response: We thank the commenter for this comment and note that
this comment is outside of the scope of this final rule as we did not
make any proposals involving the definition of a ``patient,'' placing
greater guardrails on when contract pharmacies may access the 340B
program's discounts, or revising the formula for Disproportionate Share
Hospital status for CY 2023.
After consideration of the public comments, for CY 2023 we are
reverting to ASP plus 6 percent as the default payment rate for 340B-
acquired drugs and biologicals and will pay for 340B-acquired drugs and
biologicals no differently than we pay for drugs and biologicals that
are not acquired through the 340B program. We are finalizing a budget
neutrality adjustment to the CY 2023 OPPS conversion factor of 0.9691
percent rather than the 0.9596 percent adjustment we used for the
alternative files in the proposed rule. This adjustment offsets the
prior increase of 3.19 percent that was applied to the conversion
factor when we implemented the 340B payment policy in CY 2018 in a
budget neutrality manner.
Effective January 1, 2023, the ``JG'' modifier will be used by
hospitals (except for rural sole community hospitals, children's
hospitals, and PPS-exempt cancer hospitals) to identify 340B drugs for
informational purposes, rather than to trigger a payment adjustment.
For CY 2023, rural sole community hospitals, children's hospitals, and
PPS-exempt cancer hospitals will continue to use the ``TB'' modifier to
identify 340B drugs for informational purposes.
7. High Cost/Low Cost Threshold for Packaged Skin Substitutes
a. Background
In the CY 2014 OPPS/ASC final rule with comment period (78 FR
74938), we unconditionally packaged skin substitute products into their
associated surgical procedures as part of a broader policy to package
all drugs and biologicals that function as supplies when used in a
surgical procedure. As part of the policy to package skin substitutes,
we also finalized a methodology that divides the skin substitutes into
a high cost group and a low cost group, in order to ensure adequate
resource homogeneity among APC assignments for the skin substitute
application procedures (78 FR 74933). 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 (87 FR 2058)
(the final rule correction and corrected Addenda A and B are available
on the CMS website (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices)).
We have continued the high cost/low cost categories policy since CY
2014, and we proposed 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
[[Page 71977]]
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 proposed
to continue to determine the high cost/low cost status for each skin
substitute product based on either a product's geometric MUC exceeding
the geometric MUC threshold or the product's PDC (the total units of a
skin substitute multiplied by the MUC and divided by the total number
of days) exceeding the PDC threshold. Consistent with the methodology
as established in the CY 2014 OPPS/ASC through CY 2018 OPPS/ASC final
rules with comment period, we analyzed CY 2019 claims data to calculate
the MUC threshold (a weighted average of all skin substitutes' MUCs)
and the PDC threshold (a weighted average of all skin substitutes'
PDCs). The proposed CY 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 clarified in the proposed rule that the
availability of a 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. We noted that
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 proposed to assign each skin
substitute that exceeds either the MUC threshold or the PDC threshold
to the high cost group. In addition, we proposed to assign any skin
substitute with a MUC or a PDC that does not exceed either the MUC
threshold or the PDC threshold to the low cost group except that we
proposed 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 proposed to continue to assign skin substitutes
with pass-through payment status to the high cost category. We proposed
to assign skin substitutes with pricing information but without claims
data to calculate a geometric MUC or PDC to either the high cost or low
cost category based on the product's ASP+6 percent payment rate as
compared to the MUC threshold. If ASP is not available, we proposed to
use WAC+3 percent to assign a product to either the high cost or low
cost category. Finally, if neither ASP nor WAC is available, we
proposed to use 95 percent of AWP to assign a skin substitute to either
the high cost or low cost category. We proposed to continue to use
WAC+3 percent instead of WAC+6 percent to conform to our proposed
policy described in section V.B.2.b of the CY 2023 OPPS/ASC proposed
rule (87 FR 44645 through 44646) 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 (87 FR 46028 through 46029), there
was 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 starting in CY 2024. We explained in the
proposed rule that if this proposed policy is finalized, manufacturers
would not report ASPs for skin substitute products, 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. We explained that having WAC and AWP pricing
would allow us to continue to use our alternative process to assign
graft skin substitute products to the high cost group when claims data
for a product is not available.
Comment: The HOP Panel recommended and several commenters supported
ending the packaging of the graft skin substitute add-on codes (CPT
codes 15272, 15274, 15276, and 15278; HCPCS codes C5272, C5274, C5276,
and C5278). The HOP Panel and the commenters requested that these codes
be assigned to APCs that reflect the estimated costs of these service
codes. Commenters claim that packaging the graft skin substitute add-on
codes eliminates the variation in payment for wound care treatments
based on the size of the wound. They assert that providers are
discouraged from treating wounds between 26 and 99 cm2 and over 100
[[Page 71978]]
cm2 in the outpatient hospital setting because of the financial losses
they experience to provide such care. Commenters believe that packaging
graft skin substitute add-on codes disrupts the methodology of how the
American Medical Association (AMA), the organization that manages CPT
service codes, intended graft skin substitute procedures to be paid.
Response: We do not agree that the recommendation of the HOP Panel
and the commenters is appropriate for paying for graft skin substitutes
under the OPPS. The OPPS is a prospective payment system and not a fee-
for-service payment system. That means that we generally attempt to
make one payment for all of the services billed with the primary
medical procedure, including add-on procedures such as the ones
described by CPT codes 15272, 15274, 15276, and 15278, and HCPCS codes
C5272, C5274, C5276, and C5278.
More specifically, we calculate the OPPS payment rate by first
calculating the geometric mean cost of the procedure. This calculation
includes claims for individual services that used a lower level of
resources and claims for individual services that used a higher level
of resources. The resulting geometric mean cost will reflect the median
service cost for a given medical procedure. Next, we group the medical
procedure with other medical procedures with clinical and resource
similarity in an APC and calculate the geometric mean of these related
procedures to generate a base payment rate for all procedures assigned
to the APC.
A prospective payment system like the OPPS is designed to pay
providers the geometric mean cost of the primary service they provide,
and such a system encourages efficiencies and cost-savings in the
administration of health care. However, a prospective payment system is
not intended to discourage providers from rendering medically necessary
care to patients. For example, it is possible that a provider could
experience a financial loss when they perform a service where a patient
receives 85 cm\2\ of a graft skin substitute product, but that same
provider could see a financial gain when the next patient receives a
skin graft where only 10 cm\2\ of product is used. Paying separately
for add-on codes in a prospective payment system defeats the goals of
such a payment system. If providers are paid at cost or nearly at cost
for each individual service they render, there is no incentive for them
to control costs. Add-on codes should be packaged with the primary
medical service to be able to establish a median payment rate that
gives providers incentives to keep their costs in line with typical
providers throughout the Medicare program. The need for cost
efficiencies in the application of graft skin substitutes to treat
wounds is no different than need for cost efficiencies in other
procedures administered in the outpatient hospital setting. Therefore,
we believe that add-on codes, including the add-on codes for the
administration of graft skin substitutes, should remain packaged to
maintain the integrity of the OPPS.
Comment: The HOP Panel recommended and several commenters supported
ensuring that the payment rate for graft skin substitute procedures be
the same no matter where on the body the graft skin substitute product
is applied to the patient. There are four graft skin substitute
application procedures for high cost skin substitute products (CPT
codes 15271, 15273, 15275, and 15277) and a similar four graft skin
substitute applications for low cost skin substitute products (HCPCS
codes C5272, C5274, C5276, and C5278). The reason there are four
application service codes is that there are different service codes for
applying graft skin substitutes to children and infants as compared to
adults; and there are different service codes for applying graft skin
substitutes to the trunk, arms, and legs as compared to the face,
scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet,
fingers, and toes. Commenters claim that the cost to apply graft skin
substitute products does not depend on the location of the wound
because the same amount of product is used on the wound and the same
clinical resources are used to treat the wound independent of the
location of the wound.
Two other commenters made a similar request, asking that CPT code
15277 (Application of skin substitute graft to face, scalp, eyelids,
mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple
digits, total wound surface area greater than or equal to 100 sq cm;
first 100 sq cm wound surface area, or 1 percent of body area of
infants and children) that is currently assigned to APC 5054 (Level 4
Skin Procedures) be reassigned to APC 5055 (Level 5 Skin Procedures).
That would mean that the two graft skin substitute application
procedures for children for high cost skin substitute products (CPT
code 15273 and 15277) would be in the same APC.
Response: We appreciate commenters' concerns and note that current
codes describing the application of high and low cost graft skin
substitutes for adults (CPT codes 15271 and 15275, and HCPCS codes
C5272 and C5276) have been assigned to the same APC (5054). Because
they are currently included in the same APC, OPPS payment for them is
the same, and this payment policy is consistent with the recommendation
from the HOP Panel and other commenters. We note that the codes
describing the application of high and low cost products for children
and infants on the trunk, arms, and legs (CPT code 15273 or HCPCS code
C5274) have been assigned to a lower-paying APC (APC 5054) than the APC
assignment for the application of high and low cost graft skin
substitute products for children in the face, scalp, eyelids, mouth,
neck, ears, orbits, genitalia, hand, feet, fingers, and toes--CPT code
15277 or HCPCS code C5277, which are assigned to APC 5055. The
differences in costs that have determined APC assignments for these
services for children have been supported by historical cost data. We
also note that none of these service codes are in violation of the 2-
times rule.
Comment: Multiple commenters requested that manufacturers continue
to 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 when claims cost data from the OPPS
for a product are not available. The commenters observed a
contradiction between language in CY 2023 OPPS/ASC proposed rule and
language in the CY 2023 PFS proposed rule. The commenters noted that
the CY 2023 OPPS/ASC proposed rule stated that the CY 2023 PFS proposed
rule would contain 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, and that the proposal
could take effect in CY 2023. These commenters further stated that the
CY 2023 PFS rule stated that we were considering paying for skin
substitute products furnished in the physician office setting as
incident-to supplies. However, the commenters stated that the CY 2023
PFS proposed rule also stated that the earliest such a change would be
proposed would be for CY 2024.
Response: The statement included in the CY 2023 OPPS/ASC proposed
rule was incorrect. We did not propose to pay for skin substitutes as
contractor-priced incident to supplies in the CY 2023 PFS proposed
rule. Instead, we proposed to treat skin substitutes (including
synthetic skin substitutes) as incident to supplies as described under
section 1861(s)(2)(A) of the Act when furnished in non-facility
settings and to
[[Page 71979]]
include the costs of those products as resource inputs in establishing
practice expense RVUs for associated physician's services, effective
January 1, 2024. We also refer interested parties to the CY 2023 PFS
final rule for more information on this proposal and the policy that we
are finalizing for skin substitutes furnished in the physician office
setting. With respect to payment for skin substitutes under the OPPS,
since the ASP data will be available, we can continue to use ASP+6
percent to determine if a skin substitute that does not have OPPS
claims cost data should be assigned to the high cost or low cost skin
substitute group. The ASP+6 percent rate would be used in the same
manner as WAC+3 percent and 95 percent of AWP as proposed in the CY
2023 OPPS/ASC proposed rule.
Comment: One commenter requested that we assign powdered skin
substitute products to the either the high cost skin substitute group
or the low cost skin substitute group as is currently done for graft
skin substitute products. The commenter asserted that ``powder products
have demonstrated the same ability to form a sheet scaffolding for
wound healing as sheet products,'' and ``powdered products generally
consist of a micronized sheet skin substitute broken down into
particulate form.'' The commenter also notes that there are no existing
CPT codes that describe the application of powdered skin substitutes.
Response: The high cost and low cost skin substitute groups contain
four CPT codes (CPT codes 15271, 15273, 15275, 15277) and four HCPCS
codes (HCPCS codes C5271, C5273, C5275, and C5277) that describe the
application of ``skin substitute graft.'' We interpret the term ``skin
substitute graft'' to mean the application of sheet skin substitute
products that would be grafted in the wound area. A powder is not a
graft even if the product forms a sheet scaffolding similar to a skin
substitute product. If a skin substitute product is not a sheet
product, then it is not described by the skin substitute graft
application codes, and the product cannot be assigned to the high cost
or low cost skin substitute groups.
Comment: One commenter asked that we eliminate the high cost and
low cost skin substitute groups for graft skin substitute products.
Instead, the commenter requested that we no longer policy package skin
substitute products in the OPPS. Instead, the commenter suggested we
should pay for graft skin substitutes separate from the application
procedure based on their ASP+6 percent price where available.
Response: A substantial portion of the cost of a skin substitute
graft application procedure is the graft skin substitute product
itself, and the cost of the skin substitute graft products is reflected
in the cost of the overall procedure. Packaging the cost of graft skin
substitute products into the affiliated procedures leads to cost
savings and efficiencies in the use of graft skin substitute products.
Providers have the opportunity to assess the value of products of
varying costs. The payment rates for the application procedures for
graft skin substitute products reflect the decisions of providers all
across the United States between the costs and benefits of all
available products and should limit the use of the highest-cost graft
skin substitute products over lower-cost products unless the highest-
cost products are found to be clinically superior. Packaging of graft
skin substitute products helps to reduce costs for graft skin
substitute procedures and allows more Medicare resources to be used for
other categories of medical services.
Comment: Multiple commenters supported our proposal to continue to
assign skin substitutes to the low cost or high cost group. Commenters
also supported our proposal that any skin substitute product that was
assigned to the high cost group in CY 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.
Response: We appreciate the commenters' support for our proposals.
Comment: One commenter supported our assignment of HCPCS code Q4127
(Talymed, per square centimeter) to the high cost skin substitute
group. However, the commenter would prefer that we use ASP+6 percent,
WAC+3 percent, or 95 percent of AWP to determine if the cost of the
graft skin substitute product exceeds the overall MUC threshold or
overall PDC threshold rather than using the MUC of the individual graft
skin substitute product to compare against the overall MUC threshold or
overall PDC threshold.
Response: We appreciate the support of the commenter regarding the
high cost group assignment for HCPCS Code Q4127. However, we do not
support the request to use ASP+6 percent, WAC+3 percent, or 95 percent
of AWP over an individual graft skin substitute product's MUC to
determine if a product should be assigned to the high cost or low cost
skin substitute group. The MUC of a product based on OPPS claims data
is a better estimate of the cost of a graft skin substitute product for
Medicare as compared to the other pricing measures because the MUC is
based on Medicare payment data and reports the actual costs of the
graft skin substitute product for hospitals.
Comment: One commenter, the manufacturer, requested that we change
the skin substitute group assignment for HCPCS code A2001 (Innovamatrix
ac, per square centimeter) to reflect that the graft skin substitute
product had been assigned to the high cost skin substitute group since
January 1, 2022, and therefore should be assigned to the high cost skin
substitute group for CY 2023.
Response: We will update Table 62 to reflect that HCPCS code A2001
will be assigned to the high cost skin substitute group for CY 2023.
Comment: One commenter, the manufacturer, requested that HCPCS
codes Q4122 (Dermacell, per square centimeter) and Q4150 (Allowrap ds
or dry, per square centimeter) continue to be assigned to the high-cost
skin substitute group.
Response: HCPCS codes Q4122 and Q4150 were both assigned to the
high cost group in CY 2022 and also were proposed to be assigned to the
high-cost group for CY 2023. Any skin substitute assigned to the high
cost group in CY 2022 will continue to be assigned to the high cost
group in CY 2023 even if the MUC and PDC for the skin substitute
product is below the overall MUC and PDC thresholds for all skin
substitute products. Accordingly, we are finalizing our proposal to
assign HCPCS codes Q4122 and Q4150 to the high-cost group in CY 2023.
After consideration of the public comments we received, we are
finalizing our proposals without modification. Specifically, for CY
2023, we are finalizing our proposal to continue to assign skin
substitutes with pass-through payment status to the high cost category.
We are also finalizing our proposal 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 are finalizing our policy 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 will use 95
percent of AWP to assign a skin substitute to either the high cost or
low cost category. New skin substitutes without pricing information
would be assigned to the low cost category until pricing information is
available through pricing compendia to compare to the CY 2023 MUC and
PDC thresholds. Table 62 includes the final CY 2023 cost
[[Page 71980]]
category assignment for each skin substitute product covered by these
policies and by the policies implemented as a result of the retirement
of HCPCS Code C1849.
c. 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
through 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.
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 of that product
provided WAC pricing data that showed the cost of the product was above
the MUC threshold for graft skin substitute products and therefore, 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). 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, in CY 2022 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 (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.
In the CY 2023 OPPS/ASC proposed rule, we noted that starting in
January 2022, all new skin substitute products with an FDA 510(k)
clearance received product-specific A-codes in the HCPCS A2XXX series
(87 FR 44655). We also noted that 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. Nonetheless, 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). Starting in January 2022, skin substitute
products with an 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 because they are not described by HCPCS code C1849, we made all
HCPCS A2XXX series codes payable under the OPPS earlier this year. In
the ``April 2022 Update of the Hospital Outpatient Prospective Payment
System (OPPS)--Change Request 12666'' (https://www.cms.gov/files/document/r11305cp.pdf), effective April 1, 2022, we changed the status
indicator of all skin substitute products described in the HCPCS A2XXX
series to ``N'' (Paid under OPPS; payment is packaged into payment for
other services). This change allowed packaged payment under the OPPS
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 do not have a product-specific HCPCS
code. 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 skin substitute products and for other unclassified
FDA 510(k)-cleared products identified by HCPCS code A4100, we
explained in the CY 2023 OPPS/ASC proposed rule that we believe 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
were 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 that describe the same product: HCPCS code C1849 or the code in
the HCPCS A2XXX series. For these reasons, we believed it was important
to retire HCPCS code C1849.
Nonetheless, we did not want to simply 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
[[Page 71981]]
high cost skin substitute group continued 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 two 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 did 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
also consistent with our proposed policy in section V.B.7.b in the CY
2023 OPPS/ASC proposed rule (87 FR 44650 through 44651) 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 proposed to delete HCPCS code C1849
(Skin substitute, synthetic, resorbable, by per square centimeter). We
also proposed 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 would be assigned to the
high cost skin substitute group. We wanted to ensure these 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 product-
specific A-codes even if cost and pricing data are not available for
these products. We believed 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 the
subsequent year once a product is assigned to the high cost group for a
given year.
We also proposed that HCPCS code A4100 (Skin substitute, fda
cleared as a device, not otherwise specified) would be assigned to the
low cost skin substitute group, which was consistent with our existing
payment policy that unclassified graft skin substitute products be
assigned to the low cost skin substitute group. We welcomed comments on
these proposals.
Comment: Multiple commenters supported our proposal to delete HCPCS
code C1849 and our proposal 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.
Response: We appreciate the commenters' support for our proposals.
Comment: Two commenters supported our proposal to assign HCPCS code
A4100 to the low cost skin substitute group.
Response: We appreciate the commenters' support for our proposal.
Comment: Multiple commenters noted that when we proposed to delete
HCPCS code C1849 and assign any current or future product-specific code
in the HCPCS A2XXX series that is described by HCPCS code C1849 to the
high cost group that we did not propose any additional A-codes to be
assigned to the high cost skin substitute group beyond the A-codes that
were identified as being assigned to the high cost group as of April 1,
2022. These commenters requested that we identify the A-codes that
would be described by HCPCS code C1849 and assign those codes to the
high cost group. These commenters also suggested products that they
believe are synthetic graft skin substitute products that are described
by HCPCS code C1849. Other commenters requested that newer graft skin
substitute products that were given codes in the HCPCS A2XXX series
after the OPPS proposed rule is released be assigned to the high cost
group.
Response: We agree with the commenters that we need to state which
graft skin substitute products that are assigned to the HCPCS A2XXX
series will be in the high cost group starting January 1, 2023, based
on the code descriptor for HCPCS code C1849 (Skin substitute,
synthetic, resorbable, by per square centimeter). As explained in the
CY 2023 PFS proposed rule (87 FR 46028 through 46029), the current
categorization of skin substitutes as either synthetic or non-synthetic
is not mutually exclusive given the expansion of skin substitute
products that may contain both biological and synthetic elements.
Having products with both biological and synthetic elements leads to
difficulty defining which of the products assigned to the A2XXX series
would be considered ``synthetic'' and described by HCPCS code C1849.
Therefore, we have decided to assign all graft skin substitute products
with a HCPCS A2XXX series code to the high cost skin substitute group
starting January 1, 2023.
After consideration of the public comments we received, we are
finalizing our proposals with modifications. We are finalizing our
proposal to delete HCPCS code C1849. We are also finalizing our
proposal 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. In addition, any graft skin substitute
product that is assigned a code in the HCPCS A2XXX series in the future
will 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 product-specific A-codes even if cost and pricing
data are not available for these products.
We are also finalizing our proposal 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.
Table 62 includes the final CY 2023 cost category assignment for each
skin substitute product covered by these policies.
BILLING CODE 4120-01-P
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d. Key Objectives/Roadmap for Consistent Treatment of Skin Substitutes
We outlined our HCPCS Level II coding and payment policy objectives
in the CY 2023 OPPS/ASC proposed rule as we believed it would be
beneficial for interested parties to understand, 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 settings; 2)
ensuring that appropriate HCPCS codes describe skin substitute
products; 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.
In past years, 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 9 skin substitute
products in accordance with the policy finalized in the CY 2022 PFS
final rule, which are codes we typically assign to identify ambulance
services and medical supplies, instead of ``Q'' codes, which we
typically assign to identify drugs and biologicals. 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 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 what they will be paid when
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, which would allow CMS
sufficient time to consider input from interested parties on coding and
policy changes primarily through our rulemaking process, with the goal
of ensuring access to medically necessary care involving the use of
these products.
We welcomed 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 welcomed feedback on
the 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
settings, we included similar proposed changes in the CY 2023 PFS
proposed rule, which were issued near the time the CY 2023 OPPS/ASC
proposed rule was issued.
Comment: A few commenters expressed support for CMS's efforts to
create a consistent payment approach for skin substitutes across
physician office and hospital outpatient department settings. One
commenter agreed with the multi-year timeline and appreciated CMS
recognizing the need to ensure that changes in skin substitute policies
do not adversely impact beneficiary access and encouraged CMS to
promote transparency as reforms are contemplated and allow stakeholders
to review and comment on detailed proposals prior to adoption.
Response: We appreciate the commenters' support of our key
objectives and roadmap.
e. Changing the Terminology of Skin Substitutes
In the CY 2023 OPPS/ASC proposed rule (87 FR 44657), we stated that
as we work to clarify our policies for these products, we believe that
the existing terminology of ``skin substitutes'' 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 86065). 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. 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 typically regulated as devices by the FDA 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. 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. The FDA approves new drugs through
the New Drug Application (NDA), and approves biologic products through
the Biologics License Application (BLA).
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 proposed to replace the term ``skin
substitutes'' with the term ``wound care management'' or ``wound care
management products.'' We explained that we believe these new terms
more accurately describe 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 noted that we understand that the
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,
[[Page 71986]]
99487, 99489, 99490-99491) that are commonly used by healthcare
professionals. We also explained that we understand that the use of
``management'' in the proposed terms might be construed by some to
implicate AMA CPT Evaluation or Assessment and Management (E/M) codes.
We clarified 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 noted that 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 alternatives considered.
We solicited comment on the 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
noted that we were 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 requested comment on other
possible terms that could be used to more meaningfully and accurately
describe the suite of products currently referred to as skin
substitutes.
Comment: One commenter supported the change in terminology to wound
care management or wound care management products.
Several commenters disagreed with the proposed terminology change.
Some commenters suggested we should retain the term skin substitute. A
few commenters suggested that CMS work directly with the CPT Editorial
Panel and medical specialty societies to determine the optimal approach
to updating skin substitutes terminology.
Another commenter did not agree that a terminology change is
necessary, but if CMS determined that it was, they suggested the term
``wound care products.'' The commenter stated that inclusion of the
word management in any description could be inappropriately construed
to imply evaluation assessment and management services and would be
confusing. Another commenter expressed support for efforts to more
accurately define skin substitutes, but did not agree with the proposed
terminology.
A few commenters suggested alternatives including: Cellular and/or
Synthetic Grafts for Surgical Wound Management; Bioengineered, Cellular
or Tissue-Based Products. A few commenters supported use of one of our
alternative recommended terms, Cellular and/or tissue-based products
(CTPs) for skin wounds, and stated that it was consistent with the
American Society for Standards and Materials (ASTM) definition of skin
substitutes, and is nomenclature used by wound care clinicians.
Response: We appreciate the feedback from commenters, and we are
not finalizing a change in terminology at this time. We will take these
comments into account, as well as other feedback from interested
parties as we consider our approach to addressing inconsistencies in
our policies for skin substitutes in future rulemaking. We also refer
readers to the CY 2023 PFS final rule for additional discussion
regarding changing the terminology and the roadmap for consistent
treatment of 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.
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 of 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.\109\ 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.
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\109\ 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.
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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
[[Page 71987]]
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 ensure adequate payment 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 proposed 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 proposed 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 received the following comments on our proposals.
Comment: Two commenters opposed ending the additional $10 payment
after December 31, 2024. The commenters supported continuing the
payment either permanently or until a majority of radiopharmaceutical
claims for Tc-99m reported HCPCS code Q9969, which would clearly show
that the radiopharmaceutical is sourced with non-HEU material. These
commenters were concerned that the claims data for radiopharmaceuticals
does not fully report the costs of radiopharmaceuticals manufactured
using non-HEU sourced materials. These commenters believe that will be
the case even after all claims report radiopharmaceuticals manufactured
from non-HEU-sourced materials starting in CY 2025. One of the
commenters suggested adding a new claim edit to require providers to
identify whether the Tc-99m radiopharmaceutical product they use is
sourced from non-HEU or HEU reactors. These same commenters also
requested that the $10 additional payment be increased to an amount
that reflects what the payment would have been if it was adjusted
annually by the hospital market basket since it was implemented in
2013. The commenters also requested that the copayment amount for HCPCS
code Q9969 be eliminated because they are concerned that the
administrative burden of handling the beneficiary copayment is
discouraging providers from reporting the $10 additional payment.
Response: The certification by the Secretary of Energy regarding
the supply of non-HEU-sourced Mo-99 effective January 2, 2022, stated
that 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. That means radiopharmaceuticals starting
in 2023 will no longer be sourced from HEU sources. CMS will be able to
use claims generated in 2023 for rulemaking in the OPPS in CY 2025. As
stated in the CY 2022 OPPS final rule, the purpose of the $10
additional payment is limited to mitigating any adverse impact of
transitioning to non-HEU sources (86 FR 63560). Once the transition is
complete and payment rates reported for Tc-99m radiopharmaceuticals no
longer include costs from HEU-sourced Tc-99m, there is no longer a need
for the additional payment. This will be the case starting in CY 2025,
at which time, the additional payment can cease.
We also disagree with the request to waive the copayment for HCPCS
code Q9969 as we do not believe the administrative burden associated
with collecting copayments is significant enough to justify such an
action. Providers regularly collect copayments for services paid under
the OPPS, and we do not believe that collecting a copayment for the
additional $10 payment is a significant additional burden for
providers. Likewise, we do not agree with the suggestion to require a
claim edit to identify a radiopharmaceutical as non-HEU or HEU sourced.
We believe such a requirement would likely increase the administrative
burden on providers unnecessarily. HCPCS code Q9969 is being reported
on less than 15 percent of eligible claims, and it is unlikely that the
use of HCPCS code Q9969 would ever exceed 50 percent of the eligible
claims even if all Tc-99m radiopharmaceuticals are produced from non-
HEU sources. Therefore, we are not adopting this recommendation.
Comment: One commenter supported our proposed policy to continue
the $10 additional payment for CY 2023 and CY 2024 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. The commenter also
requested that we evaluate and ensure costs reported in Medicare claims
fully capture the cost of non-HEU-sourced Tc-99m before deciding to end
the additional payment for non-HEU sourced Tc-99m payment starting in
CY 2025.
Response: We appreciate the support of the commenter for our
proposed policy and plan to review our policy prior to CY 2025 ensure
that the anticipated end of using HEU-sourced material to generate Tc-
99m radiopharmaceuticals has occurred by December 31, 2022, and claims
data, starting in CY 2025, will only report Tc-99m radiopharmaceuticals
manufactured from non-HEU sources.
Comment: One commenter supported the portion of our proposal that
would continue the $10 additional payment for non-HEU sourced Tc-99m
radiopharmaceuticals through December 31, 2024.
Response: We appreciate the support of the commenter.
After consideration of the public comments we received, we are
finalizing without modification our proposal to continue the additional
$10 payment for CYs 2023 and 2024 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
[[Page 71988]]
the Medicare claims data. We also are finalizing without modification
our proposal that the additional $10 payment will end after December
31, 2024, as beginning with CY 2025, the Medicare claims data used to
set payment rates will reflect the full cost of non-HEU-sourced Tc-99m.
C. Requirement in the Physician Fee Schedule CY 2023 Proposed and Final
Rule for 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, the CY 2023 PFS proposed rule
proposed 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 proposed 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.
As explained in the OPPS/ASC proposed rule (87 FR 44717), because
the CY 2023 PFS proposed rule proposed to codify certain billing
requirements for HOPDs and ASCs, we explained in the proposed rule that
we wanted to ensure interested parties were aware of them and knew to
refer to that rule for a full description of the proposed policy.
Interested parties were asked to 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. We stated public comments on
these proposals will be addressed in the CY 2023 PFS final rule. We
note that this same notice appeared in section XIII.D.3 of the CY 2023
OPPS/ASC proposed rule (87 FR 44658).
We thank commenters for their feedback on this proposal. As
indicated in the OPPS/ASC proposed rule (87 FR 44717), public comments
on the policies discussed above will be addressed in the CY 2023 PFS
proposed rule. For final details on this policy, we refer readers to
the CY 2023 PFS final rule, which is available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We note that
this same notice appears in section XIII.D.3 of this CY 2023 OPPS/ASC
final rule with comment period.
D. Inflation Reduction Act--Section 11101 Regarding Beneficiary Co-
Insurance
On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) (Pub.
L. 117-169) was signed into law. Section 11101 of the Inflation
Reduction Act requires a drug manufacturer to pay a rebate if the ASP
of their drug product rises at a rate that is faster than the rate of
inflation. Section 11101(b) of the IRA amended sections 1833(i) and
1833(t)(8) by adding a new paragraph (9) and subparagraph (F),
respectively, that specify coinsurance under the ASC and OPPS payment
systems. Section 1833(i)(9) requires that under the ASC payment system
beneficiary coinsurance for a Part B rebatable drug that is not
packaged be calculated using the inflation-adjusted amount when that
amount is less than the otherwise applicable payment amount for the
drug furnished on or after April 1, 2023. Section 1833(t)(8)(F)
requires that under the OPPS payment system beneficiary copayment for a
Part B rebatable drug (except for a drug that has no copayment applied
under subparagraph (E) of such section or packaged into the payment for
a procedure) is to be calculated using the inflation-adjusted amount
when that amount is less than ASP plus 6 percent beginning April 1,
2023. Sections 1833(i)(9) and 1833(t)(8)(F) reference sections
1847A(i)(5) for the computation of the beneficiary coinsurance and
1833(a)(1)(EE) for the computation of the payment to the ASC or
provider and state that the computations would be done in the same
manner as described in such provisions. The computation of the
coinsurance is described in section 1847A(i); specifically, in
computing the amount of any coinsurance applicable under Part B to an
individual to whom such Part B rebatable drug is furnished, the
computation of such coinsurance shall be equal to 20 percent of the
inflation-adjusted payment amount determined under section
1847A(i)(3)(C) for such part B rebatable drug. The calculation of the
payment to the provider or ASC is described in section 1833(a)(1)(EE),
and the provider or ASC would be paid the difference between the
beneficiary coinsurance of the inflation-adjusted amount and ASP plus 6
percent. We wish to make readers aware of this statutory change that
begins April 1, 2023. Additionally, we refer readers to the full text
of the IRA.\110\ Additional details on the implementation of section
11101 of the IRA are forthcoming and will be communicated through a
vehicle other than the CY 2023 OPPS/ASC regulation.
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\110\ H.R. 5376 available online at: https://www.congress.gov/bill/117th-congress/house-bill/5376/text.
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VI. Estimate of OPPS Transitional Pass-Through Spending for Drugs,
Biologicals, Radiopharmaceuticals, and Devices
A. Amount of Additional Payment and Limit on Aggregate Annual
Adjustment
Section 1833(t)(6)(E) of the Act limits the total projected amount
of transitional pass-through payment for drugs, biologicals, and
categories of devices for a given year to an ``applicable percentage,''
currently not to exceed 2.0 percent of total program payments estimated
to be made for all covered services under the OPPS furnished for that
year. If we estimate before the beginning of the calendar year that the
total amount of pass-through payments in that year would exceed the
applicable percentage, section 1833(t)(6)(E)(iii) of the Act requires a
uniform prospective reduction in the amount of each of the transitional
pass-through payments made in that year to ensure that the limit is not
exceeded. We estimate the pass-through spending to determine whether
payments exceed the applicable percentage and the appropriate pro rata
reduction to the conversion factor for the projected level of pass-
through spending in the following year to ensure that total estimated
pass-through spending for the prospective payment year is budget
neutral, as required by section 1833(t)(6)(E) of the Act.
For devices, developing a proposed estimate of pass-through
spending in CY 2023 entails estimating spending for two
[[Page 71989]]
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
proposed to include an estimate of any skin substitutes and similar
products in our estimate of pass-through spending for devices.
For drugs and biologicals eligible for pass-through payment,
section 1833(t)(6)(D)(i) of the Act establishes the pass-through
payment amount as the amount by which the amount authorized under
section 1842(o) of the Act (or, if the drug or biological is covered
under a competitive acquisition contract under section 1847B of the
Act, an amount determined by the Secretary equal to the average price
for the drug or biological for all competitive acquisition areas and
year established under such section as calculated and adjusted by the
Secretary) exceeds the portion of the otherwise applicable fee schedule
amount that the Secretary determines is associated with the drug or
biological. Our proposed estimate of drug and biological pass-through
payment for CY 2023 for this group of items was $622.6 million, as
discussed below, because we proposed 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 proposed would be paid at
ASP minus 22.5 percent, and because we proposed to pay for CY 2023
pass-through payment drugs and biologicals at ASP+6 percent, as we
discuss in section V.A of the CY 2023 OPPS/ASC proposed rule (87 FR
44625). However, in light of the Supreme Court's recent decision, we
explained that we fully anticipated applying a rate of ASP+6 percent to
340B drugs and biologicals in the final rule for CY 2023, in which case
we explained that our estimate of drug and biological pass-through
payment for CY 2023 for this group of items was $40 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
the CY 2023 OPPS/ASC proposed rule (87 FR 44643 through 44644). We
proposed that all of these policy-packaged drugs and biologicals with
pass-through payment status would be paid at ASP+6 percent, like other
pass-through drugs and biologicals, for CY 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 the CY
2023 OPPS/ASC proposed rule (87 FR 44641), we discuss our policy to
determine if the costs of certain policy-packaged drugs or biologicals
are already packaged into the existing APC structure. If we determine
that a policy-packaged drug or biological approved for pass-through
payment resembles predecessor drugs or biologicals already included in
the costs of the APCs that are associated with the drug receiving pass-
through payment, we proposed to offset the amount of pass-through
payment for the policy-packaged drug or biological. For these drugs or
biologicals, the APC offset amount is the portion of the APC payment
for the specific procedure performed with the pass-through drug or
biological, which we refer to as the policy-packaged drug APC offset
amount. If we determine that an offset is appropriate for a specific
policy-packaged drug or biological receiving pass-through payment, we
proposed to reduce our estimate of pass-through payments for these
drugs or biologicals by the APC offset amount.
Similar to pass-through spending estimates for devices, the first
group of drugs and biologicals requiring a pass-through payment
estimate consists of those products that were recently made eligible
for pass-through payment and that will continue to be eligible for
pass-through payment in CY 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. Estimate of Pass-Through Spending for CY 2023
For CY 2023, we proposed 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
[[Page 71990]]
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 in
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, and HCPCS code C2596 will cost $2.8 million in
pass-through expenditures in CY 2023. Therefore, we proposed an
estimate for the first group of devices of $48 million.
Comment: We received a comment from the manufacturer of AVITA
Medical's RECELL[supreg] System (RECELL) on the proposed estimate of
pass-through spending for CY 2023. The commenter stated that under
section VI. B, Proposed Estimate of Pass-through Spending for CY 2023,
CMS lists the estimated transitional pass-through (TPT) expenditures
for the 14 active TPT HCPCS codes in CY 2023. This list includes an
estimate of $18.4 million in TPT expenditures for HCPCS code C1832. The
CY 2023 OPPS/ASC proposed rule indicates that the TPT expenditure
estimates are based on information from device manufacturers. However,
the manufacturer stated that the TPT application for RECELL System
estimated approximately 800 total devices annually with 10-15 percent
of cases involving Medicare beneficiaries, for a total of 80-120
devices under Medicare. With the stated list price of $7,500, the
manufacturer's estimate of total annual TPT expenditures for C1832 of
under $1 million (120 devices * $7,500.00 = $900,000).
Response: We appreciate the comment. We agree with the commenter,
and have updated this final rule with comment period to note that the
HCPCS code C1832 will cost $900,000 in pass-through expenditures in CY
2023.
Comment: A number of commenters stated that CMS provided
conflicting information in the proposed rule for Table 30: Devices with
Pass-Through Status (or Adjusted Separate Payment) Expiring at the End
of the Fourth Quarter of 2022, in 2023, or in 2024 where the expiration
dates for devices with pass-through status expiring at the end of the
fourth quarter of 2022 are also included in the proposed estimate of
pass-through spending for CY 2023 as part of the first group of
devices.
Response: We appreciate the commenters' input. When we estimated
pass-through spending for CY 2023 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 (87 FR 44660), we inadvertently included estimated
device pass-through spending for device categories that are expiring in
CY 2022. For the CY 2023 final rule, we have removed six (6) HCPCS
codes with CY 2022 expiration dates from the final estimate of pass-
through payment for CY 2023. These codes for which pass-through status
expires in CY 2022 are: C1823 (Generator, neurostimulator
(implantable), nonrechargeable, with transvenous sensing and
stimulation leads), C1824 (Generator, cardiac contractility modulation
(implantable)), C1982 (Catheter, pressure-generating, one-way valve,
intermittently occlusive), C1839 (Iris prosthesis), C1734 (Orthopedic/
device/drug matrix for opposing bone-to-bone or soft tissue-to bone
(implantable)), and C2596 (Probe, image-guided, robotic, waterjet
ablation). In addition, we inadvertently included C1831 as part of 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, where we estimated HCPCS
code C1831 will cost $29,900 in pass-through expenditures in CY 2023
(87 FR 44660). Instead, C1831 should have been included as part of the
estimated proposed CY 2023 pass-through spending for device categories
in the second group: device categories that we assumed at the time of
the development of the proposed rule would be newly eligible for pass-
through payment in CY 2023 and additional device categories that we
estimated could be approved for pass-through status after the
development of the proposed rule and before January 1, 2023. Consistent
with the final approval for device pass-through payment status of C1831
(Personalized, anterior and lateral interbody cage (implantable)), as
described in section IV.2.b.1 of this final rule with comment period,
we have added C1831 to Table 52 in this final rule with comment period.
We inadvertently did not include C1831 in Table 30 in the proposed
rule. C1831 received preliminary approval as part of the October 1,
2021 quarterly review process and had pass-through payment status in CY
2022. Therefore, the device code should have been included in Table 30
in the proposed rule. Table 52 has been updated to reflect the
inclusion of C1831.
As such, 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 7 active categories for CY 2023. The active categories are
described by HCPCS codes C1052, C1062, C1748, C1761, C1825, C1832, and
C1833. 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 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
C1825 will cost $749,000 in pass-through expenditures in CY 2023, HCPCS
code C1832 will cost $900,000 in pass-through expenditures in CY 2023,
and HCPCS code C1833 will cost $5.1 million in pass-through
expenditures in CY 2023. Therefore, we have finalized an estimate for
the first group of devices of $21 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 would 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 the CY 2023 OPPS/ASC proposed rule (87 FR
44660) 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 proposed to use the general
[[Page 71991]]
methodology described in the CY 2008 OPPS/ASC final rule with comment
period (72 FR 66778), while also taking into account recent OPPS
experience in approving new pass-through device categories. For the
proposed rule, the proposed estimate of CY 2023 pass-through spending
for this second group of device categories is $101.4 million.
We did not receive any public comments on this proposal. As stated
earlier in this final rule with comment period, we are approving four
devices for pass-through payment status in the CY 2023 rulemaking
cycle: Uretero1TM Ureteroscope System, Evoke[supreg] SCS
System, Vivistim[supreg] Paired VNSTM System, and
aprevoTM Transforaminal IBF. The manufacturers of these
systems provided utilization and cost data that indicate the amount of
spending for the devices would be approximately $37.5 million for
Uretero1TM Ureteroscope System, $7.4 million for
Evoke[supreg] SCS System, $9 million for Vivistim[supreg] Paired
VNSTM System, and $7.2 million for aprevoTM
Transforaminal IBF. Therefore, we are finalizing an estimate of $61.1
million for this second group of devices for CY 2023.
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 proposed to use the CY 2021 Medicare hospital outpatient
claims data regarding their utilization, information provided in their
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 continue to
have 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
proposed 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 was $592.7 million for this group of
drugs. However, in light of the Supreme Court's decision, we explained
that we fully anticipated 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 was $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 proposed 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.
We did not receive any public comments on our proposal. Using our
methodology for this final rule with comment period, we calculated the
CY 2023 spending estimate for this first group of drugs and biologicals
as approximately $33.5 million. Because we are finalizing a payment
rate of ASP+6 percent for separately payable drugs regardless of
whether they are acquired under the 340B program, the proposed payment
rate difference between the pass-through payment amount and the non
pass-through payment amount is, therefore, $0.
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 the CY 2023 OPPS/ASC proposed rule
(87 FR 44660 through 44661) 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 the CY 2023 OPPS/ASC proposed rule (87
FR 44660 through 44661) 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
proposed to use utilization estimates from pass-through applicants,
pharmaceutical industry data, clinical information, recent trends in
the per-unit ASPs of hospital outpatient drugs, and projected annual
changes in service volume and intensity as our basis for making the CY
2023 pass-through payment estimate. We also proposed to consider the
most recent OPPS experience in approving new pass-through drugs and
biologicals. Using our proposed methodology for estimating CY 2023
pass-through payments for this second group of drugs, we calculated a
proposed spending estimate for this second group of drugs and
biologicals of approximately $10 million.
We did not receive any public comments on our proposal. Since the
release of the CY 2023 OPPS/ASC proposed rule, we have identified eight
additional policy-packaged drugs in addition to the four policy-
packaged drugs that had pass-through status when the proposed rule was
released. Our original proposed estimate of $10 million of additional
pass-through payments for the second group of drugs and biologicals
anticipated the approval of some, but not all, of the additional
policy-packaged drugs and biologicals with pass-through status.
Therefore, for this final rule with comment period, we are revising our
estimate of pass-through spending for the second group of drugs and
biologicals to be $20 million.
We estimated for the CY 2023 OPPS/ASC proposed rule (87 FR 44661)
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 explained that we fully anticipated
applying a rate of ASP+6 percent to 340B drugs and biologicals in the
final rule with comment period for CY 2023, in which case we estimated
for the CY 2023 OPPS/ASC proposed rule (87 FR 44641) 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
[[Page 71992]]
(approximately $149.4 million for device categories and approximately
$29.9 million for drugs and biologicals). This alternative would have
represented only 0.21 percent of total projected OPPS payments for CY
2023. Therefore, we estimated that pass-through spending in CY 2023
would not amount to 2.0 percent of total projected OPPS CY 2023 program
spending.
We estimate for this final rule with comment period that the amount
of pass-through spending for the device categories and the drugs and
biologicals that are continuing to receive pass-through payment in CY
2023 and those device categories, drugs, and biologicals that first
become eligible for pass-through payment during CY 2023 would be
approximately $135.5 million (approximately $82 million for device
categories and approximately $53.5 million for drugs and biologicals),
which represents only 0.16 percent of total projected OPPS payments for
CY 2023 (approximately $86.5 billion). 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. OPPS Payment for Hospital Outpatient Visits and Critical Care
Services
For CY 2023, we proposed 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 proposed
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 the CY 2023 OPPS/ASC proposed rule (87 FR 44502), we solicited
public comments on any changes to these codes that we should consider
for future rulemaking cycles. We continued to encourage commenters to
provide the data and analysis necessary to justify any suggested
changes.
Comment: We received a comment suggesting that CMS develop a
national standard for Emergency Department (ED) visit guidelines for
all ED levels.
Response: We thank the commenters for their suggestion. As we noted
in CY 2008 OPPS/ASC final rule with comment period (72 FR 66579), we
understand the interest in promulgating national guidelines, but we
continue to believe that it is unlikely that one set of straightforward
national guidelines could apply to the reporting of all ED visits. We
may revisit this topic in the future as necessary.
After consideration of the public comments, we are finalizing our
proposal to continue our current ED outpatient visits and critical care
payment policies.
As we stated in the CY 2022 OPPS/ASC final rule with comment period
(86 FR 63663), the volume control method for clinic visits furnished by
non-excepted off-campus provider-based departments (PBDs) continues to
apply for CY 2022 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 these departments. The PFS-equivalent rate for CY 2023
is 40 percent of the proposed OPPS payment. Under this policy, these
departments will be paid approximately 40 percent of the OPPS rate for
the clinic visit service in CY 2023.
Additionally, for CY 2023 we proposed that excepted off-campus
provider-based departments (PBDs) (departments that bill the modifier
``PO'' on claim lines) of rural Sole Community Hospitals (SCHs), 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
the CY 2023 OPPS/ASC proposed rule (87 FR 44502). For CY 2023, we will
be finalizing our proposal to exempt rural SCHs from the clinic visit
payment policy. For a full discussion of this policy, we refer readers
to section X. of this final rule with comment period.
Comment: We received several comments on our overall clinic visit
payment policy. Many commenters continued to express the belief that
this policy undermines congressional intent and exceeds the agency's
legal authority. As they have in previous years, commenters argued that
the policy is based on flawed assumptions and urged CMS to eliminate
this policy altogether.
Response: We continue to believe that section 1833(t)(2)(F) of the
Act gives the Secretary authority to develop a method for controlling
unnecessary increases in the volume of covered OPD services, including
a method that controls unnecessary volume increases by removing a
payment differential that is driving a site-of-service decision, and as
a result, is unnecessarily increasing service volume.\111\ As we noted
in the CY 2019 OPPS/ASC proposed rule (83 FR 37138 through 37143),
``[a] large source of growth in spending on services furnished in
hospital outpatient departments (HOPDs) appears to be the result of the
shift of services from (lower cost) physician offices to (higher cost)
HOPDs.'' We continue to believe that these shifts in the sites of
service are unnecessary if the beneficiary can safely receive the same
services in a lower cost setting but instead receives care in a higher
cost setting due to payment incentives. In most cases, the difference
in payment is leading to unnecessary increases in the volume of covered
outpatient department services, and we remain concerned that this shift
in care setting increases beneficiary cost-sharing liability because
Medicare payment rates for the same or similar services are generally
higher in hospital outpatient departments than in physician offices. We
continue to believe that our method will address the concerns as
described in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59005).
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\111\ Available at: https://www.ssa.gov/OP_Home/ssact/title18/1833.htm.
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Additionally, 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.
Comment: Many commenters characterized the reductions to hospital
payments for clinic visits as excessive and harmful, especially during
the COVID-19 PHE. One commenter noted that ``Continuing to impose a 60%
cut on clinic visit services in 2023, on top of the dire financial
impacts on U.S. hospitals and health systems due to COVID-19, would
greatly endanger the critical role that HOPDs play in their
communities, including providing convenient access to care for the most
vulnerable and medically complex beneficiaries.''
Response: We share commenter's concerns about the financial
difficulties brought on by the COVID-19 PHE. We have taken a variety of
actions to
[[Page 71993]]
support hospitals so they can more effectively respond during the
COVID-19 PHE, including waiving the provider-based rules and permitting
on-campus and excepted off-campus provider-based departments to
temporarily relocate and continue to be paid under the OPPS if they
submit a temporary extraordinary relocation exception request to their
Regional Office. We have continued to monitor the volume control clinic
visit policy and will make adjustments as appropriate. For CY 2023, we
are finalizing our proposal to exempt rural SCHs from the clinic visit
payment policy. For a full discussion of this exemption, we refer
readers to section X of this final rule with comment period.
Comment: We received comments supporting CMS' efforts to continue
implementing its method to control for unnecessary increases in the
volume of outpatient services. One commenter asked that CMS continue to
consider ways to expand and strengthen the current site-neutral payment
policies. They noted that there may be other provider-based department
settings where it makes sense to apply site-neutral payment policies,
such as on-campus PBDs, ambulatory surgery centers, and emergency
departments.
Response: We appreciate the commenters' support and we will
continue to monitor this policy and take commenters' suggestions into
consideration for potential future rulemaking.
After consideration of the public comments, we are finalizing our
proposal to continue the volume control method under which we 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 PBDs.
VIII. Payment for Partial Hospitalization Services
A. Background
A partial hospitalization program (PHP) is an intensive outpatient
program of psychiatric services provided as an alternative to inpatient
psychiatric care for individuals who have an acute mental illness,
which includes, but is not limited to, conditions such as depression,
schizophrenia, and substance use disorders. Section 1861(ff)(1) of the
Act defines partial hospitalization services as the items and services
described in paragraph (2) prescribed by a physician and provided under
a program described in paragraph (3) under the supervision of a
physician pursuant to an individualized, written plan of treatment
established and periodically reviewed by a physician (in consultation
with appropriate staff participating in such program), which sets forth
the physician's diagnosis, the type, amount, frequency, and duration of
the items and services provided under the plan, and the goals for
treatment under the plan. Section 1861(ff)(2) of the Act describes the
items and services included in partial hospitalization services.
Section 1861(ff)(3)(A) of the Act specifies that a PHP is a program
furnished by a hospital to its outpatients or by a community mental
health center (CMHC), as a distinct and organized intensive ambulatory
treatment service, offering less than 24-hour-daily care, in a location
other than an individual's home or inpatient or residential setting.
Section 1861(ff)(3)(B) of the Act defines a CMHC for purposes of this
benefit. We refer readers to sections 1833(t)(1)(B)(i), 1833(t)(2)(B),
1833(t)(2)(C), and 1833(t)(9)(A) of the Act and 42 CFR 419.21, for
additional guidance regarding PHP.
In CY 2008, we began efforts to strengthen the PHP benefit through
extensive data analysis, along with policy and payment changes by
implementing two refinements to the methodology for computing the PHP
median. For a detailed discussion on these policies, we refer readers
to the CY 2008 OPPS/ASC final rule with comment period (72 FR 66670
through 66676). In CY 2009, we implemented several regulatory, policy,
and payment changes. For a detailed discussion on these policies, we
refer readers to the CY 2009 OPPS/ASC final rule 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 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).
[[Page 71994]]
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. PHP APC Update for CY 2023
1. PHP APC Geometric Mean Per Diem Costs
In summary, for CY 2023 only, we proposed to calculate the CMHC and
hospital-based PHP geometric mean per diem costs in accordance with our
existing methodology, except that while we proposed to use the latest
available CY 2021 claims data, we proposed 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 the CY 2023 OPPS/ASC
proposed rule (87 FR 44680 through 44682). Following this proposed
methodology, we proposed 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, we proposed not to include data from certain nonstandard
cost center lines in the OPPS ratesetting database construction for CY
2023; however, we solicited public comment about these data for use in
future ratesetting. Lastly, in accordance with our longstanding policy,
we proposed to continue to use CMHC APC 5853 (Partial Hospitalization
(three or More Services Per Day)) and hospital-based PHP APC 5863
(Partial Hospitalization (three or More Services Per Day)).
We are finalizing the proposals in this CY 2023 OPPS/ASC final rule
as proposed, but with a modification. For only CY 2023, and not
subsequent years, we are applying an equitable adjustment, under the
authority of section 1833(t)(2)(E) of the Act, to finalize $142.70 as
the CY 2023 CMHC PHP APC payment rate, which is the same payment rate
in effect for the CY 2022 CMHC PHP APC. Using the most recent updated
claims and the cost report data that was available for the CY 2021
rulemaking as proposed, the final hospital-based PHP geometric mean per
diem cost is $275.83. We discuss our rationale and the public comments
received 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 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 in the CY 2023 OPPS/ASC proposed rule (87 FR 44662
through 4663), we proposed 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
[[Page 71995]]
and CMHCs. For the CY 2023 OPPS/ASC proposed rule (87 FR 44662 through
44664), we noted that 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 noted that 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
stated that we believe 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 noted in the PHP
data, we also noted that even though hospital operations do not appear
to have returned to the same levels as in 2019, the Medicare outpatient
service volumes appear to be returning to more normal pre-pandemic
levels. As discussed in section X.D of the CY 2023 OPPS/ASC proposed
rule (87 FR 44680 through 44682), 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 stated that we recognize that future COVID-19
variants may have potentially varying effects and that 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 explained that we believe the more recently available CY
2021 claims data would better represent the volume and mix of claims
for the CY 2023 OPPS. Accordingly, we stated that 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
the CY 2023 OPPS/ASC proposed rule (87 FR 44681 through 44683), we
proposed to use the latest available CY 2021 claims for CY 2023 PHP
ratesetting.
We also 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
the CY 2023 OPPS/ASC proposed rule (87 FR 44681 through 44683), we
explained that 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 have been $127.38, which would have been 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 stated that we believe 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 noted that we would continue to review the updated
cost report data as they are available.
Based on the results of this analysis, we proposed 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). Specifically, we would 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 proposed to do for other APCs
under the OPPS as discussed in section X.D of the CY 2023 OPPS/ASC
proposed rule (87 FR 44680 through 44683), we proposed 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.
Comment: We received one comment which expressed support of our
proposal to use the CY 2021 claims and the cost information from prior
to the COVID-19 PHE, that is, the cost information that was available
for the CY 2021 OPPS/ASC rulemaking, for calculating the CY 2023 CMHC
and hospital-based PHP APC per diem costs.
Response: We thank the commenter for their support of our proposal
for CY 2023. We intend to continue monitoring the claims and cost
report information for PHP providers during the ongoing COVID-19 PHE,
and to consider which data are the best available for rulemaking in the
future.
Comment: We received 11 comments from providers, hospital
associations, and national organizations expressing concerns about the
proposed decrease in PHP per diem rates. Several commenters noted that
the proposed CY 2023 PHP payment rates were below the calculated
geometric mean per diem costs, and erroneously concluded that CMS had
applied a different methodology to calculate PHP payment rates than in
prior years. Commenters expressed that the proposed rates would not be
sufficient to ensure the sustainability of the PHP program and could
impact access to PHP services. Many of the commenters requested that
CMS refrain from going forward with the proposed rate cuts for PHP
services in CY 2023 and requested that CMS reconsider the proposed
methodology for CY 2023 and its impact on the immediate future of PHP
services. A few commenters suggested CMS explore alternate ways to
protect against rate reductions, such as freezing the APC weights for
PHP services at their CY 2022 levels or establishing a PHP base rate
that is updated annually by an inflation factor.
Response: We understand the concerns that commenters raised the
regarding the proposed decreases in the PHP rates. Contrary to what
some commenters suggested, the methodology we applied in calculating
the proposed PHP payment rates is consistent with the methodology we
have applied in prior years. We proposed to calculate the PHP payment
rates based on our longstanding methodology, in accordance with the
statutorily required relative payment weight calculations under the
OPPS. Under the longstanding OPPS ratesetting methodology, CMS
establishes APC payment rates by annually reviewing and revising the
relative payment weights for APCs in accordance with sections
1833(t)(2) and 1833(t)(9) of the Act, as further described in section
II.A.4 of this final rule with comment period. We further note that the
OPPS is subject to budget neutral adjustments to the weight scaler as
described in section II.A.4. and is also subject to the OPPS conversion
factor described in section II.B. of this final rule with comment
period. As a result of those OPPS budget neutrality adjustments, the
proposed and final APC payment rates may be higher or lower than their
estimated APC geometric mean costs.
Regarding commenters' suggestion to establish a fixed PHP base rate
that is updated annually by an inflation factor, we do not believe such
a methodology would be consistent the statutory requirements under
sections 1833(t)(2) and 1833(t)(9) of the Act. However, we share
commenters' concerns that the CMHC PHP payment rate be sufficient to
protect access to CMHC PHP services in CY 2023. As we discussed in the
CY 2023 OPPS/ASC proposed rule, we believed the most appropriate
[[Page 71996]]
methodology to use for setting PHP rates was our longstanding
methodology. After considering the potential impact to PHP geometric
mean per diem costs, we proposed to use the latest available CY 2021
claims, but we proposed 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 believed that this proposed methodology would
appropriately mitigate the effects of the COVID-19 PHE on the cost
report data while accounting for the overall trend in Medicare
outpatient service volumes, which we have noted appear to be returning
to more normal pre-pandemic levels. After considering the comments we
received, we agree with commenters requesting that CMS not finalize the
proposed rate cuts for CMHC PHP services in CY 2023. As we have stated
in previous rules, our goal is to support ongoing access to PHPs in
CMHCs and, in furtherance of that goal, we have historically
established mitigation policies in situations when we believe
fluctuations in PHP payments do not accurately reflect a commensurate
decrease in the cost of providing those services, particularly because
costs generally increase over time. We have also implemented mitigation
policies to stabilize CMHC PHP geometric mean per diem costs and
thereby established PHP APC payment rates that would otherwise change
significantly from one year to the next; these have been especially
important to supporting the stability of the program given the small
number of CMHC PHP providers.
More specifically, even though the final CY 2023 CMHC PHP geometric
mean cost of $135.68 is nearly the same as the final CY 2022 geometric
mean cost floor of $136.14, the calculated payment rates for the 2
years are substantially different, with the CY 2022 final payment rate
being $142.70 and the proposed and final calculated payment rates for
CY 2023 being $130.54 and $131.94, respectively. In addition, the final
CY 2023 CMHC PHP geometric mean per diem cost is $135.68, which is
higher than the calculated CY 2023 CMHC PHP APC payment rate of
$131.94. However, the application of the OPPS standard methodology,
including the effect of budget neutralizing all other OPPS policy
changes unique to CY 2023, resulted in the final calculated CMHC PHP
APC payment rate being unexpectedly lower than the CY 2022 final CMHC
PHP APC rate. We believe this decrease in the calculated CY 2023 PHP
APC payment rate for CMHC providers is likely not an accurate
reflection of the cost of providing PHP services this year, since
geometric mean costs for those services have remained relatively
constant from CY 2022 to CY 2023. We are therefore concerned that the
CY 2023 calculated payment rate for the CMHC PHP APC would not pay
appropriately for those services and may result in access issues to PHP
services in CMHCs. We believe providers would not expect their
calculated final CY 2023 CMHC PHP APC payment rate to be significantly
lower than the CY 2022 CMHC PHP APC payment rate under the existing
payment methodology. In addition, as noted above, minimizing
significant fluctuations in CMHC PHP payments is important to
stabilizing the PHP program. Given the unique circumstances of CMHCs,
which are only considered a Medicare provider of services for PHP, we
are concerned that the decrease in the CMHC APC payment rate for CY
2023 that would occur if we were to finalize the final calculated rate
would not protect access for Medicare beneficiaries to PHP services in
CMHCs, and we have considered in this final rule an approach to
mitigate the proposed decrease in the CMHC PHP APC payment rate.
Therefore, in the interest of accurately paying for CMHC PHP services,
under the unique circumstances of budget neutralizing all other OPPS
policy changes this year, and in keeping with our longstanding goal of
protecting continued access to PHP services provided by CMHCs by
ensuring that CMHCs remain a viable option as providers of mental
health care in the beneficiary's own community, we are using the
equitable adjustment authority of section 1833(t)(2)(E) of the Act to
appropriately pay for CMHC PHP services. This equitable adjustment will
apply for only CY 2023 and not subsequent years.
Section 1833(t)(2)(E) of the Act provides that the Secretary shall
establish, in a budget neutral manner, other adjustments as determined
to be necessary to ensure equitable payments. As such, we are making an
adjustment under this authority to the final CY 2023 CMHC PHP APC
payment rate to more equitably and appropriately pay for CMHC PHP
services. For this final rule, while we are using the latest available
CY 2021 claims and the cost information from prior to the COVID-19 PHE,
as proposed, we are finalizing that the CY 2023 payment rate for the
CMHC APC is the same payment rate as for CY 2022, that is, $142.70,
because we believe CMHC providers would expect to manage their programs
to align with the CY 2022 CMHC APC payment of $142.70. We note that we
are applying this adjustment for CY 2023 only and not for subsequent
years.
Additionally, as mentioned above and discussed in greater detail in
section II.A.1.c of the CY 2023 OPPS/ASC proposed rule (87 FR 44510
through 44511), 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.\112\ 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.
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\112\ 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.
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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.
Therefore, consistent with the proposal at II.A.1.c of the CY 2023
[[Page 71997]]
OPPS/ASC proposed rule (87 FR 44510 through 44511) for other OPPS
services, we proposed 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 solicited 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.
We did not receive any public comments on whether there exist any
specific concerns with regards to the accuracy of the data from
nonstandard cost center lines that we would need to consider and are
finalizing as proposed 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.
a. CMHC Data Preparation: Data Trims, Exclusions, and CCR Adjustments
For this final rule with comment period, 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 proposed 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 final geometric mean per diem cost for
CMHC APC 5853, we prepared the data by first applying trims and data
exclusions and assessing CCRs as described in the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70463 through 70465), so that
ratesetting is not skewed by providers with extreme data. Before any
trims or exclusions were applied, there were 28 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, two CMHCs had a geometric
mean cost per day above the trim's upper limit of $470.86, and one CMHC
had a geometric mean cost per day below the trim's lower limit of
$39.72. Therefore, we are excluding data for ratesetting from these
three 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 final rule ratesetting, no CMHC was missing
wage index data for all of its service days and, therefore, no CMHC was
excluded. We also exclude providers without any days containing 3 or
more units of PHP-allowable services. One provider is excluded from
ratesetting because it had no days containing 3 or more units of PHP-
allowable services. In addition to our trims and data exclusions,
before calculating the PHP APC geometric mean per diem costs, we also
assess CCRs (80 FR 70463). Our longstanding PHP OPPS ratesetting
methodology defaults any CMHC CCR that is not available or any CMHC CCR
greater than one to the statewide hospital CCR associated with the
provider's urban/rural designation and their State location (80 FR
70463). For the CY 2023 OPPS/ASC final rule ratesetting, there was one
CMHC with a CCR greater than one, and seven CMHCs with missing CCR
information. Therefore, we are defaulting the CCRs for these eight
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 eight
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 three CMHCs for failing the 2 standard
deviation trim resulting in the inclusion of 24 CMHCs. There were 483
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 3,732 CMHC claims in
our CY 2023 final 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.\113\
The calculated CY 2023 geometric mean per diem cost for all CMHCs for
providing 3 or more services per day (CMHC APC 5853) is $135.68, an
increase from $129.93 calculated last year for CY 2022 ratesetting (86
FR 63667).
---------------------------------------------------------------------------
\113\ 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.
---------------------------------------------------------------------------
Comment: We received several comments expressing concern about the
proposed CY 2023 CMHC geometric mean per diem cost, which was $131.71.
Specifically, commenters noted the proposed CY 2023 geometric per diem
cost is a reduction from the CY 2021 geometric per diem cost, which was
used as a floor for ratesetting in the CY 2022 OPPS/ASC final rule with
comment period. One national association noted that the decrease in the
proposed CY 2023 PHP rates, coupled with inflation across the country
and labor costs for CMHCs, results in a gap between payments and costs
for providing partial hospitalization services, making it difficult for
these programs to continue operating. Some commenters recommended that
CMS apply a cost floor for CY 2023 equal to the CMHC geometric mean per
diem cost calculated for CY 2021.
Response: We appreciate the concerns that commenters raised and
recognize the importance of ensuring that PHP payment rates accurately
reflect the financial costs to providers of providing PHP services to
their communities. Under our longstanding methodology, the proposed and
final calculated geometric mean per diem costs are based on the actual
provider-reported claims and cost data and, therefore, we believe they
accurately represent the cost of providing PHP services.
[[Page 71998]]
As we noted in the CY 2023 OPPS/ASC proposed rule (87 FR 44663),
overall Medicare outpatient service volumes appear to be returning to
more normal pre-pandemic levels. As discussed in section X.D of the CY
2023 OPPS/ASC proposed rule (87 FR 44680 through 44682), 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 that 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 explained that we believe the more recently available CY
2021 claims data would better represent the volume and mix of claims
for the CY 2023 OPPS. Accordingly, we stated that we believe it is
appropriate to use CY 2021 data for purposes of CY 2023 OPPS
ratesetting. In order to mitigate the effects of the COVID-19 PHE on
the CMHC geometric mean per diem cost calculation, we proposed 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).
However, as we noted above, while the CY 2023 CMHC PHP geometric
mean per diem cost accurately represents the cost of providing PHP
services, we share commenters' concerns that the calculated final CY
2023 CMHC PHP APC payment rate of $131.94 is unexpectedly below the
final CY 2023 CMHC PHP geometric mean per diem costs of $135.68 and may
not support ongoing access to PHPs in CMHCs in CY 2023.
As we have stated in previous rules, our goal is to support ongoing
access to PHPs in CMHCs and, in furtherance of that goal, we have
historically established mitigation policies where we believe
fluctuations in PHP payments do not accurately reflect a commensurate
decrease in the cost of providing those services, particularly because
costs generally increase over time. We have also implemented mitigation
policies to stabilize CMHC PHP geometric mean per diem costs that would
otherwise change significantly from one year to the next; these have
been especially important in supporting the stability of the program
given the small number of CMHC PHP providers.
More specifically, as noted above, even though the final CY 2023
CMHC PHP geometric mean cost of $135.68 is nearly the same as the final
CY 2022 geometric mean cost floor of $136.14, the calculated payment
rates for the two years are substantially different, with the CY 2022
final payment rate being $142.70 and the proposed and final calculated
payment rates for CY 2023 being $130.54 and $131.94, respectively. In
addition, the final CY 2023 CMHC PHP geometric mean per diem costs is
$135.68, which is higher than the calculated CY 2023 CMHC PHP APC
payment rate of $131.94. However, the application of the OPPS standard
methodology, including the effect of budget neutralizing all other OPPS
policy changes unique to CY 2023, resulted in the final calculated CMHC
PHP APC payment rate being unexpectedly lower than the CY 2022 final
CMHC PHP APC rate. We believe this decrease in the calculated CY 2023
PHP APC payment rate for CMHC providers is likely not an accurate
reflection of the cost of providing PHP services this year, since
geometric mean costs for those services have remained relatively
constant from CY 2022 to CY 2023. We are therefore concerned that the
CY 2023 calculated payment rate for the CMHC PHP APC would not pay
appropriately for those services and may result in access issues to PHP
services in CMHCs. We believe providers would not expect their
calculated final CY 2023 CMHC APC rate to be significantly lower than
their calculated CY 2023 CMHC APC calculated costs using the existing
methodology. We believe CMHC providers would expect to manage their
programs to align with the CY 2022 CMHC APC payment of $142.70. As
such, we are making an adjustment to the final CY 2023 CMHC APC payment
to more equitably and appropriately pay for PHP services in CMHCs. This
adjustment will apply for only CY 2023 and not subsequent years.
Section 1833(t)(2)(E) of the Act states that the Secretary shall
establish, in a budget neutral manner, other adjustments as determined
to be necessary to ensure equitable payments. Using the authority set
forth in section 1833(t)(2)(E) of the Act, we are making an adjustment
to the final CY 2023 CMHC APC payment rate to more equitably and
appropriately pay for CMHC PHP services. This equitable adjustment will
apply for CY 2023 and not for subsequent years.
After consideration of the public comments we received, under the
authority set forth in section 1833(t)(2)(E) of the Act, we are making
an equitable adjustment to finalize $142.70 as the CY 2023 CMHC PHP APC
payment rate. We reiterate that we are applying this adjustment for
only CY 2023 and not for subsequent years.
b. Hospital-Based PHP Data Preparation: Data Trims and Exclusions
For the CY 2023 OPPS/ASC final rule, we prepared data consistent
with our policies as described in the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70463 through 70465) for hospital-based PHP
providers, which is similar to that used for CMHCs. However, as
discussed above, we proposed 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 425 hospital-based PHP providers for
our calculations in this CY 2023 OPPS/ASC final rule.
Consistent with our policies, as stated in the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70463 through 70465), we prepared
the data by applying trims and data exclusions. We applied a trim on
hospital service days for hospital-based PHP providers with a CCR
greater than 5 at the cost center level. To be clear, the CCR greater
than 5 trim is a service day-level trim in contrast to the CMHC 2 standard deviation trim, which is a provider-level trim. For
the CY 2023 OPPS/ASC final rule ratesetting, no hospital-based PHP
providers had a CCR greater than 5. Therefore, no hospital-based
provider was excluded as 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).\114\
---------------------------------------------------------------------------
\114\ Click on the link labeled ``CY 2023 OPPS/ASC Notice of
Final 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 NFRM 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
[[Page 71999]]
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).\115\ 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
$275.83, which is an increase from $253.02 calculated last year for CY
2022 ratesetting (86 FR 63668).
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\115\ 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.
---------------------------------------------------------------------------
Comment: We received several comments expressing concern about the
proposed CY 2023 hospital-based geometric mean per diem cost, which was
$264.06. Specifically, commenters noted that payment updates are
failing to keep pace with the growth in costs to deliver care, which
will impact access to PHP services and medically necessary treatment.
Several commenters noted that inflation across the country and rising
labor costs are affecting hospital-based PHP providers. Several
commenters noted that the CY 2023 hospital-based PHP cost per day was
higher than the cost per day calculated for CY 2022, but one national
association expressed concern that the proposed CY 2023 hospital-based
PHP payment rate was calculated without using a cost floor, as it had
been calculated in prior years.
Response: We appreciate the concerns that commenters raised and
recognize the importance of ensuring that PHP payment rates accurately
reflect the financial costs to providers of providing PHP services to
their communities. Under our longstanding methodology, the proposed and
final calculated geometric mean per diem costs are based on the actual
provider-reported claims and cost data and, therefore, we believe they
accurately represent the cost of providing PHP services.
With respect to the commenters' suggestions about continuing the
use of cost floors, we did not propose to apply this methodology for CY
2023 and we are not finalizing such a methodology in this final rule.
As we noted in the CY 2023 OPPS/ASC proposed rule (87 FR 44663),
overall Medicare outpatient service volumes appear to be returning to
more normal pre-pandemic levels. As discussed in section X.D of the CY
2023 OPPS/ASC proposed rule (87 FR 44680 through 44682), 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 that 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 explained that we believe the more recently available CY
2021 claims data would better represent the volume and mix of claims
for the CY 2023 OPPS. Accordingly, we stated that we believe it is
appropriate to use CY 2021 data for purposes of CY 2023 OPPS
ratesetting. In order to mitigate the effects of the COVID-19 PHE on
the hospital-based PHP geometric mean per diem cost calculation, we
proposed 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).
We further note that a cost floor would effectively have no impact
on the CY 2023 hospital-based PHP geometric mean per diem cost
calculation because both the proposed and final CY 2023 hospital-based
geometric mean per costs are higher than those calculated in either CY
2021 or CY 2022. As discussed earlier in this final rule with comment
period, we note that the proposed and final PHP payment rates are
calculated in accordance with the statutorily required relative payment
weight calculations under the OPPS. Accordingly, the CY 2023 hospital-
based PHP payment rate calculation depends not only on the geometric
mean per diem cost for PHP services, but also on the budget neutral
adjustments to the weight scaler as described in section II.A.4. of
this final rule and on the OPPS conversion factor described in section
II.B. of this final rule. As a result of those OPPS budget neutrality
adjustments, the proposed and final APC payment rates may be higher or
lower than their estimated APC geometric mean costs.
After consideration of the public comments we received, we are
finalizing our proposal to calculate the costs per day using CY 2021
claims data with cost report data through CY 2019 (prior to the PHE),
which is consistent with the approach recommended for the broader CY
2023 OPPS rate-setting. The calculated CY 2023 geometric mean per diem
cost for all hospital-based PHPs for providing three or more services
per day (APC 5863) is $275.83.
The final CY 2023 PHP geometric mean per diem costs are shown in
Table 63 and are used to derive the final CY 2023 PHP APC per diem
rates for CMHCs (subject to the equitable adjustment discussed earlier
in this section of this final rule) and hospital-based PHPs. The final
CY 2023 PHP APC per diem rates are included in Addendum A to this final
rule with comment period (which is available on our website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.html).
[[Page 72000]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.091
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.
As we discussed in the CY 2023 OPPS/ASC proposed rule (87 FR
44665), we received four comments in response to the April 30, 2020
interim final rule with comment regarding the interim final policy for
PHP. Detailed summaries and responses to these comments are found in
section XXII.B.4 of this CY 2023 OPPS/ASC final rule. In that section
of this final rule, we are confirming as final the interim policy set
forth in the April 30, 2020 interim final rule with comment.
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.\116\ 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. However, we note that section 1861(ff)(3)(A) of the Act,
which defines partial hospitalization services, 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.
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\116\ https://www.psychiatrist.com/jcp/covid-19/telehealth-treatment-patients-intensive-acute-care-psychiatric-setting-during-covid-19/.
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[[Page 72001]]
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 the CY 2023 OPPS/ASC proposed rule
(87 FR 44676 through 66479), we proposed 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 did not propose to recognize these proposed OPPS
remote services as PHP services, we clarified 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 reminded 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
is intended for patients who 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 reiterated 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), and Sec. 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 stated in the plan of care rather than in the actual hours of
therapeutic services a patient receives.
In accordance with these requirements, we stated that if the
proposal at section X.A.5 of the CY 2023 OPPS/ASC proposed rule were
finalized, we would 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. We
also noted that the medical documentation should continue to support
the patient's eligibility for participation in a PHP.
Lastly, we noted 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 did not propose 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, we stated that 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 of the CY 2023 OPPS/ASC
proposed rule were 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 CY 2023 OPPS/ASC proposed rule
(87 FR 44666 through 44667), we requested 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.
Comment: We received 17 comments in support of making remote
behavioral health services available to patients in PHPs. Commenters
noted that these services have not only been vital to ensure access to
mental health care during the COVID-19 PHE, but have also demonstrated
the general need for remote outpatient mental health services,
especially for rural communities. Specifically, commenters stated that
small rural hospitals have leveraged virtual care to meet the surging
demand of behavioral health needs in the communities they serve, which
has improved continuity of care and removed barriers to access mental
health care in these isolated and underserved communities. Two
commenters noted that remote services for PHP patients have been of
great value in improving access to behavioral health by removing
transportation, geographical, and adverse weather barriers that would
otherwise prohibit patients from receiving services. In addition, they
indicated remote services for PHP patients improve access for patients
with challenging diagnoses, including trauma, agoraphobia, and anxiety,
as well as provide access to medically complex patients who have
difficulty leaving their home for outpatient services.
Three commenters encouraged CMS to closely monitor the use of non-
PHP remote mental health codes for patients receiving PHP services.
These commenters also noted that under the proposed clarification,
remote behavioral health services would not be recognized as PHP
services, and they encouraged CMS to carefully monitor whether
clinicians are under the impression that these remote services may
count toward the required care for PHP patients. These commenters
further encouraged CMS to provide more specific instructions related to
the documentation requirement to 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.
Response: We thank commenters for their support. As some commenters
noted, we did not propose to recognize remote mental health services as
PHP services. In response to the concerns that commenters raised, we
are clarifying that non-PHP remote mental health services furnished to
a beneficiary in a PHP will not be counted as PHP services in the
determination of payment for a PHP day. When these services are
furnished to a beneficiary by a hospital, they will be paid at the
established APC payment amount as discussed in section X.A.5 of this
final rule. We also note that our longstanding OPPS policy limits 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 agree with commenters that remote non-PHP mental health services
can help address barriers related to transportation, adverse weather,
or other unforeseen circumstances. We clarified
[[Page 72002]]
in the CY 2023 OPPS/ASC proposed rule 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, including the proposed non-PHP remote mental health
services.
Although we will not recognize remote mental health services as PHP
services, we acknowledge that there will be circumstances when a
patient under a PHP plan of care may need to temporarily receive remote
mental health services. We are clarifying that remote mental health
services that are included in a PHP patient's plan of care will not
limit a patient's eligibility for continued participation in a PHP if
all other program requirements are met. That is, for a patient who
needs at least 20 hours per week of PHP services, we will consider
remote mental health services that are included in the patient's plan
of care to be consistent with the regulation at Sec. 410.43(c)(1),
which states that PHPs are intended for patients that require a minimum
of 20 hours per week of therapeutic services as evidenced in their plan
of care. As discussed in the CY 2023 OPPS/ASC proposed rule (87 FR
44666 through 44667) and earlier in this final rule, 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 stated in
the plan of care rather than in the actual hours of therapeutic
services a patient receives. Therefore, if a PHP patient receives non-
PHP mental health services remote services, we expect that the plan of
care will reflect such services, and we would not consider the
inclusion of such services in the plan of care to limit the patient's
eligibility for continued participation in a PHP to the extent that
other patient eligibility requirements are met. In accordance with
Sec. 410.43(c)(7), PHP is intended for patients who 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. For patients under a PHP plan of care that
receive remote services, the medical documentation should continue to
support the patient's eligibility for participation in a PHP. Regarding
comments about access for medically complex patients and those with
challenging diagnoses, we further note that the Medicare home health
benefit may be available to meet the needs of the kinds of patients
that commenters identified, provided all eligibility requirements are
met. The home health beneficiary eligibility requirements at Sec.
409.42 specify, among other requirements, that the beneficiary be
confined to the home; under the care of a physician or allowed
practitioner; be receiving services under a plan of care established
and periodically reviewed by a physician or allowed practitioner; need
skilled nursing care on an intermittent basis or physical therapy or
speech-language pathology; or have a continuing need for occupational
therapy. For more information on the home health benefit, we refer
readers to the Medicare Benefit Policy Manual, Pub 100-02, chapter 7.
Comment: One commenter requested CMS clarify that facility fees for
providing PHP services via telehealth will continue to be covered after
the end of the COVID-19 PHE.
Response: As we discussed earlier in this final rule, we did not
propose to recognize remote mental health services as PHP services. As
discussed in section XXII.B.4 of this final rule with comment period,
we are confirming as final that the flexibilities allowing PHP services
to be furnished remotely will apply only for the duration of the COVID-
19 PHE. Accordingly, facilities will not be permitted to bill for PHP
when services are provided remotely. However, hospital outpatient
departments will be permitted to bill for remote mental health services
on an individual basis and paid at the established APC payment amount
as discussed in section X.A.5 of this final rule with comment period.
In addition, as discussed in section XXII.B.5 of this final rule
with comment period, we are finalizing that when a patient is receiving
a professional service via telehealth in a location that is considered
a hospital PBD, and the patient is a registered outpatient of the
hospital, the hospital in which the patient is registered may bill the
originating site facility fee for the service. We are also finalizing
the applicability of section 603 of the BBA 2015 to hospitals
furnishing care in the beneficiaries' homes (or other temporary
expansion locations). Once the PHE for COVID-19 ends, these
flexibilities will end as well.
After consideration of the public comments we received, we are
finalizing the clarification that PHP patients can continue to receive
the full range of hospital outpatient services, including the new HCPCS
codes that describe mental health services furnished to beneficiaries
in their homes by clinical staff of the hospital. We are also
finalizing the clarification that for PHP patients, the plan of care
should be updated to reflect that remote services are being provided.
3. Request for Information Regarding Remote PHP Services Furnished by
Hospital Outpatient Departments and CMHCs During the COVID-19 PHE
In the CY 2023 OPPS/ASC proposed rule, we stated our interest 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 requested 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?
We stated that 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. We asked that comments identify the
question commenters are responding to, and include as much data as
possible that supports their responses.
We received 27 comments in response to the CY 2023 OPPS/ASC
proposed rule pertaining to the questions raised in the request for
information regarding remote PHP services furnished by hospital
outpatient departments and CMHCs during the COVID-19 PHE. Commenters
included members of national associations who overall responded that
the flexibilities of remote mental health services for PHP patients
during the COVID-19 PHE have allowed providers of PHP services to
maintain continuity of care for patients and expand their programs to
individuals otherwise outside of the provider's service area.
Commenters explained remote PHP services have most often been used when
patients are in quarantine due to contracting COVID-19, when patients
do not have
[[Page 72003]]
transportation to attend in-person services, and to reach individuals
living in an area without accessible PHP services.
We thank commenters for their detailed responses to this request
for information. We will take these comments into consideration to
potentially inform future policy development.
D. Outlier Policy for CMHCs
For 2023, we proposed to continue to calculate the CMHC outlier
percentage, cutoff point and percentage payment amount, outlier
reconciliation, outlier payment cap, and fixed dollar- threshold
according to previously established policies. These topics are
discussed in more detail. We refer readers to section II.G.1 of the CY
2023 OPPS/ASC proposed rule (87 FR 44533) for our general policies for
hospital outpatient outlier payments.
We did not receive any public comments on our proposal and are
finalizing as proposed.
1. Background
As discussed in the CY 2004 OPPS final rule with comment period (68
FR 63469 through 63470), we noted a significant difference in the
amount of outlier payments made to hospitals and CMHCs for PHP
services. Given the difference in PHP charges between hospitals and
CMHCs, we did not believe it was appropriate to make outlier payments
to CMHCs using the outlier percentage target amount and threshold
established for hospitals. Therefore, beginning in CY 2004, we created
a separate outlier policy specific to the estimated costs and OPPS
payments provided to CMHCs. We designated a portion of the estimated
OPPS outlier threshold specifically for CMHCs, consistent with the
percentage of projected payments to CMHCs under the OPPS each year,
excluding outlier payments, and established a separate outlier
threshold for CMHCs. This 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
the CY 2023 OPPS/ASC proposed rule (87 FR 44668), 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 the CY 2023 OPPS/ASC proposed rule (87 FR 44668), so any
provider's costs that exceed the CMHC outlier cap will have its
payments adjusted downward. After accounting for the CMHC outlier cap,
we sum all of the estimated outlier payments to determine the estimated
total CMHC outlier payments.
(Each Provider's Estimated Costs-Each Provider's Estimated
Multiplier Threshold) = A. If A is greater than 0, then (A x 0.50) =
Estimated CMHC Outlier Payment (before cap) = B. If B is greater than
(0.08 x Provider's Total Estimated Per Diem Payments), then cap
adjusted- B = (0.08 x Provider's Total Estimated Per Diem Payments);
otherwise, B = B. Sum (B or cap-adjusted B) for Each Provider = Total
CMHC Outlier Payments.
Step 3: We determine the percentage of all OPPS outlier
payments that CMHCs represent by dividing the estimated CMHC outlier
payments from Step 2 by the total OPPS outlier payments from Step 1:
(Estimated CMHC Outlier Payments/Total OPPS Outlier Payments).
We proposed to continue to calculate the CMHC outlier percentage
according to previously established policies, and we did not propose
any changes to our current methodology for calculating the CMHC outlier
percentage for CY 2023. Therefore, based on our CY 2023 payment
estimates, CMHCs are projected to receive 0.01 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.
We did not receive any public comments on our proposal and are
finalizing as proposed.
3. Cutoff Point and Percentage Payment Amount
As described in the CY 2018 OPPS/ASC final rule with comment period
(82 FR 59381), our policy has been to pay CMHCs for outliers if the
estimated cost of the day exceeds a cutoff point. In CY 2006, we set
the cutoff point for outlier payments at 3.4 times the highest CMHC PHP
APC payment rate implemented for that calendar year (70 FR 68551). For
CY 2018, the highest CMHC PHP APC payment rate is the payment rate for
CMHC PHP APC 5853. In addition, in CY 2002, the final OPPS outlier
payment percentage for costs above the multiplier threshold was set at
50 percent (66 FR 59889). In CY 2018, we continued to apply the same 50
percent outlier payment percentage that applies to hospitals to CMHCs
and continued to use the existing cutoff point (82 FR 59381).
Therefore, for CY 2018, we continued to pay for partial hospitalization
services that exceeded 3.4 times the CMHC PHP APC payment rate at 50
percent of the amount of CMHC PHP APC geometric mean per diem costs
over the cutoff point. For example, for CY 2018, if a CMHC's cost for
partial hospitalization services paid under CMHC PHP APC 5853 exceeds
3.4 times the CY 2018 payment rate for
[[Page 72004]]
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 proposed to continue to pay for partial hospitalization
services that exceed 3.4 times the proposed CMHC PHP APC payment rate
at 50 percent of the CMHC PHP APC geometric mean per diem costs over
the cutoff point. That is, for CY 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))].
We did not receive any public comments on our proposal and are
finalizing as proposed.
4. Outlier Reconciliation
In the CY 2009 OPPS/ASC final rule with comment period (73 FR 68594
through 68599), we established an outlier reconciliation policy to
address charging aberrations related to OPPS outlier payments. We
addressed vulnerabilities in the OPPS outlier payment system that lead
to differences between billed charges and charges included in the
overall CCR, which are used to estimate cost and would apply to all
hospitals and CMHCs paid under the OPPS. We initiated steps to ensure
that outlier payments appropriately account for the financial risk when
providing an extraordinarily costly and complex service, but are only
being made for services that legitimately qualify for the additional
payment.
For a comprehensive description of outlier reconciliation, we refer
readers to the CY 2019 OPPS/ASC final rules with comment period (83 FR
58874 through 58875 and 81 FR 79678 through 79680).
We proposed to continue these policies for partial hospitalization
services provided through PHPs for CY 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).
We did not receive any public comments on our proposal and are
finalizing as proposed.
5. Outlier Payment Cap
In the CY 2017 OPPS/ASC final rule with comment period, we
implemented a CMHC outlier payment cap to be applied at the provider
level, such that in any given year, an individual CMHC will receive no
more than a set percentage of its CMHC total per diem payments in
outlier payments (81 FR 79692 through 79695). We finalized the CMHC
outlier payment cap to be set at 8 percent of the CMHC's total per diem
payments (81 FR 79694 through 79695). This outlier payment cap only
affects CMHCs, it does not affect other provider types (that is,
hospital-based PHPs), and is in addition to and separate from the
current outlier policy and reconciliation policy in effect. In the CY
2020 OPPS/ASC final rule with comment period (84 FR 61351), we
finalized a proposal to continue this policy in CY 2020 and subsequent
years. In the CY 2023 OPPS/ASC proposed rule, we did not propose any
changes to this policy.
We did not receive any public comments on our proposal and are
finalizing as proposed.
6. Fixed-Dollar Threshold
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59267
through 59268), for the hospital outpatient outlier payment policy, we
set a fixed--dollar threshold in addition to an APC multiplier
threshold. Fixed-dollar thresholds are typically used to drive outlier
payments for very costly items or services, such as cardiac pacemaker
insertions. CMHC PHP APC 5853 is the only APC for which CMHCs may
receive payment under the OPPS, and is for providing a defined set of
services that are relatively low cost when compared to other OPPS
services. Because of the relatively low cost of CMHC services that are
used to comprise the structure of CMHC PHP APC 5853, it is not
necessary to also impose a fixed-dollar threshold on CMHCs. Therefore,
in the CY 2018 OPPS/ASC final rule with comment period, we did not set
a fixed-dollar threshold for CMHC outlier payments (82 FR 59381). This
same policy was also reiterated in the CY 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 proposed to continue this policy for
CY 2023.
We did not receive any public comments on our proposal and are
finalizing as proposed.
IX. Services That Will Be Paid Only as Inpatient Services
A. Background
Established in rulemaking as part of the initial implementation of
the OPPS, the inpatient only (IPO) list identifies services for which
Medicare will only make payment when the services are furnished in the
inpatient hospital setting because of the 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
[[Page 72005]]
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 covered
procedures 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 that, therefore, will not be paid by
Medicare under the OPPS, as well as the criteria we have used to review
the IPO list to determine whether 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. Changes to the Inpatient Only (IPO) List
Using the five criteria listed above, in the CY 2023 OPPS/ASC
proposed rule, for CY 2023, we identified 10 services described by the
following codes that we proposed 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 (e.g., 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;
[[Page 72006]]
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 (eg, 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 proposed 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 were displayed
in Table 46 (87 FR 44672).
As noted above, we proposed 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 believed
that this procedure met 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 proposed to assign CPT code 16036 to status indicator ``N''.
We solicited 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 proposed 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 believed CPT code 22632 met
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
proposed to assign CPT code 22632 to status indicator ``N''. We
solicited 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 proposed 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 stated that 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
proposed to remove them from the IPO list for CY 2023. We proposed to
assign these eight services to APC 5165--Level 5 ENT Procedures and
status indictor ``J1''. We solicited public comment on our conclusion
that the services described by CPT codes 21141, 21142, 21143, 21194,
21196, 21347, 21366, and 21422 met criteria 1, 2, and 3 and our
proposal to assign these services to APC 5165--Level 5 ENT Procedures
and status indicator ``J1''.
We proposed to add eight services described by codes that were
newly created by the AMA CPT Editorial Panel for CY 2023 to the IPO
list. The codes for these services, which will be effective on January
1, 2023, are CPT codes 15778, 22860, 49596, 49616, 49617, 49618, 49621,
and 49622. We note that these codes were referred to by the placeholder
codes 157X1, 228XX, 49X06, 49X10, 49X11, 49X12, 49X13, and 49X14
respectively in the CY 2023 OPPS/ASC proposed rule. After clinical
review of these services, we found that they require a hospital
inpatient admission or stay and we proposed to assign these services to
status indicator ``C'' for CY 2023. The CPT codes, long descriptors,
and the proposed CY 2023 payment indicators were displayed in Table 65.
Comment: We received several public comments in support of our
proposal to remove CPT codes 16036, 21141, 21142, 21143, 21194, 21196,
21347, 21366, 21422, and 22632 from the IPO list and for the proposed
status indicator and APC assignments for these codes for CY 2023. We
also received several comments in support of adding CPT codes 15778,
22860, 49596, 49616, 49617, 49618, 49621, and 49622 to the IPO list for
CY 2023. Multiple commenters urged CMS to continue its current process
of evaluating individual services against the five longstanding
criteria to determine if the services are appropriate to remove from
the IPO list. A few commenters also noted that they believed the
current policy allows for the flexibility for physicians and their
patients to choose the appropriate care and increases access to safe
and affordable care, along with reducing potential harm to Medicare
beneficiaries.
Three commenters specifically expressed support for removing CPT
codes 16036 and 22632 because they are add-on codes that are performed
with primary procedures that have previously been removed from the IPO
list. One commenter who supported our proposal to remove CPT code 22632
from the IPO list requested that we not assign the code to status
indicator ``N'', and instead provide separate payment for the code
because the commenters believe it is a device intensive procedure and
not providing separate payment would be problematic for providers.
Response: We thank commenters for their support.
We note that CPT code 22632 is an add-on code and will always be
performed with a primary procedure. Because of this, we believe that
assigning CPT code 22632 to status indicator ``N'' is the appropriate
assignment and we are finalizing our proposal to reassign CPT 22632 to
status indicator ``N'' for CY 2023.
Comment: We received one comment that encouraged CMS to reconsider
removing the proposed services from IPO list. The commenter stated that
the proposed services cannot be safely performed in an outpatient
setting
[[Page 72007]]
because they require the care and services available in the inpatient
setting. The commenter believed that removing the proposed services
would cause these services to be performed at lower levels of care than
appropriate for the patients.
We also received one comment that opposed removing CPT code 16036
from the IPO list and recommended keeping the service on the list. The
commenter stated that this service was typically provided in the
operating room or emergency department if required, but is not widely
performed in the hospital outpatient department setting and would not
be performed in an ASC. They noted that for 2020, 84 percent of
Medicare claims for this service had inpatient hospital status while 8
percent of claims for this service were outpatient, which they believed
represented the patients who received emergency treatment and then were
sent to an outpatient burn center after stabilization. The commenter
also expressed concern that claims submitted for both CPT code 16036
and its primary procedure of CPT code 16035 were being miscoded as
being performed in a non-facility setting, which could give the false
impression that these services can safely be performed in an outpatient
or non-facility setting and should therefore be removed from the IPO
list.
Response: We thank commenters for their feedback. In regard to the
stakeholder's concerns about removing CPT code 16036, after further
review, we agree with the stakeholder that this service would typically
be performed in the inpatient setting. For this reason, we are not
finalizing our proposal to remove CPT code 16036 from the IPO list and
instead will continue to assign CPT code 16036 to a status indicator
assignment of ``C''.
We disagree that CPT codes 21141, 21142, 21143, 21194, 21196,
21347, 21366, 21422, and 22632 cannot be safely furnished in the
outpatient setting. As noted above, our clinical review found that
these procedures were appropriate to remove from the IPO list. In
regards to the stakeholders' concern that Medicare beneficiaries would
receive these services at lower levels of care, we note that, as stated
above, 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. The comments we received were
generally in support of removing these services, with commenters noting
that they believed the services could be appropriately furnished in the
outpatient setting. We did not receive any additional supportive
evidence or arguments that further explained why these procedures could
not be performed in the hospital outpatient department setting. Given
these reasons, we are finalizing our proposal to reassign CPT codes
21141, 21142, 21143, 21194, 21196, 21347, 21366, and 21422 and to
status indicator ``J1'' and APC 5165. We are also finalizing our
proposal to reassign CPT code 22632 to status indicator ``N''.
Comment: We received three comments requesting that CMS remove CPT
code 47550 (Biliary endoscopy, intraoperative (choledochoscopy) (List
separately in addition to code for primary procedure)) from the IPO
list and reassign it to status indicator ``N''. The commenters stated
that this add-on code is only reported as secondary to a primary
procedure and allows for direct visualization and identification of
abnormalities of tortuous anatomy and aids in the facilitation of the
primary procedure, including diagnostic brushing/washing, biopsy, stone
removal, strictures, and stenting within the biliary tract. The
commenters noted that this service is associated and performed with
several primary procedures that are not on the IPO list, including
those described by CPT codes 47553 through 47541. Additionally, the
commenters cited multiple studies that supported that this service can
be performed safely in the outpatient setting. The commenters added
that while the literature showed that the outpatient setting was not
appropriate for all patients for this service, it needs to be an
accessible site of service option. Additionally, the commenters noted
that Medicare claims data show that this service has been billed by
physicians in the outpatient setting, with 21.5% of physician claims
being performed in the outpatient setting in CY 2020. The commenters
argued that removing CPT code 47550 from the IPO list would increase
access for Medicare beneficiaries and allow providers to determine the
most appropriate site of service. Furthermore, this issue was presented
at the 2022 HOP Panel, with the Panel recommending that CPT code 47550
be removed from the IPO list.
Response: We thank commenters for their feedback. After further in-
depth review of the evidence provided, we agree with the commenters
that this service meets criteria 3 in our regulation text at Sec.
419.23(b)(3) because the service or procedure is related to codes that
CMS has already removed from the IPO list and can be appropriately
removed from the IPO list. We are reassigning CPT code 47550 to status
indicator ``N'' for CY 2023.
Comment: One commenter requested that CMS also remove CPT codes
21188, 21255, 21343, 21344, 21348, 21423, and 21436 from the IPO list,
stating that these procedures can be performed outside of the inpatient
setting similarly to proposed CPT codes 21141, 21142, 21143, 21194,
21196, 21347, 21366, and 21422. The long descriptors for the requested
codes are listed in Table 64 below.
BILLING CODE 4120-01-P
[[Page 72008]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.092
Response: We thank the commenter for their feedback. After further
review of the recommended codes, we agree with the stakeholder that the
service described by CPT code 21255 can be appropriately removed from
the IPO list and 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. We are reassigning CPT code 21255 to status indicator ``J1'' and
APC 5165--Level 5 ENT Procedures, and continuing to assign CPT codes
21188, 21343, 21344, 21348, 21423, and 21436 to status indicator ``C''
for CY 2023.
Comment: We received two comments requesting that CMS reconsider
reversing the elimination of the IPO list that was finalized in the CY
2021 OPPS/ASC final rule with comment period. These commenters stated
that they supported the elimination of the IPO list to allow for
greater site-of-service flexibility. One commenter believed that
physicians are in the best position to determine whether a procedure
can be performed appropriately in the hospital outpatient setting or
whether inpatient care is necessary. They continued to state that they
believe that physician judgment, along with licensure and accreditation
requirements, provide appropriate safeguards. Additionally, one
commenter noted that innovations in medicine would lead to a less
distinct difference between the need for inpatient care and the
appropriateness of outpatient care.
Response: We thank the commenters for their feedback. We are not
considering eliminating the IPO list at this time. As stated in the CY
2022 OPPS/ASC final rule with comment period, we believe the IPO list
is a valuable tool for ensuring that the OPPS only pays for services
that can safely be performed in the hospital outpatient setting and
remains a necessary safeguard. In that final rule, we explained that we
recognized that while physicians are able to make safety determinations
for a specific beneficiary, CMS is in the position to make safety
determinations for the broader population of Medicare beneficiaries,
that is, the typical Medicare beneficiary. Furthermore, we explained
that while we want to afford physicians and hospitals the maximum
flexibility in choosing the most clinically appropriate site of service
for the procedure, as long as the characteristics of the procedure are
consistent with the criteria listed above. For further discussion on
our decision to halt the elimination of the IPO list, we refer readers
to the CY 2022 OPPS/ASC final rule with comment period (86 FR 63671
through 63711).
Comment: We received two comments urging CMS to develop guidance on
which patients are appropriate candidates for receiving services in the
inpatient setting versus the outpatient setting. Commenters specified
that they would like guidance on which patients would be reasonable
candidates for same-day discharge. The commenters state that they
believe this would mitigate denials from payers and that
[[Page 72009]]
establishing guidance would not limit clinician decision-making as they
would still able to provide supporting clinical documentation to
justify inpatient stays for patients that may otherwise be candidates
for outpatient surgery.
Response: We thank the commenters for their feedback. In the CY
2022 OPPS/ASC final rule with comment period, we noted the balance
between several factors on this important issue, namely, the
prohibition on CMS interfering with the practice of medicine in Section
1801 of the Social Security Act, the need to provide clear information
about CMS billing and payment rules that ensure hospitals, physicians,
and other stakeholders can understand and operate within them, and that
the specific decision about the most appropriate care setting for a
given surgical procedure is a complex medical judgment made by the
physician based on the beneficiary's individual clinical needs and
preferences and on the general coverage rules requiring that any
procedure be reasonable and necessary (86 FR 63675).
We also noted that the Beneficiary and Family-Centered Care Quality
Improvement Organizations (BFCC-QIOs) are contracted by CMS to review a
sample of Medicare fee-for-service (FFS) short-stay inpatient claims
(claims with hospital stays lasting less than 2 midnights after formal
inpatient admission) for compliance with the 2-midnight rule. In the CY
2022 OPPS/ASC final rule with comment period (86 FR 63736 through
63740), we reinstated a two-year period of exemption from certain BFCC-
QIO medical review activities for procedures newly removed from the IPO
list where the length of stay after inpatient admission is less than 2
midnights. During the exemption period, BFCC-QIOs may conduct medical
reviews for education purposes but will not deny claims or make
referrals to recovery audit contractors (RACs) for noncompliance with
the 2-midnight rule for procedures that are removed from the IPO list
within the first 2 years of their removal. This exemption period is
intended to allow providers time to become more familiar with the
application of the 2-midnight rule to procedures newly removed from the
IPO list, and allows the BFCC-QIOs the opportunity to provide education
regarding application of that payment policy to such procedures. We
also noted that we plan to use our experience gained through BFCC-QIO
reviews to engage stakeholders to determine if developing additional
materials for services that are newly removed from the IPO list would
be helpful. We reiterate that any such materials will not supersede
physicians' medical judgment about whether a procedure should be
performed in the inpatient or outpatient hospital setting. For further
discussion on this issue, we refer readers to the CY 2022 OPPS/ASC
final rule with comment period (86 FR 63674 through 63675).
In summary, after consideration of the public comments we received,
we are finalizing our proposal to remove CPT codes 21141, 21142, 21143,
21194, 21196, 21347, 21366, and 21422 from the IPO list and reassign
them to status indicator ``J1'' and APC 5165 beginning in CY 2023. We
are also finalizing our proposal to remove CPT code 22632 from the IPO
list and reassign the service to status indicator ``N''. We are not
finalizing our proposal to remove CPT code 16036 from the IPO list and
will continue to assign CPT code 16036 to status indicator ``C''.
Finally, we are removing CPT code 47550 and reassigning it to status
indicator ``N'' and removing CPT code 21255 and reassigning it to
status indicator ``J1'' and APC 5165--Level 5 ENT Procedures. Table 65
below contains the 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 final rule with comment period, which is available
via the internet on the CMS website.
[[Page 72010]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.093
[[Page 72011]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.094
[[Page 72012]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.095
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. Sections 1834(m)(4)(D) and (E) of the
Act specify the types of health care professionals who 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
[[Page 72013]]
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 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. We note that
this policy is being finalized elsewhere in this final rule with
comment period.
3. Comment Solicitation in the CY 2022 OPPS/ASC Proposed 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
[[Page 72014]]
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.\117\ 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%)''.\118\
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\117\ https://www.cdc.gov/mmwr/volumes/69/wr/mm6932a1.htm.
\118\ https://www.cdc.gov/mmwr/volumes/70/wr/mm7013e2.htm.
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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,\119\ with overdose death rates surging among
Black and Latino Americans.\120\ 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.\121\ 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.\122\
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\119\ https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.
\120\ 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.
\121\ https://www.cdc.gov/nchs/nvss/vsrr/drug-overdose-data.htm.
\122\ 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/.
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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.\123\
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\123\ https://www.commonwealthfund.org/blog/2020/using-telehealth-meet-mental-health-needsduring-covid-19-crisis.
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5. CY 2023 OPPS Payment 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 Federally
Qualified Health Centers (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.
[[Page 72015]]
Therefore, we proposed 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 proposed to create OPPS-specific coding
to describe these services. The proposed code descriptors specified
that the beneficiary must be in their home and that there is no
associated professional service billed under the PFS. We noted 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 proposed 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
(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 solicited
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. Please see Table 66 for the final codes
and their descriptors.
[GRAPHIC] [TIFF OMITTED] TR23NO22.096
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 proposed to assign placeholder 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 explained that 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. We noted that if we use
these PFS payment rates to approximate the costs associated with
furnishing C7900 and C7901, 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 C7902 is an add-on code, payment
would be packaged; and the code would not be assigned to an APC. See
Table 67 for the final SI and APC assignments and payment rates for
HCPCS codes C9700-C7902 (placeholder HCPCS codes CXX78-CXX80 in the
proposed rule).
[[Page 72016]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.097
We solicited 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 stated that 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 invited
additional information from commenters on all aspects of this proposal.
We stated that we will also monitor uptake of these services for any
potential fraud and/or abuse. Finally, we noted this proposal would
also allow these services to be billed by CAHs, even though CAHs are
not paid under the OPPS.
Comment: Many commenters supported our proposal to designate mental
health services furnished by hospital staff to beneficiaries in their
homes through communication technology as covered OPD services.
Commenters stated that this policy would permit beneficiaries to
maintain access to mental health services furnished through PHE-
specific flexibilities and that it has the potential to even expand
access, particularly in areas where there is a shortage of in-person
mental health care. A few commenters requested that CMS allow other
services, such as services provided for the treatment of
immunocompromised patients, to be furnished by hospital staff to
beneficiaries in their homes through the use of telecommunications
technology for other types of services beyond those described by the
proposed HCPCS codes.
Response: We thank commenters for their support for this proposal.
We will consider any expansions to this policy for future rulemaking.
Comment: Some commenters supported the creation of Medicare-
specific HCPCS codes to describe these services, while others stated
that the use of C-codes was confusing because existing CPT codes
described similar services and did not represent the whole range of
mental health services and staff that furnish them in a HOPD. Some
commenters recommended that CMS use existing CPT codes and create a
modifier to identify when the service is furnished remotely to a
beneficiary in their home.
Response: We thank commenters for their support. While we
understand that there may be some challenges surrounding when it would
be appropriate to bill a Medicare-specific C-code where there are
existing CPT codes that describe a similar service, however we believe
that creating new codes rather than relying on existing CPT codes will
reduce confusion because the CPT codes could also be billed by the
hospital to account for the costs hospitals incurred when there is an
associated professional service. Furthermore, creation of Medicare-
specific coding will allow CMS to monitor these services and make
refinements to the coding to more accurately reflect clinical practice.
Comment: A few commenters supported the proposed payment rates,
while many others stated that the proposed rates did not accurately
capture all of the costs to the hospital of providing these services.
These commenters stated that, even if the beneficiary is not physically
in the hospital, the hospital would still be accruing costs associate
with staffing and technology and that using the facility payment rate
under the PFS is inappropriate and would not account for the additional
costs to the hospital of providing these services. Some commenters
supported the use of the facility payment rate under the PFS to inform
the APC-assignment of these services but recommended that CMS compare
them to CPT codes 90832 (Psychotherapy, 30 minutes with patient)
through 90838 (Psychotherapy, 60 minutes with patient when performed
with an evaluation and management service (List separately in addition
to the code for primary procedure)), as the commenters believe these
codes better reflect the work and costs associated with care, which are
consistent across physician office and hospital settings.
Response: We continue to believe that the resources associated with
hospital staff furnishing mental health services to beneficiaries in
their homes through telecommunications technology is better accounted
for through the facility payment rate under the PFS, and that using
this payment rate to inform the APC assignment is a reasonable
methodology until such time as we have claims data for these services.
We acknowledge that there are likely costs to the hospital other than
the time of the hospital staff providing the service, including the
amount of infrastructure needed to provide the service; however, we
believe these costs are likely
[[Page 72017]]
minimal given that the beneficiary is in their home and not in the
hospital.
Regarding the alternative codes commenters suggested we use to make
appropriate APC assignments for the proposed C codes, we note that we
do not believe the OPPS rates for these services serve as an
appropriate crosswalk for the new mental health codes because these
psychotherapy codes are for services performed at the hospital, not
remotely.
Comment: Most commenters recommended that CMS revise the
requirements at 42 CFR 410.27(a)(1)(iii) and (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 to remove references to the services
being ``in'' the hospital. These commenters stated that this would
allow for maximum flexibility for practitioners and could increase
access to mental health services. One commenter requested clarification
as to whether the supervising physician would have to be physically
located at the hospital to meet general supervision requirements.
Response: We appreciate the additional information provided by
commenters. We agree that not requiring the staff providing the mental
health service to the beneficiary in their home to be physically in the
hospital would likely maximize flexibility, particularly in areas where
there is a shortage of healthcare practitioners. Therefore, we are
finalizing an amendment to 42 CFR 410.27(a)(1)(iii) to add the phrase
``except for mental health services furnished to beneficiaries in their
homes through the use of communication technology'' and Sec.
410.27(a)(1)(iv)(A) to add the phrase ``or through the use of
communication technology for mental health services.'' 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.
Comment: A few commenters requested that CMS clarify that when
these services are furnished by hospitals that are owned or operated by
the Indian Health Service, Indian Tribes, or Tribal Organizations, they
are also covered, but will be paid at the applicable OMB rate that is
established and published annually by the Indian Health Service rather
than under the OPPS, in accordance with 42 CFR 419.20(b) and CMS's
longstanding practice.
Response: IHS facilities may be paid at the applicable all
inclusive payment rate established and published annually by the Indian
Health Service rather than under the OPPS, in accordance with 42 CFR
419.20(b) when billing for these services.
After consideration of the public comments we received, we are
finalizing as proposed to assign HCPCS codes C7900 and C7901 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 are finalizing our proposal with
modification to clarify at 42 CFR 410.27(a)(1)(iii) and (a)(1)(iv)(A)
that mental health services provided to beneficiaries in their homes
through communication technology are exempt from the requirement that
therapeutic hospital or CAH services must be furnished in a hospital or
CAH or in a department of the hospital or CAH.
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 6 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 under the PFS, and mental
health services furnished remotely under the OPPS, we proposed 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 proposed 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
Consolidated Appropriations Act, 2022 (CAA, 2022), delayed until
[[Page 72018]]
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 proposed that the in-person
visit requirements would not apply until the 152nd day after the PHE
for COVID-19 ends.
Comment: A few commenters supported requirements for in-person
visits; however, most opposed the proposal, particularly to require an
in-person visit within 6 months prior to the first telehealth service.
Commenters stated that CMS should defer to the clinical judgement of
the treating practitioner, who is in the best position to understand
the individual needs of their patients. Commenters appreciated that CMS
proposed to allow exceptions to the subsequent 12-month visit
requirement 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.
Response: In section II.D.1.e of the CY 2023 PFS final rule
entitled ``Implementation of Telehealth Provisions of the Consolidation
Appropriations Acts, 2021 and 2022'', CMS clarifies that for purposes
of the requirement that an in-person visit required within 6 months
prior to the initial mental health telehealth services, this
requirement does not apply to beneficiaries who began receiving mental
health telehealth services in their homes during the PHE or during the
151-day period after the end of the PHE. The requirement for an in-
person visit within 6 months of the initial telehealth mental health
services takes effect only for telehealth mental health services
beginning after the 152nd day after the end of the PHE. For reasons
stated in the proposed rule, we believe it is important to maintain
similar standards for mental health services furnished to beneficiaries
in their homes through the use of telecommunications systems paid under
OPPS. Therefore, we are making the same clarification; however, for
patients newly receiving mental health services furnished remotely
post-PHE, we continue to believe that the initial in-person visit
within 6 months prior to the first remote mental health service is
crucial to ensure the safety and clinical appropriateness of the
following remote mental health services. We also reiterate that for
both patients who began receiving mental health services in their homes
during the PHE and those who began treatment post-PHE, we expect that
these beneficiaries will receive an in-person, non-telehealth service
every subsequent 12 months and that exceptions to this requirement will
be documented in the patient's medical record.
After consideration of the public comments we received, we are
finalizing as proposed, and clarifying that beneficiaries who began
receiving mental health telehealth services in their homes during the
PHE or the 151-day period after the end of the PHE before the in-person
visit requirements take effect do not need to have an in-person, non-
telehealth service within 6 months prior to receiving mental health
service in their homes. Instead, the requirement to receive an in-
person visit within 12 months of each remote mental health telehealth
service would apply.
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 \124\ and the existence of areas and populations where
there is limited access to broadband due to geographic or socioeconomic
challenges, 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 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 would 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.
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\124\ https://bhw.hrsa.gov/data-research/review-health-workforceresearch.
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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 proposed a similar
[[Page 72019]]
policy for mental health services furnished remotely by hospital
clinical staff to beneficiaries in their homes through communications
technology. Specifically, we proposed 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.
Comment: Commenters were very supportive of CMS's proposal to allow
for audio-only communication technology in instances where the
beneficiary did not have access to, or did not wish to use, two-way,
audio/video communication technology. A few commenters disagreed with
CMS's proposal to require the practitioner to have the capacity to
furnish services via two-way, audio/video, stating that this may be
problematic for practitioners in rural areas or areas without access to
reliable broadband.
Response: As we stated in the CY 2022 PFS final rule, because
services furnished via communication technology are generally analogous
to and must include the elements of the in-person service, it is
generally appropriate to continue to require the use of two-way, real-
time audio/video communications technology to furnish the services (86
FR 65061-65062). Therefore, we are maintaining the requirement that
hospital staff must have the technical capability to use an interactive
telecommunications system that includes two-way, real-time, interactive
audio and video communications at the time that an audio-only mental
health service is furnished.
After consideration of the public comments we received, we are
finalizing our proposal regarding use of audio-only communications
technology as proposed.
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 section
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.\125\
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\125\ https://store.samhsa.gov/sites/default/files/SAMHSA_Digital_Download/pep20-02-01-021.pdf.
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We solicited 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 welcomed 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.
Comment: Commenters were generally supportive of CMS providing
payment for IOP services. Some commenters stated that existing HCPCS
coding was adequate to describe IOP services, while other commenters
stated that it was necessary for the OPPS to create Medicare-specific
coding to describe these services.
Response: We thank commenters for the information provided and will
consider their input for future rulemaking.
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
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
[[Page 72020]]
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
solicited comment on whether we should continue to allow direct
physician supervision for these services to include presence of the
supervising practitioner via two-way, audio/video communication
technology through the end of CY 2023. We also solicited 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.
Comment: We received many comments describing the value of
rehabilitation services furnished to beneficiaries in their homes.
Commenters requested that CMS maintain both the Hospitals Without Walls
flexibility to make beneficiaries' homes provider-based departments of
the hospital, and the definition of direct supervision to include the
presence of the supervising practitioner through two-way, audio/video
communication technology. Commenters requested that these changes be
made permanent or, at the very least, maintained through the end of CY
2023.
Response: We thank commenters for the additional information. We do
not have the flexibility to continue HWW beyond the conclusion of the
PHE as it was accomplished through PHE-specific waivers that will
expire when the PHE ends. This means that, following the expiration of
the PHE, pulmonary, cardiac, and intensive cardiac rehabilitation
services will no longer be able to be provided in a beneficiary's home.
However, we note that the CPT codes describing cardiac, pulmonary, and
intensive cardiac rehabilitation services were added to the Medicare
telehealth services list in the CY 2022 PFS final rule. This will allow
beneficiaries who live in rural areas to continue to receive these
services through telehealth at medical facilities from 152 days after
the conclusion of the PHE until the end of 2023 and beneficiaries in
non-rural areas and at home to receive these services via telehealth
for 151 days post-PHE. In the interest of maintaining a similar policy
under the OPPS, we are finalizing extending the revised definition of
direct supervision to include the presence of the supervising
practitioner through two-way, audio/video when the beneficiary is
physically located in the hospital until December 31, 2023.
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 the CY 2023 OPPS/ASC proposed rule
(87 FR 44504), 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
[[Page 72021]]
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 proposed rule 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 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 continued 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 continued 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 extended across
claims volume and applies to a majority of the clinical APCs in the
OPPS, suggesting that, while clinical and billing patterns had not
quite returned to their pre-PHE levels, they were beginning to do so.
Similar to what we observed in CY 2022 OPPS ratesetting, we
continued 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 available for proposed rule ratesetting, we saw a slight
decline in volume to about 1.6 million services and noted that we would
expect slightly more claims in the final rule data. Our view was 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 were 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 the CY 2023 OPPS/ASC proposed rule (87 FR 44681), there
were 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 (Level 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
did 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 was based on 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
volume 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
had 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
recognized that future COVID-19 variants may have potentially varying
effects. Therefore, we explained that we believe it is reasonable to
assume that there would 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 proposed to use the CY 2021
claims for CY 2023 OPPS ratesetting.
We proposed to use cost report data for the CY 2023 OPPS/ASC
proposed rule (87 FR 44681) 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 2023 OPPS/APC
relative weights (as
[[Page 72022]]
discussed in greater detail in section II.E of the CY 2023 OPPS/ASC
proposed rule (87 FR 44681 through 44682)). 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 was appropriate to
continue to use the same set of cost reports that we used in developing
CY 2022 OPPS ratesetting, so as to mitigate the impact of that 2020-
based data. We noted that we would 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 proposed 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 the CY 2023 OPPS/ASC proposed
rule (87 FR 44681).
As a result of our expectation that the CY 2021 claims that we
would typically use would be appropriate for establishing the CY 2023
OPPS, we proposed to use the CY 2021 claims for the CY 2023 OPPS/ASC
ratesetting process. However, we proposed to use the cost reports from
the June 2020 cost report extract, which contain only pre-PHE data, to
remove the effect of the PHE cost report data on estimated service
cost. In addition, we proposed to exclude from ratesetting claims that
would be used to model the estimated cost of HCPCS code C9803 in the CY
2023 OPPS/ASC proposed rule (87 FR 44681).
We also considered 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 made
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 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 were identified by the word ``Alternative'' in the
filenames, similar to our approach in the CY 2022 OPPS/ASC proposed and
final rules. We noted that the primary change as a result of the
alternative proposed methodology would be in the scaled weights, which
were 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 are located.
Comment: Many commenters supported our proposed policy to use CY
2021 claims data and the June 2020 cost report extract in CY 2023 OPPS
ratesetting, believing that it was based on reasonable assumptions that
recognize the unusual nature of CY 2020 claims and cost reports. These
commenters generally also opposed the alternative methodology in which
we would revert to our typical cost report data update.
Response: We appreciate the commenters' support for our proposal.
Comment: Three commenters believed that we should use more updated
data in CY 2023 ratesetting, with one noting the option of using the
December 2020 HCRIS extract, one requesting that we use our typical
update process, and another recommending an update that would use Q3
2022 data. Another commenter agreed with our proposal to set CY 2023
OPPS rates using 2021 claims and the June 2020 HCRIS extract but
believed that a growth estimate/cost inflation adjuster should be
applied.
Response: We have concerns about using each of the types of updated
data commenters suggested, whether that data is from the cost report
extract or claims. While more updated cost report data is available, it
has more overlap between the cost reporting periods and the PHE,
meaning that using those estimated cost to charge ratios, particularly
those with cost reporting periods in 2020, may reflect changes that may
not persist in CY 2023 or accurately approximate the CY 2023 outpatient
experience. In addition, the June 2020 HCRIS extract is one that we
have used in prior cycles and maintains stability in the cost
estimation process. While we are using updated CY 2021 claims data, we
recognize that there are PHE-related cost report issues, because cost
report data usually lag the claims data by a year. Because of similar
concerns as those we expressed in the CY 2022 OPPS/ASC final rule (86
FR 63751 through 63754) about the impact of the PHE on our cost report
data and as a result, our ratesetting process, we proposed to use the
June 2020 HCRIS extract. We note that the commenter's request to use
more recent cost report data was associated with a specific service and
its estimated costs under that alternative. However, we must consider
the effect of use of a particular cost report extract on the relative
weights and estimated geometric mean costs for all services, not just
certain ones. For these reasons, we continue to believe that the June
2020 HCRIS extract is appropriate for calculating the CCRs used in CY
2023 OPPS ratesetting because this set of cost report CCRs maintains
consistency with cost report data we have previously used in
ratesetting and mitigates some of the volatility and effects of the PHE
on our data process, as we noted in the CY 2022 OPPS/ASC final rule (86
FR 63751 through 63754) and CY 2023 OPPS/ASC proposed rule (87 FR 44680
through 44682).
With regard to using more updated claims data, we note that there
are two issues. First, we base the ratesetting on a full calendar year
of claims because the OPPS operates on a calendar year basis. Using
more than a single calendar year of claims would potentially distort
the volume of how services are represented as a portion of that
calendar year. Second, if we were to solely establish rates based on
available CY 2022 claims we would have a substantially smaller set of
claims available on which to estimate service cost. Therefore, we do
not believe it is appropriate to use more updated data beyond what we
have historically used, which are claims data from two years prior to
the prospective year for which we are setting OPPS rates.
While we appreciate the request to return to the typical claims and
cost report update process for ratesetting, there are issues with using
that data because the data may reflect cost volatility and practice
patterns specific to the PHE as noted in the CY 2023 OPPS/ASC proposed
rule (87 FR 44680 through 44682). As more claims and cost report data
become available over time, we will continue to review them
[[Page 72023]]
and their appropriateness for use in OPPS ratesetting.
We do not agree with the suggestion that we should apply a growth
estimate or cost inflation factor. As explained in the CY 2022 OPPS/ASC
final rule with comment period (86 FR 63751 through 63754) and in the
CY 2023 OPPS proposed rule (87 FR 44680 through 44682), we recognize
that there are effects of the PHE on our claims and cost report data.
We have tried to utilize a reasonable approach in addressing them
through the policies we use for ratesetting. If we were to apply a
growth estimate or cost inflation factor consistently across all
available cost data for all services, it would not have any impact
because the OPPS relative weights would remain the same. If we were to
apply a cost inflation factor only to specific services, it would
potentially distort the accuracy of the relative weights. Therefore, we
do not believe it is appropriate to apply an additional cost inflation
factor to the cost reports we use for CY 2023 OPPS ratesetting.
We recognize that there are effects on the claims and cost report
data as a result of the PHE and have applied an approach that accounts
for what were some of the more significant effects of them on our data.
We do not believe that it is appropriate to include those cost report
data, which create significant cost volatility in our CY 2023 OPPS
ratesetting process.
Comment: A commenter requested that CMS continue the use of HCPCS
code C9803 after the end of the PHE, due to concerns around the degree
to which hospitals would make the service available if OPPS payment is
not available for it. The commenter also suggested that some portion of
claims, based on projections relative to CY 2020 levels of the service,
be used for ratesetting purposes.
Response: While we recognize the concern regarding the availability
of the service after the PHE, the temporary nature of the code and its
specific association with the duration of the PHE suggests that it is
unlikely to be necessary for a separate specimen collection payment
after the conclusion of the PHE. HCPCS code C9803 was created
specifically to support collection of COVID-19 testing specimens by
hospitals during the COVID-19 PHE. Once the PHE ends, we believe it
will appropriate to pay for the collection of COVID-19 specimens as
part of the COVID-19 testing payment, which is consistent with how
payment for other laboratory tests is structured. As discussed in the
CY 2023 OPPS/ASC proposed rule (87 FR 44681) the volume of claims of
this code in APC 5731 (Level 1 Minor Procedures) are such that they
would dictate the payment rate. Given that separate payment for this
code is only to be made during the PHE, we do not believe including the
claims data for this code in establishing CY 2023 payment rates would
be appropriate. As a result, we continue to believe that it is
appropriate to exclude these claims from CY 2023 OPPS ratesetting.
Comment: A commenter agreed that including the C9803 data in CY
2023 OPPS ratesetting was not appropriate. That commenter noted that,
contrary to the proposal to exclude C9803 from CY 2023 OPPS
ratesetting, that data was included in ratesetting for APC 5731 (Level
1 Minor Procedures). The commenter's recommendation was that CMS either
exclude the data from C9803 from ratesetting to ensure an accurate
payment rate or consider establishing a second APC from the codes in
the APC, based on distinguishing the two separate APCs based on
differences in geometric mean cost between the services in the APC.
Response: We appreciate the commenter's support for our proposal
and note that while we proposed to remove the data from CY 2023 OPPS
ratesetting, we inadvertently included the cost and volume data for
C9803 in establishing the proposed CY 2023 OPPS payment rate for the
APC to which it was assigned. HCPCS code C9803 is a temporary code that
was created to support increased testing solely during the COVID-19
PHE. Because it is a temporary code that will no longer be utilized
after the PHE ends, we believe that it is appropriate to remove the
claims for the service from ratesetting for this APC. In this final
rule, we will remove the claims that would be used to model payment for
C9803 from ratesetting.
After consideration of the public comments we received, we are
finalizing our proposed policies to use CY 2021 claims and the June
2020 HCRIS extract in establishing the CY 2023 OPPS rates, as well as
to exclude the claims and cost data associated with HCPCSC code C9803
from ratesetting for APC 5731.
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. [thinsp]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. [thinsp]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.
[thinsp]410.32.
Section 410.32(b)(1), titled ``Basic rule,'' provides 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
[[Page 72024]]
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. [thinsp]410.32(b)(1). Section 410.32(b)(3) defines
the levels of supervision referenced in Sec. [thinsp]410.32(b)(1):
general supervision (Sec. [thinsp]410.32(b)(3)(i)); direct supervision
(Sec. [thinsp]410.32(b)(3)(ii)); and personal supervision (Sec.
[thinsp]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.
[thinsp]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. [thinsp]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. [thinsp]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.
[thinsp]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. [thinsp]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. [thinsp]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 410.27
For purposes of clarity and consistency, we proposed to revise
Sec. [thinsp]410.28(e) to clarify that the same nonphysician
practitioners that can provide general and personal supervision of
diagnostic testing services payable under the PFS under Sec.
[thinsp]410.32(b) can provide supervision of diagnostic testing
services furnished to outpatients by hospitals or CAHs. Specifically,
we proposed to revise our existing supervision requirements at Sec.
[thinsp]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.
Another revision that we proposed to Sec. [thinsp]410.28(e) was to
extend the end date of the flexibility allowing for the virtual
supervision of outpatient diagnostic services through audio/video real-
time communications technology (excluding audio-only) from the end of
the PHE to the end of the calendar year in which the PHE ends. The
purpose of this proposal was to ensure consistency between the hospital
and CAH regulations at Sec. Sec. 410.27 and 410.28 with the
physicians' office regulations at Sec. 410.32. Although the proposed
rule contained the proposed revisions to the regulatory text of Sec.
[thinsp]410.28(e), regrettably, the above explanation of the reason for
the proposed revisions was inadvertently omitted from the preamble of
the proposed rule.
We also proposed to replace the cross-references at Sec.
[thinsp]410.28(e) to the definitions of general, direct (for outpatient
services provided at a nonhospital location), and personal supervision
at Sec. [thinsp]410.32(b)(3)(i) through (iii) with the text of those
definitions as newly designated paragraphs (e)(1), (e)(2)(i), (ii), and
(iii), and (e)(3) so that they are now contained within Sec.
[thinsp]410.28.
Similarly, since Sec. [thinsp]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. [thinsp]410.32(b)(3)(i) and (iii), we proposed to
replace the cross-references at Sec. [thinsp]410.27(a)(1)(iv)(A) and
(B) with the text of those definitions so that they are now contained
within Sec. [thinsp]410.27. Additionally, for clarity we proposed to
designate the existing definition of direct supervision and the
proposed definition of personal supervision at Sec.
[thinsp]410.27(a)(1)(iv)(B) as Sec. [thinsp]410.27(a)(1)(iv)(B)(1) and
(2), respectively. Finally, since Sec. [thinsp]410.27(a)(1)(iv)(B) and
(D) contain duplicate definitions for direct supervision, we proposed
to remove Sec. [thinsp]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.
[thinsp]410.27(a)(1)(iv)(B)(1).
We received the following comments in response to our proposal:
Comment: The majority of commenters supported our proposal, citing
clarity, consistency, increased patient access to care and allowing
nonphysician practitioners to practice at the top of their licenses and
clinical training.
Response: We thank commenters for their support for our proposal.
Comment: Two commenters supported the proposal but objected to the
continued use of the term ``nonphysician practitioner.'' One commenter
suggested that we replace ``nonphysician practitioner'' with each
practitioner's professional title (i.e., ``nurse practitioner,''
``physician assistant,'' etc.) or, collectively, ``advance practice
providers'' and update all related regulations, guidance and
information collection instruments accordingly. The second commenter
similarly suggested that we expressly list ``physician assistant,''
``nurse practitioner,'' and other professionals in the place of
``nonphysician practitioner'' and accordingly revise all related
guidance documents.
Response: We appreciate these comments and agree with the
importance of employing the appropriate designations for these
practitioners. We note that Sec. Sec. 410.27(g) and 410.28(e)
specifically list the professional titles that are included in the term
``nonphysician practitioner'' for the purpose of each regulation. It is
therefore unnecessary and would be impractical to replace all instances
of ``nonphysician practitioner'' throughout each regulation with a list
of each practitioner's professional titles. With respect to replacing
``nonphysician practitioner'' with ``advance practice providers,'' we
understand the importance of using the most relevant and up to date
terminology to describe these practitioners. However, as acknowledged
by the commenters, ``nonphysician practitioner'' is used in
[[Page 72025]]
multiple regulations, guidance and other documents and any change in
terminology would need to be considered in light of ensuring
consistency across these authorities. We will take this suggestion into
consideration for future rulemaking.
Comment: One commenter supported the proposal and requested, for
improved clarity and to eliminate inefficiencies or delays in care
caused by a misinterpretation of supervision policy, that we revise the
definitions for general and personal supervision at Sec.
410.32(b)(2)(i) and (iii) to include the ``or other supervising
practitioner'' language contained in the definition for direct
supervision at Sec. 410.32(b)(2)(iii). Another commenter suggested
that we revise the definitions for general and personal supervision at
Sec. 410.32(b)(2)(i) and (iii) to specifically reference ``physician
assistant.''
Response: We appreciate the commenters' suggestions but disagree
that adding ``or other supervising practitioner'' or individual
professional titles to the definitions for general and personal
supervision at Sec. 410.32(b)(2)(i) and (iii) would improve clarity or
eliminate inefficiencies or delays in care caused by a
misinterpretation of supervision policy. As acknowledged by the
commenter, the ``basic rule'' governing supervision of diagnostic tests
at Sec. 410.32(b)(1) provides the authority for nonphysician
practitioners to provide all three levels of supervision for the
purposes of diagnostic x-ray tests, diagnostic laboratory tests, and
other diagnostic tests. Since regulations other than Sec. 410.32 rely
upon the supervision definitions at Sec. 410.32(b)(2)(i) and (iii) and
those regulations may or may not allow nonphysician practitioners to
provide general or personal supervision, it would be inappropriate to
add ``or other supervising practitioner'' to Sec. 410.32(b)(2)(i) and
(iii) and doing so would likely result in further misinterpretations of
supervision policy.
Comment: Two commenters opposed the proposed change, arguing that
nonphysician practitioner skill sets are not interchangeable with those
of fully educated and trained physicians and that physicians' more
extensive and rigorous educational and training requirements make them
uniquely qualified to supervise diagnostic tests. The first commenter
maintains that physicians must supervise diagnostic tests to ensure
patient safety and the accuracy of test results due to the complexity
of certain diagnostic tests and studies demonstrating that nonphysician
practitioners order more diagnostic tests, including tests subjecting
patients to harmful radiation, than physicians. This commenter also
refers to a study that concluded that allowing nurse practitioners and
physician assistants to function with independent patient panels under
physician supervision in the primary care setting resulted in higher
costs, higher utilization of services and lower quality of care as
compared to panels of patients with a primary care physician. The
second commenter references surveys indicating that patients prefer
physicians to lead their health care team and that more patients trust
a physician to deliver their medical care in an emergency as compared
to a nurse, nurse practitioner or physician assistant. Finally, both
commenters argue that expanding the scope of practice of nurse
practitioners will not increase patient access to care because the
actual practice locations of nurse practitioners reveal that they tend
to work in the same large urban areas as physicians.
Response: We acknowledge that physician skill sets are not fully
interchangeable with the skill sets of nonphysician practitioners and
that the education and training requirements of physicians differ from
nonphysician practitioners. However, we do not agree that the skill
sets, education and training of physicians render them solely qualified
to supervise diagnostic services. With respect to the commenter's
concerns about nonphysician practitioners' abilities to safely and
accurately perform diagnostic tests, we note that the proposed
regulation explicitly limits nonphysician supervision to that which is
permitted under the nonphysician practitioner's scope of practice and
state law. Furthermore, nothing in the proposed regulation prohibits or
limits physicians from continuing to supervise any and all diagnostic
tests. Providers and physicians are free to use their own judgment to
determine whether supervision by nonphysician practitioners is
appropriate on a systemic, categorical or case-by-case basis.
As to the studies and surveys cited by commenters related to the
functioning of nonphysician practitioners with independent patient
panels in the primary care setting and patient preferences regarding
who leads their care team and provides their emergency care, it is not
clear what the relevancy of these are to allowing nonphysician
practitioners to supervise diagnostic tests.
Finally, we do not agree with commenters' claim that the practice
locations of nurse practitioners demonstrate that patient access to
care will not increase by allowing nonphysician practitioners to
supervise diagnostic tests. We do not find the evidence submitted by
the commenters sufficient to support the commenters' conclusion that
most nurse practitioners tend to live in the same urban areas as
physicians. Further, even if this evidence was sufficient, it only
includes nurse practitioners; it fails to account for those rural areas
in which nurse practitioners do reside, where it could be expected that
allowing nonphysician practitioners to supervise diagnostic tests would
increase patient access to care; and it fails to account for medically
underserved urban areas where it could also be expected that allowing
nonphysician practitioners to supervise diagnostic tests would increase
patient access to care.
Comment: One commenter supported making the terminology used for
supervision definitions consistent but cautioned CMS against what the
commenter characterized as ``rolling back'' supervision guidelines.
This commenter argued that the continued proposals and regulatory
changes allowing nonphysician practitioners to supervise services of
various complexities undermines the expertise of physicians and the
value of their work. The commenter also expressed concern that many
providers conflate physician supervision with physician work, creating
scenarios for abuse and inadequate support for clinical staff. Finally,
the commenter requested that CMS consult with interested parties and
clinical staff from various specialties capable of speaking to the
impact these continued changes have had on services provided to
beneficiaries.
Response: We do not agree that allowing certain nonphysician
practitioners to supervise diagnostic tests will undermine the
expertise of physicians or the value of their work. As discussed above,
nonphysician practitioners (NPPs) may only supervise diagnostic tests
to the extent they are permitted to do so under their scope of practice
and state law and nothing prohibits physicians from continuing to
supervise any and all diagnostic tests. We appreciate the commenter's
suggestion that CMS consult with interested parties and clinical staff
capable of speaking to the impact of allowing certain nonphysician
practitioners to supervise diagnostic tests, and we will consider doing
so in the future.
After consideration of the public comments we received, we are
finalizing, as proposed, our revisions to
[[Page 72026]]
replace cross-references at Sec. Sec. [thinsp]410.27(a)(1)(iv)(A) and
(B) and[thinsp]410.28(e) to the definitions of general and personal
supervision at Sec. [thinsp]410.32(b)(3)(i) and (iii) with the text of
those definitions and to revise Sec. [thinsp]410.28(e) to (1) extend
the end date of the flexibility allowing for the virtual supervision of
outpatient diagnostic services through audio/video real-time
communications technology (excluding audio-only) from the end of the
PHE to the end of the calendar year in which the PHE ends, and (2)
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.
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 part 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 (Nonexperimental/
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. 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
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 proposed 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 intended 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
[[Page 72027]]
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 anticipated interested parties
would 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 proposed 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. 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 in the study, as
specified under Sec. 405.201, 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 proposed 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
noted 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 invited comments on our
proposal.
Comment: Commenters were very supportive of our proposal.
Commenters expressed that, if finalized as proposed, this proposal
would help preserve the scientific validity of IDE studies involving
blinding procedures. One commenter requested that CMS update our
guidance related to coverage of IDE clinical studies to provide
additional information for manufacturers regarding implementation and
operation of the new policy. This commenter noted that the proposal did
not provide details regarding the process for manufacturers to engage
CMS in discussions regarding the appropriateness and need in relation
to specific IDE studies and other operational issues.
Response: We thank the commenters for their support. We agree with
comments received that this proposal would help ensure the scientific
validity of blinded category B IDE trials. Regarding manufacturer
engagement with CMS, we envision that manufacturers will engage with
CMS to notify us of a need for a unique code to preserve the scientific
integrity of a Category B IDE trial. Billing instructions for Category
B IDE device trials are provided in the Medicare Claims Processing
Manual (Pub. 100-04) Chapter 68, Section 2 and will be updated to
include any changes in policy.
After consideration of the public comments received, we are
finalizing our Category B IDE coding and payment policy as proposed for
CY 2023.
4. Coding and Payment for Category B IDE Studies Regulation Text
Changes
We proposed 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 proposed
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, such as by preventing the unblinding of the study.
Additionally, in a new section, Sec. 419.47(b), we proposed that when
we create a new HCPCS code or revise an existing HCPCS code under
proposed paragraph (a), we would 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, including
the frequency with which the investigational device is used in the
study population.
We did not receive any public comments on the specific regulation
text changes. Because we are finalizing the coding and payment policy
as proposed, we are also finalizing the corresponding regulation text
changes as proposed.
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.
[[Page 72028]]
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 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 proposed 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
final rule with comment period 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 thorugh 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
through 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
[[Page 72029]]
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 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 68 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
[[Page 72030]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.098
[[Page 72031]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.099
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 68. 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 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 proposed 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 explained that 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 proposed the C-codes be assigned to identical
APCs and have the same status indicator assignments as their standalone
codes.
For the LiverMultiScan service, we proposed not to recognize CPT
code 0649T under the OPPS and instead proposed 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. 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 proposed not to recognize CPT code
0722T and instead proposed to establish placeholder HCPCS code 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 proposed not to recognize CPT code 0724T
and instead proposed to establish placeholder HCPCS code C97X3 to
describe the use of QMRCP that must be billed alongside a concurrent CT
scan.
[[Page 72032]]
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 placeholder HCPCS codes C97X1,
C97X2, and C97X3, as well as the standalone CPT codes that describe the
same SaaS procedures, can be found in Addendum B to the CY 2023 OPPS/
ASC proposed rule, which is available via the CMS website.
We received the following comments in response to our proposal:
Comment: Some commenters, including MedPAC, opposed separate
payment for expensive services that do not necessarily provide a
substantial clinical improvement. MedPAC stated that paying separately
undermines the integrity of PPS payment bundles and can limit the
competitive forces that generate price reductions among like services,
lead to overuse (to the extent clinically possible), and shift
financial pressure from providers to Medicare. A commenter encouraged
CMS to seek ways to increase packaging and the extent to which services
can be bundled with related services based on encounters or episodes of
care. Another commenter requested further stakeholder engagement and
asked CMS to refrain from finalizing a SaaS payment policy until all
policy considerations and concerns have been fully vetted.
Response: We note that we only provide payment for SaaS
technologies that have been approved by the FDA and that have received
a CPT code from the AMA. We agree with the commenter that we should
seek ways to increase packaged services, to the extent possible,
because we believe packaging encourages efficiency and is an essential
component of a prospective payment system. However, the services
described by CPT add-on codes 0649T, 0722T, and 0724T are not
consistent with our definition of add-on services for the purposes of
our packaging policy. 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. We believe
equitable payment for SaaS procedures represented by add-on codes can
be achieved by setting their payment rates commensurate with the SaaS
procedures represented by standalone codes.
Comment: Commenters supported CMS's proposal to recognize the SaaS
procedures described by CPT add-on codes as separate and distinct
services. These commenters stated that these AI technologies are not
consistent with the established definition for an add-on service and
that they are separate and distinct services that should be paid for
separately, rather than being packaged into a primary service payment.
They stated that payment for SaaS procedures, when billed concurrently
with the acquisition of the images, should be commensurate with the
payment for the identical SaaS procedures when the services are
furnished without imaging and described by the standalone CPT codes.
Response: We agree with the commenters that the SaaS add-on codes
describe separate and distinct services that should be paid for
separately, rather than as services that are ancillary, supportive,
dependent, or adjunctive to a primary service into which their payment
would be packaged. We agree with the commenters we should pay
separately for SaaS procedures furnished without an associated imaging
service code at the same amount that we pay when SaaS procedures are
furnished with an associated imaging service code.
Comment: Some commenters supported our proposal to pay separately
for SaaS procedures under the OPPS by creating HCPCS C-codes to replace
the CPT add-on codes and assigning the HCPCS C-codes to the same APCs
and status indicators as the standalone codes. The commenters stated
that creating HCPCS codes is a consistent approach to pay separately
for the same AI services represented by standalone codes and provides a
mechanism to capture cost data for AI technology services. The
commenters also noted that the creation of HCPCS codes may be necessary
to facilitate appropriate facility billing and payment. Additionally,
the commenters believed creating HCPCS C-codes in lieu of the CPT add-
on codes would be an appropriate method to ensure consistent payment
across payment systems.
Other commenters recommended that we provide for separate payment
under the OPPS for SaaS procedures described by CPT add-on codes by
creating HCPCS codes G-codes to replace the CPT add-on codes, rather
than HCPCS C-codes. These commenters stated that if CMS creates new
codes despite the significant confusion that different codes may create
for providers in billing Medicare versus non-Medicare payers, CMS
should use HCPCS G-codes instead of HCPCS C-codes because HCPCS G-codes
are more recognized by non-Medicare payers.
Other commenters supported our proposal to pay separately for SaaS
procedures described by CPT add-on codes but opposed our proposal to
create HCPCS C-codes for payment under the OPPS, rather than paying for
the CPT codes already in use. These commenters expressed concerns that
creating HCPCS C-codes for SaaS procedures for which there are already
CPT add-on codes would be inefficient, duplicative, and confusing for
providers and commercial payers. Commenters argued that because
commercial payers do not recognize HCPCS C-codes, the existence of
different codes for Medicare and non-Medicare payers for the same
services would likely create significant confusion.
A commenter stated that the designation of a code as an add-on code
simply describes the relationship between two codes where the add-on
code should be performed and reported with another code and noted that
the concept of packaging is a concept specific to the OPPS. Another
commenter argued that CMS can choose to pay separately under the OPPS
for CPT add-on. The commenter acknowledged that 42 CFR 419.2(b)(18)
requires packaging of certain services described by add-on codes, but
contended that CMS is not required to package all services described by
add-on codes but rather, that CMS has discretion to identify ``certain
services.'' Therefore, the commenter believed CMS could choose not to
identify SaaS add-on codes as among the ``certain services'' described
by add-on codes for which payment is packaged under the regulation at
42 CFR 419.2(b)(18).
Response: We agree with the commenters that creating HCPCS C- or G-
codes for OPPS payment for SaaS procedures for which there are already
CPT add-on codes is not an ideal or the only way to ensure separate
payment under the OPPS. Furthermore, we agree with the commenters that
the concept of packaging is specific to the OPPS and that AMA CPT's
designation of certain codes as add-on codes is to signify a
relationship between services that are performed together, not to
dictate the way payment is made for add-on codes. For these reasons, we
agree with commenters that we should pay
[[Page 72033]]
separately for SaaS CPT add-on codes, rather than creating new HCPCS
codes for these services.
Our policy in 42 CFR 419.2(b)(18) to package the costs of certain
services described by add-on codes with payment for related procedures
is services is consistent with the principle of a prospective payment
system of promoting efficiency. However, where add-on codes do not
identify separately paid services under the OPPS that are associated
with another procedure or service, as is the case with SaaS add-on
codes, we believe it is appropriate to except them from our packaging
policy. We acknowledge that there are circumstances in which exceptions
are needed in order to provide equitable payment for some services,
such as drug administration add-on codes, which are currently paid
separately under OPPS. We believe it is appropriate to except certain
SaaS add-on codes from our general policy of packaging add-on services.
We believe payment for the SaaS procedures assigned CPT add-on codes,
when billed concurrent with the acquisition of the images, should be
made separately at an amount equal to the amount of payment for the
SaaS procedure when the service is furnished without imaging and
described by the standalone CPT code. We believe this final policy is
appropriate because the SaaS procedure is the same and requires the
same resources regardless of whether it is furnished with or without
the imaging service. Therefore, we believe it is appropriate to assign
SaaS CPT add-on codes to identical APCs and status indicator
assignments as their standalone codes.
After consideration of the public comments we received, we are
finalizing our proposal with modification. Specifically, we are
recognizing SaaS CPT add-on codes and paying separately for them. We
are not establishing HCPCS codes, specifically, C-codes, to describe
the add-on codes as standalone services that would be billed with the
associated imaging service. Based on public comments, we believe
establishing a duplicative set of codes in place of CPT add-on codes is
unnecessary and would be burdensome for hospitals. For CY 2023, we are
adopting a policy that SaaS add-on codes are not among the ``certain
services described by add-on codes'' for which we package payment with
the related procedures or services under the regulation at 42 CFR
419.2(b)(18). The SaaS CPT add-on codes will be assigned to identical
APCs and have the same status indicator assignments as their standalone
codes. For CY 2023, please see Table 69 for a list of recognized SaaS
CPT codes and their APC and status indicator assignments.
[[Page 72034]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.100
[[Page 72035]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.101
BILLING CODE 4120-01-C
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.\126\
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.\127\ As a result of these variables and potentially others,
there is significant price variation within the SaaS procedure space.
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\126\ https://www.fda.gov/medical-devices/software-medical-device-samd/artificial-intelligence-and-machine-learning-aiml-enabled-medical-devices.
\127\ https://www.nature.com/articles/s41746-022-00609-6.pdf.
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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 therefore solicited 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 also solicited comment on the specific payment approach we might
use for these services under the OPPS as
[[Page 72036]]
SaaS-type technology becomes more widespread across healthcare, which
is 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 procedure 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
procedure 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 welcomed 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 populations.\128\
Therefore, in addition to our comment solicitation on payment
approaches, we solicited comments on how we could encourage software
developers and other vendors to prevent and mitigate bias in their
algorithms and predictive modeling. We also solicited comment 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.
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\128\ https://www.science.org/doi/10.1126/science.aax2342.
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We received the following public comments in response to our
comment solicitation:
Comment: Several commenters stated that SaaS technology represents
a heterogenous group of technologies and that CMS's characterization of
SaaS technology is overly inclusive. One commenter identified a need
among interested parties in the CPT Editorial Panel process for
consistent terminology to better understand how AI medical services fit
into the CPT code set. Another commenter suggested that CMS adopt more
clear and consistent definitions for AI-enhanced medical devices that
incorporate the terms defined in the AMA AI taxonomy to ensure
consistent definitions across agencies and interested parties. Another
commenter expressed concern that our proposed payment approach did not
account for independent SaaS procedures without an associated
diagnostic imaging procedure. Some commenters suggested that CMS follow
a framework established by the AMA and Digital Medicine Payment
Advisory Group (DMPAG). Another commenter suggested that CMS consider
SaaS as encompassing services furnished using software regulated by the
FDA as Software as a Medical Device (SaMD).
Some commenters argued that CMS should not establish a single
policy that would apply to all SaaS-type technology but instead
separately evaluate each new technology to determine the appropriate
HCPCS coding, including whether or not a potential CPT code can be used
to support payment for the separate and distinct service under the
OPPS.
Another commenter stated that CMS should be discerning in its
classification of SaaS procedures so as not to include technologies
that are designed to assist the clinician in decision making.
Response: We thank commenters for their valuable information and
will consider it for future rulemaking.
Comment: Some commenters provided input on payment approaches
suggested in the CY 2023 OPPS/ASC proposed rule with comment period.
Several commenters did not support the creation of broad G-codes that
could describe the diagnostic image and the SaaS procedure, citing
operational concerns. Some commenters also did not support expansion of
composite APCs to provide a single payment for groups of services that
are performed together during a single clinical encounter because they
believe CMS does not appreciate the wide array and diversity of AI-
based services for this option. They stated that CMS should not assume
that the cost and resources are similar for all SaaS procedures for a
given imaging modality and should not limit payment for SaaS to
technologies used with imaging modalities.
Some commenters expressed interest in using HCPCS codes (i.e., G-
or C- codes) to describe both the diagnostic imaging and the associated
SaaS procedure, and then assigning the code that describes the combined
services to a New Technology APC that would pay for both services.
However, these commenters also expressed concerns about the creation of
a new combined code and CMS not recognizing either the standalone SaaS
code or the add-on code. They also expressed concerns about disruption
and undervaluation that could result from combining imaging and SaaS
procedures into a single code.
Response: We thank commenters for their valuable feedback on SaaS
payment approaches and we will consider their input in future
rulemaking.
Comment: Some commenters suggested close communication and
collaboration between CMS and the FDA to ensure appropriate
standardization of transparency and bias prevention as the regulatory
structure around software-based products evolves. Another commenter
stated the FDA, not CMS, should evaluate an AI product's potential for
introducing inappropriate bias into clinical decision making,
especially bias which could influence outcomes for minoritized groups,
and that such evaluation should be incorporated into the requirements
for AI developers seeking authorization to market.
Another commenter recommend that software developers use principles
of transparency, reproducibility, and explainability, in addition to
bias-control strategies, when developing products. The commenter stated
that developers should also test algorithms in various populations with
differential characteristics in terms of age, gender, race, sexual
orientation, gender identity, and other demographic factors. The
commenter also suggested that developers document and display the
principles, techniques, methods, and populations they used in the
evaluation and validation of their product.
Response: We thank commenters for their valuable feedback on how to
evaluate and mitigate bias in software algorithms.
[[Page 72037]]
H. 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 there, in the CY 2023 OPPS/ASC proposed rule (87
FR 44689 through 44696), we proposed 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.\129\ Both the
ongoing threat of COVID-19 and the potential for future pandemics
necessitate significant investments in pandemic preparedness.
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\129\ White House, National COVID-19 Preparedness Plan, March
2022; https://www.whitehouse.gov/wpcontent/uploads/2022/03/NAT-COVID-19-PREPAREDNESS-PLAN.pdf.
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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 \130\ to $5.75 \131\ or even $12.00 in some cases.\132\ 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.\133\ Failure to
meet these requirements compromises safety of health care personnel and
patients.
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\130\ Department of Health and Human Services, Office of the
Assistant Secretary for Preparedness and Response, Supply Chain
Control Tower analysis.
\131\ 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.
\132\ 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.
\133\ 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.
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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.\134\ 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-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.
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\134\ Department of Health and Human Services, Office of the
Assistant Secretary for Preparedness and Response, Supply Chain
Control Tower analysis.
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This policy goal--ensuring that quality PPE is available to health
care
[[Page 72038]]
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 summarized in the CY 2023 OPPS/ASC proposed rule (87 FR 44690),
we received many helpful comments in response to our comment
solicitation in the FY 2023 IPPS/LTCH PPS proposed rule. After
considering the comments received, we proposed in the CY 2023 OPPS/ASC
proposed rule (87 FR 44689 through 44696) 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 the CY 2023 OPPS/ASC
proposed rule (87 FR 44690 through 44691), for cost reporting periods
beginning on or after January 1, 2023.
For the IPPS, we proposed 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 proposed 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.
Comment: We received many comments supporting the proposed payment
adjustments. Several of these commenters acknowledged the challenges
hospitals faced in acquiring surgical N95 respirators during the COVID-
19 pandemic and the importance of investing in domestic supply chains
for future emergency preparedness.
We also received several comments that were not supportive of the
proposed payment adjustments, including from MedPAC, which stated that
this proposal would undermine the prospective, bundled nature of
Medicare's hospital payments by paying hospitals more as their costs
increase. A few commenters expressed doubt on whether the proposed
payment adjustments would be effective in achieving the stated policy
goal. Some commenters stated that the payment adjustment amounts were
not large enough to shift hospital purchasing decisions and that much
more would need to be done beyond the Medicare program to achieve the
stated policy goal.
A few commenters raised concerns that the proposed payment
adjustments could be susceptible to unintended consequences. One
commenter stated that if manufacturers or vendors are aware that
purchasers of their domestically produced surgical N95 respirators will
be reimbursed, they may artificially inflate the price of their
products. This commenter and others stressed that CMS should monitor
utilization and cost data for any unintended consequences.
One commenter stated that a more appropriate policy would be one in
which CMS provides a payment adjustment to providers who attest to
purchasing surgical N95s through contracts that include terms related
to on-hand inventory. This commenter stated that a significant problem
during the pandemic was the inability of domestic manufacturers to ramp
up production quickly enough to meet spikes in demand. The commenter
believes this alternative payment adjustment would incentivize domestic
manufacturers to hold more inventory on-hand in the event of another
spike in demand in the future.
Response: We thank the commenters for their feedback on our
proposals. While we agree with MedPAC and other commenters that payment
for hospital services under the prospective payment systems should
generally be made as part of the prospective, bundled payment, we
believe that a payment adjustment that offsets hospitals' additional
marginal costs in procuring wholly domestically made NIOSH approved
surgical N95 respirators is appropriate in order to ensure that quality
PPE is available to health care personnel when needed by maintaining
production levels of wholly domestically made PPE. As discussed in the
proposed rule and later in this final rule, as we gain more experience
with this policy and the data collected, we may also consider
modifications to the reasonable cost-based payment approach we are
finalizing. With respect to those comments expressing doubt as to
whether the proposed payment adjustments would be large enough to shift
hospital purchasing decisions, we believe that by significantly
lessening the cost disincentive that hospitals currently face when
deciding whether to purchase domestic surgical N95 respirators over
non-domestic surgical N95 respirators, the proposed payment adjustments
would encourage the purchase of larger quantities of domestic surgical
N95 respirators and thereby help to provide sustained support for the
production and availability of these respirators over the long term.
With respect to those comments expressing doubt as to whether the
proposed
[[Page 72039]]
payment adjustments would be effective in achieving this policy goal,
and that more would need to be done outside of the Medicare program, we
note that this policy would not be adopted in isolation. For
complementary efforts related to strengthening the U.S. public health
and medical supply chain and industrial base, we refer the public to
the ``Public Health Supply Chain and Industrial Base One-Year Report''
available on the HHS website at https://aspr.hhs.gov/MCM/IBx/2022Report/Pages/default.aspx.-
We appreciate the comments regarding potential unintended
consequences. We also thank the commenter for the suggested alternative
payment adjustment approach. We will consider alternative approaches
and/or modifications to address any unintended consequences for future
rulemaking as we gain experience under the policy we are adopting in
this final rule, as discussed further in this section.
Comment: We received many comments urging CMS to expand this policy
to cover other forms of PPE and critical medical supplies beyond
surgical N95 respirators. A few commenters stated that other forms of
PPE suffered shortages during the pandemic similar to surgical N95
respirators and therefore investing in domestic production for these
products was also important for future emergency preparedness.
Response: We thank these commenters for their broader interest in
ensuring domestic production of PPE. We will consider these comments
for future rulemaking if appropriate as we gain more experience with
our policy.
After consideration of these comments, as well as the other
comments received on our proposal that we summarize and respond to in
the sections that follow, we are finalizing the proposed payment
adjustments under the OPPS and IPPS for the additional resource costs
that hospitals face in procuring domestic NIOSH-approved surgical N95
respirators.
3. Proposed Definition of Domestic NIOSH-Approved Surgical N95
Respirators
In the CY 2023 OPPS/ASC proposed rule (87 FR 44690 through 44691),
for purposes of this policy, we proposed 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. In the proposed rule, we stated
our belief 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.\135\ 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.'' \136\ Unless DoD grants a waiver 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.\137\
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\135\ https://www.trade.gov/berry-amendment.
\136\ https://www.trade.gov/berry-amendment-implementation.
\137\ https://sgp.fas.org/crs/misc/R44850.pdf.
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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.\138\ In
the CY 2023 OPPS/ASC proposed rule, we stated our belief 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.
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\138\ https://www.trade.gov/berry-amendment.
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Therefore, based on the Berry Amendment, we proposed 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 proposed 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 proposed 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 final 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.
Comment: One commenter supported CMS using the Berry Amendment as a
basis for our proposed definition of domestic NIOSH-approved surgical
N95 respirators because the Berry Amendment is a familiar standard for
the manufacturing industry. The commenter believes the definition is
appropriate for incentivizing the domestic manufacturing of raw
materials and other componentry for N95 masks. The commenter also
stated that based on their own analysis, they believe there is a
sufficient number of domestic manufacturers producing surgical N95
respirators that meet the proposed definition and therefore the policy
could be sustained.
We received a few comments expressing concern with our proposed
definition of domestic NIOSH-approved surgical N95 respirators. One
commenter was concerned that the hospital community was not familiar
with the Berry Amendment. The commenter believes that hospitals are
more familiar with the Federal Trade Commission (FTC) ``Made in USA''
designation and that CMS should consider surgical N95 respirators
[[Page 72040]]
compliant with the FTC's Made in USA labeling rule as domestic for
purposes of the proposed payment adjustment. The commenter stated that
utilizing the Made in USA framework would drive greater efficiency,
especially since exceptions under the Berry Amendment may evolve,
making it more challenging for providers to receive written statements
from manufacturers with each order.
One commenter supported the requirement that the respirators be
fully assembled in the U.S. but was concerned that the proposed
definition would require all raw materials and components used in
assembling the respirators to also be domestic. This commenter
suggested that CMS instead adopt the content threshold requirements
outlined in the Federal Acquisition Regulations that implement the Buy
American Act, which require 60 percent of the value of a product's
components to be manufactured in the U.S. The commenter stated that
adopting the 60 percent threshold in the first year of the policy would
allow the domestic raw materials supply base time to ramp up the
production capacity required to support greater volume of domestically
produced surgical N95 respirators.
Response: We thank the commenters for their feedback on our
proposed definition of domestic NIOSH-approved surgical N95 respirator
for purposes of this policy. We agree with the commenter that the Berry
Amendment is a familiar standard for the manufacturing industry, as
also discussed in the CY 2023 OPPS/ASC proposed rule. We believe this
is important since we proposed 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--which is based on the Berry Amendment. Moreover,
using a definition of ``domestic'' that is based on the Berry
Amendment, a contracting standard, provides a robust standard that will
help ensure that a sufficient share of surgical N95 respirators are
wholly made in the U.S.--that is, including raw materials and
components. Therefore, we disagree that the FTC ``Made in USA''
designation, which is not a contracting standard, would be a more
appropriate option for classifying domestic surgical N95 respirators
for purposes of this policy. In response to the commenter's concern
that exceptions under the Berry Amendment may evolve, we note that our
proposed definition of a domestic NIOSH-approved surgical N95
respirator did not include any of the exceptions allowed under the
Berry Amendment. We utilized language from the Berry Amendment, which
is familiar to manufacturers, to develop a proposed definition of a
domestic NIOSH-approved surgical N95 respirator that is specifically
applicable to this policy. We also note, as discussed in more detail
below, we are not requiring the written manufacturer statements to
cover a specific order or lot of domestic respirators purchased by a
hospital as long as all of the domestic respirators purchased by the
hospital are covered by associated written manufacturer statements.
With respect to the comment suggesting CMS modify the proposed
definition of a domestic surgical N95 respirator to include respirators
in which at least 60 percent of the value of a product's components
were manufactured in the U.S., we continue to believe manufacturers
already have significant capacity to produce surgical N95 respirators
that meet our proposed definition, as discussed in the proposed rule
(87 FR 44695). Moreover, as discussed previously, we believe it is
important to ensure that a sufficient share of surgical N95 respirators
are wholly made in the U.S.--that is, including raw materials and
components--because in a future pandemic or COVID-19-driven surge,
hospitals need to be able to count on domestic manufacturers to deliver
the equipment they need on a timely basis in order to protect health
care workers and their patients. Therefore, we do not believe adopting
this modified definition would be either necessary or maximally
effective in achieving our stated policy goal of maintaining sufficient
production levels of wholly domestically made surgical N95 respirators.
Comment: We received several comments expressing concern that these
proposed payment adjustments would significantly increase hospitals'
reporting burden. Many of these commenters urged CMS to determine a
less burdensome method of attestation and reporting for these payment
adjustments. Some commenters not supportive of the proposed payment
adjustments stated that the proposal would increase providers' costs
and administrative burden beyond any additional payment. One of these
commenters suggested that CMS not finalize this policy and instead
raise payment rates across the board as means to compensate hospitals
for increased costs without adding administrative burden. Commenters
cited the proposed requirement that hospitals differentiate on their
cost report domestic respirators purchased from non-domestic
respirators purchased as an example of an increase in reporting burden.
Commenters also cited the need for hospitals to obtain a written
statement from the manufacturer stating that the surgical N95
respirators the hospital purchased are domestic as an example of an
increase in reporting burden. These commenters questioned how hospitals
would be able to obtain such a written statement from the manufacturer.
Some commenters expressed concern that the proposed policy would not
require manufacturers to provide such statements and therefore
hospitals could potentially miss payment adjustments even if they
purchased domestic surgical N95 respirators. Some commenters suggested
that CMS should require manufacturers to meet new labeling and
reporting requirements to reduce burden. Another commenter suggested
CMS maintain a list of manufacturers whose products meet the proposed
domestic definition and make this information available.
Response: As discussed in the proposed rule (87 FR 44815), we
believe the burden associated with this proposal would be the time and
effort necessary for the provider to locate and obtain the relevant
supporting documentation to report the quantity and aggregate costs of
domestic NIOSH-approved surgical N95 respirators and non-domestic
NIOSH-approved surgical N95 respirators purchased by the hospital for
the period. As discussed later in the Collection of Information (COI)
section of this document, we estimates that the total burden associated
with this policy for each hospital would be 0.50 hours per year at a
cost of $25.43. We note that we will be soliciting additional comment
on the information collection requirements discussed in this section.
The notice will be announced in the Federal Register and advise the
public on how to obtain copies of the information collection request
and on how to submit public comments. As described in the section X.H.5
of this final rule, the collection of this information is required in
order to calculate each hospital's payment adjustment.
In response to the suggestion that CMS instead raise payment rates
across the board as means to compensate hospitals for increased costs,
we do not think such an alternative policy would be effective in
helping to sustain production and availability of wholly domestically
made NIOSH-approved surgical N95 respirators because the additional
payments would not be directly and measurably associated with
[[Page 72041]]
the purchase of domestic NIOSH-approved surgical N95 respirators by
hospitals.
As reflected in the burden estimate previously discussed, we do not
agree with commenters that obtaining written statements from the
manufacturer would significantly increase hospitals' reporting burden.
In the proposed rule (87 FR 44691), we listed multiple ways in which a
hospital could acquire written statements from the manufacturer. We
also do not currently share commenters' concerns that manufacturers may
not be willing to provide these written statements or that CMS should
maintain a list of such manufacturers. We believe that providing these
written statements would be in the manufacturers' best interest, given
hospitals comprise a significant portion of their customer base. While
some commenters suggested that CMS should require manufacturers to meet
new labeling and reporting requirements to reduce burden, they did not
suggest a mechanism for doing so. As stated previously, once we gain
experience under the policy we are adopting in this final rule, we may
consider modifications in future rulemaking.
Comment: One commenter found certain aspects of the proposed
attestation process unclear. This commenter questioned whether a
hospital would need to obtain a separate statement for every order and
connect each statement to specific lots purchased. This commenter
questioned whether manufacturers would be required to use a specific
form and whether a hospital would need to verify the written statement
provided is appropriately certified. The commenter also questioned
whether suppliers or GPOs would be required to make this information
available or verify manufacturers' statements or adherence to the
proposed rule's requirement.
Response: We thank the commenter for these questions. In
recognition of the different purchasing practices of hospitals with
respect to NIOSH-approved surgical N95 respirators, we are not
requiring the written manufacturer statements to cover a specific order
or lot of domestic respirators purchased by a hospital as long as all
of the domestic respirators purchased by the hospital are covered by
associated written manufacturer statements. As one of the simplest
examples, if a hospital were to exclusively purchase respirators made
by one manufacturer and all the respirators purchased from that
manufacturer were domestic, a single written statement from that
manufacturer covering all of the respirators purchased by that hospital
for the hospital's cost reporting period might be sufficient
documentation. As one alternative to that approach, a hospital could
choose to obtain a written statement for each purchase throughout the
year. Again, different approaches are acceptable as long as all of the
domestic NIOSH-approved surgical N95 respirators purchased by the
hospital and reported on its cost report as such are covered by
associated written manufacturer statements.
We are not requiring a specific format for the written statements
from the manufacturers. As discussed in the proposed rule, hospitals
should ensure that the written statements they receive directly or
indirectly from the manufacturer for domestic NIOSH-approved surgical
N95 respirators 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. If the written statement from the manufacturer indicates
that it has been certified by one of these individuals, a hospital is
not required to perform additional independent verification.
We did not propose that suppliers or GPOs be required to obtain,
provide to hospitals, or verify written statements from the
manufacturers. However, we believe it is in the suppliers' and GPOs'
best interest to obtain and provide such written manufacturer
statements to hospitals given hospitals comprise a significant portion
of their customer base.
4. Payment Adjustment Amount Under the IPPS and OPPS for Domestic
NIOSH-Approved Surgical N95 Respirators
In the CY 2023 OPPS/ASC proposed rule (87 FR 44691), we discussed
our expectation that domestic NIOSH-approved surgical N95 respirators
will continue to be generally more costly than non-domestic
respirators. However, we stated that 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
proposed to initially base the payment adjustments on the IPPS and OPPS
shares of the estimated difference in the reasonable costs \139\ of a
hospital to purchase domestic NIOSH-approved surgical N95 respirators
compared to non-domestic respirators. We proposed that 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 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 the CY 2023 OPPS/ASC proposed rule (87 FR 44692
through 44694). We stated that in future years, 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 the CY 2023 OPPS/ASC proposed rule
(87 FR 44692 through 44694), 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 the CY 2023 OPPS/ASC proposed
rule (87 FR 44692 through 44694), would be used to calculate a Medicare
payment
[[Page 72042]]
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.
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\139\ 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.
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As previously discussed, for the IPPS, we proposed 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 did not propose to make the IPPS
payment adjustment budget neutral under the IPPS.
As also previously discussed, for the OPPS, we proposed 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, we
proposed the OPPS payment adjustment would be budget neutral.
Comment: Several commenters expressed concern with the proposed
OPPS payment adjustment being budget neutral and urged CMS to provide
the OPPS payment in a non-budget neutral manner. A few commenters
stated that they are opposed to the proposed OPPS payment adjustment if
the adjustment is budget neutral. Several commenters stated that
redistributing payments from an already underfunded system will not
benefit providers or patients. A few commenters believe that
implementing the OPPS payment adjustment in a budget neutral manner
would not incentivize hospitals to purchase domestic N95 respirators
and therefore may prevent CMS from achieving the stated policy goal.
One commenter believes that applying a budget neutral adjustment could
have a detrimental effect on safety net or smaller hospitals, which may
be less able to absorb the higher costs of acquiring domestically
produced medical supplies. Similarly, another commenter stated that
there are differences in the degree that hospitals have access to
domestic surgical N95 respirators due to their size and geography and
therefore, the commenter is concerned that a budget neutral approach
would penalize more vulnerable hospitals that are not able to procure
domestic respirators at the same rate as other hospitals. Several
commenters urged CMS to work with Congress to pass a law that would
allow CMS to implement the OPPS payment adjustment in a non-budget
neutral manner.
Response: The OPPS authority for this payment adjustment is 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. Implementing this policy in a
non-budget neutral manner under the OPPS would not be consistent with
the requirement in section 1833(t)(2)(E) of the Act that equitable
adjustments be budget neutral. We acknowledge the concerns that some
commenters raised regarding the impact of the budget neutrality
adjustment on more vulnerable hospitals but reiterate that implementing
this policy without an OPPS budget neutrality adjustment would not be
consistent with section 1833(t)(2)(E) of the Act. Furthermore, we note
that the proposed OPPS budget neutrality adjustment is relatively
small. Therefore, we do not believe the budget neutrality adjustment
will broadly disincentivize hospitals from purchasing domestic surgical
N95 respirators or have a meaningful impact on hospitals that do not
procure domestic surgical N95 respirators at the same rate as other
hospitals.
5. 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 proposed 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 the CY 2023
OPPS/ASC proposed rule (87 FR 44815). The draft new supplemental cost
reporting worksheet was assigned OMB control number 0938-1425.\140\
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\140\ https://www.reginfo.gov/public/do/DownloadNOA?requestID=431065.
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In this section we describe the information we proposed 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 proposed 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.\141\
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\141\ 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.
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(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 proposed 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
[[Page 72043]]
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. We stated in the proposed rule
that, as discussed in section X.H.8 of the proposed rule, 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 proposed 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 proposed to use cost data already reported on the
hospital cost report. We specifically proposed to use the following
from the OMB No. 0938-0050, 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 proposed 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 proposed 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 proposed 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 proposed 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.
Comment: We received comments expressing concern with our proposed
methodology for determining the payment adjustments. A few commenters
expressed concern with CMS limiting this payment adjustment only to the
estimated share of surgical N95 respirators used by the hospital when
treating Medicare fee-for-service beneficiaries. One commenter was
concerned that limiting this payment only to the Medicare share will
not increase demand for domestically produced surgical N95 respirators
enough to achieve the stated policy goal. This commenter urged CMS to
expand these payment adjustments to cover the cost of domestic surgical
N95 respirators used in treating all patients and if CMS does not have
statutory authority to do this, that CMS work with Congress to include
this flexibility in the Medicare statute. Other commenters raised
equity issues and were concerned that hospitals that treat a high
percentage of Medicaid patients or have low Medicare fee-for-service
utilization would be disadvantaged by the use of the Medicare share.
Response: We thank the commenters for sharing these concerns
regarding the use of the Medicare share in determining the amount of
the payment adjustments under the proposed methodology. With respect to
those comments expressing concern that limiting this payment only to
the Medicare share would not increase demand for domestically produced
surgical N95 respirators enough to achieve the stated policy goal, we
note that this policy would not be adopted in isolation. For
complementary efforts related to strengthening the U.S. public health
and medical supply chain and industrial base, we refer the public to
the ``Public Health Supply Chain and Industrial Base One-Year Report''
available on the HHS website at https://aspr.hhs.gov/MCM/IBx/2022Report/Pages/default.aspx.
Comment: MedPAC, while not supportive of the proposed payment
adjustments, stated that if CMS concludes in this final rule that the
proposed payment adjustments are necessary, CMS should set the unit
cost differential between domestic and non-domestic NIOSH-approved
surgical N95 respirators at a national level (rather than on a
hospital-by-hospital basis). MedPAC believes this would reduce the
administrative burden on hospitals, encourage hospitals to purchase the
most economical domestically made product, and reduce the ability of
hospitals to increase their payments by artificially inflating reported
N95 costs. MedPAC expressed concern that under our proposal, hospitals
could artificially inflate their reported surgical N95 respirator costs
by getting discounts on other products in exchange for paying high
prices on surgical N95 respirators.
Conversely, we also received a comment that expressed concern with
moving to a national unit cost differential in the future. This
commenter stated that utilization of surgical N95 respirators varies by
hospital and is dependent on factors such as localized COVID-19
infection rates. This commenter was concerned using a national unit
cost differential would lead to underpayments for hospitals that
utilize a higher number of surgical N95 respirators.
Response: We appreciate the comments submitted on the proposed
payment adjustment methodology. With respect to MedPAC's concerns about
utilizing hospital-specific unit cost differentials, as discussed in
the proposed rule (87 FR 44695), as we gain more experience with the
policy and the data collected, we may consider setting
[[Page 72044]]
the unit cost differential at the national level in future rulemaking.
We believe the commenter who asserted such a change would lead to
underpayments for hospitals that utilize a higher number of surgical
N95 respirators may misunderstand the policy. If we were to make such a
change in the future, the national unit cost differential would still
be multiplied by the hospital-specific quantity of domestic surgical
N95 respirators purchased. Thus, individual hospital volume of
respirators would still be taken into account.
Comment: One commenter requested that CMS provide additional
clarity regarding the amount of the payment adjustment per surgical N95
respirator as this information is needed to inform hospitals'
purchasing decisions.
Response: It is unclear to us what additional clarification this
commenter is seeking. Using the payment methodology as described
previously, in conjunction with the written manufacturer statements
regarding which surgical N95 respirators are domestic under CMS's
definition, hospitals can estimate the approximate payment amounts
under various purchasing scenarios.
To help demonstrate these calculations, in Table 70 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 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. Please note that the cost
report below is a draft and is still subject to final OMB approval.
BILLING CODE 4120-01-P
[[Page 72045]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.102
BILLING CODE 4120-01-C
[[Page 72046]]
6. 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 proposed 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 proposed 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 the CY 2023 OPPS proposed rule, we had approximately
103.4 million OPPS claims. Therefore, in the proposed rule, for CY
2023, we estimated 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 was $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 it will take time for hospitals to adjust
their purchasing patterns and therefore 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 proposed 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.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44695), we estimated
that total CY 2023 OPPS payments associated with this policy will be
$8.3 million (or 103.4 million claims * $0.20 * 40 percent). This
represents approximately 0.01 percent of the OPPS, which we proposed to
budget neutralize through an adjustment to the OPPS conversion factor.
We received no comments on the proposed methodology for determining
the budget neutrality factor associated with the proposed OPPS payment
adjustment.
We noted in the proposed rule that the volume of claims data
available for ratesetting typically increases between the proposed and
final rules, so the proposed rule spending estimate may change in the
final rule. As such, based on the outpatient claims volume available
for ratesetting in this CY 2023 OPPS/ASC final rule with comment
period, we have approximately 109.3 million OPPS claims. Therefore, for
CY 2023, we are now 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 109.3 million. Our best
estimate of the difference in the average unit cost of domestic and
non-domestic NIOSH-approved surgical N95 respirators remains $0.20 and
our best estimate of the percentage of NIOSH-approved surgical N95
respirators used in the treatment of OPPS patients in CY 2023 that are
domestic remains 40 percent. Therefore, we now estimate that total CY
2023 OPPS payments associated with this policy will be $8.7 million (or
109.3 million claims * $0.20 * 40 percent). This represents
approximately 0.01 percent of the OPPS, which we are budget
neutralizing through an adjustment to the OPPS conversion factor.
As stated in the proposed rule, we believe this methodology is the
best way to approximate CY 2023 OPPS spending associated with the
proposed policy. However, we recognize that this approach to estimating
budget neutrality under the OPPS is based on the limited data
available. We may consider refining this approach for future years,
especially once data collected on cost reports for this policy is
available.
7. Regulation Amendments
For the IPPS, we proposed 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 proposed to make conforming changes to
Sec. Sec. 412.1(a) and 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 proposed 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.
We did not receive any public comments on these proposed changes to
the regulation text.
[[Page 72047]]
In summary, after consideration of the comments received on our
proposed policy, we are finalizing as proposed without modification the
payment adjustments under the OPPS and IPPS for the additional resource
costs that hospitals face in procuring domestic NIOSH-approved surgical
N95 respirators, including the proposed amendments to the regulation
text, as previously described.
I. Exemption of 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.
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/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
[[Page 72048]]
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 proposed 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 proposed 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,\142\ Sole Community
Hospital (SCH),\143\ or Medicare Dependent Hospital \144\--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 \145\ and Rural Referral Centers
(RRCs),\146\ 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.
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\142\ 42 CFR 485.601 through 485.647.
\143\ 42 CFR 412.92.
\144\ 42 CFR 412.108.
\145\ 42 CFR 412.101.
\146\ 42 CFR 412.96.
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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, 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 final rule, for CY 2023 we finalizing our proposal 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). However, many rural
providers, and rural SCHs in particular, are often the only source of
care in their communities,\147\ 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.
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\147\ https://www.shepscenter.unc.edu/wp-content/uploads/dlm_uploads/2017/11/SCHs_Differences_in_Community_Characteristics.pdf.
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[[Page 72049]]
Rural areas often experience lower availability of health care
professionals and hospitals than urban areas.\148\ 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.\149\ Rural areas are also disproportionally affected
by declining population rates and decreasing employment rates.\150\ 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.
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\148\ https://www.gao.gov/assets/gao-21-93.pdf.
\149\ https://www.gao.gov/assets/gao-21-93.pdf.
\150\ https://www.gao.gov/assets/gao-21-93.pdf.
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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. Our proposal also aligns with the special payment
treatment rural SCHs receive under the OPPS.
Accordingly, for CY 2023, we proposed 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 solicited 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 final payment would be approximately $121,
with an approximate average copayment of $24. The final PFS-equivalent
rate for a clinic visit would be approximately $48, with an approximate
average copayment of $10. Under this final policy, 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 $14 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 proposed
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 $71 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 the CY 2023 OPPS/ASC final rule.
As detailed later in this section, after consideration of public
comments, we are finalizing our proposal to exempt 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). We will continue to take
information submitted by the commenters into consideration for future
analysis.
The following is a summary of the comments we received and our
responses to those comments.
Comment: The majority of commenters supported our proposal to
exempt 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).
Commenters urged us to finalize the exemption for rural SCHs. We
received numerous comments from individuals in rural Washington
describing how this policy has impacted their community and how the
exemption would be a significant step in the continued stabilization of
rural health care delivery systems. Commenters noted that rural SCHs
are typically the chief, if not sole, source of community outpatient
care for rural residents and this exemption is vital to ensuring
continued access to the care they need. Further, commenters agreed that
exempting rural SCHs from the clinic visit policy would support the
ability of these critical providers to continue to maintain access to
care in their rural communities.
Response: We thank the commenters for their support. As we stated
in the CY 2023 OPPS proposed rule, we believe that exempting rural SCHs
from payment of the site-specific 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.
Comment: Commenters noted that, while it is necessary to
distinguish between urban and rural hospitals for a number of payment
and policy mechanisms, they believe the Metropolitan Statistical Areas
(MSAs) CMS uses to delineate between these areas is not the most
precise tool. One commenter argued that CMS should extend this
exemption to urban SCHs because using MSAs to determine urban and rural
areas is imprecise and unfairly disadvantages urban SCHs that may be
the sole source of hospital services in their communities.
Response: We acknowledge the commenters' points about the important
role that urban SCHs serve in their communities. However, we have not
found that urban SCHs have the additional resource costs for covered
outpatient department services that rural SCHs have, and as such are
only applying the clinic visit policy exemption to rural SCHs.
Comment: Several commenters suggested extending the exemption to
hospitals that provide a disproportionate share of the nation's
uncompensated care, and serve high
[[Page 72050]]
proportions of Medicaid, Medicare, and uninsured patients.
The commenters argued that PBDs of these hospitals are
disproportionately impacted by site-neutral payment policies and
shielding these PBDs from the impact of these policies would ensure
they can continue to cover the costs associated with providing
comprehensive, coordinated care to complex patient populations in
underserved areas. The commenters did acknowledge that CMS has not
defined hospitals that meet these criteria and would need to do so in
order to exempt associated PBDs from the clinic visit policy. They
further recognized that rural SCHs are easily identified because there
is an existing definition to capture the hospitals that fall into this
group. They recommended that CMS first define a group of hospitals that
meet these criteria and then exclude those hospitals' excepted PBDs
from the clinic visit policy to ensure continued access for
marginalized communities without other reliable sources of care.
Response: As the commenter stated, CMS has not created a definition
for the group of hospitals the commenter cited and would need to do so
in order use this definition to exempt associated PBDs from the clinic
visit policy. We will continue to monitor this issue and revisit any
additional exemptions in future rulemaking as appropriate.
Comment: One commenter presented data showing that 56 percent of
rural SCHs, 73 percent of urban SCHs, and 60 percent of Medicare
Dependent Hospitals (MDHs) are located in at least one type of
medically underserved area (MUA) as designated by the Health Resources
& Services Administration. Another commenter suggested that CMS
consider using an expanded exception policy to help hospitals maintain
essential primary care services, particularly for beneficiaries
residing in shortage areas, and to provide patients in these areas with
sufficient choices of providers. They suggested that one way that CMS
could establish such an exception policy would be to determine which
excepted off-campus provider-based departments are in a Primary Care
Health Professional Shortage Area (PC-HPSA) or treat a certain
percentage of patients that reside in a PC-HPSA, and instead pay them
at the full OPPS rate for the clinic visit service.
Response: We do not currently utilize MUAs or PC-HPSA designations
to determine payment for covered outpatient department services under
the OPPS. We believe our policy to exempt rural SCHs is consistent with
our other policies that target this hospital type, which we have
determined have higher resource costs for covered outpatient department
services, and therefore, is an appropriate policy from an OPPS
perspective.
Comment: One commenter noted that while they support this
exemption, they request that CMS monitor the effects of exempting these
locations from site neutral payments. They went on to say that CMS
should monitor utilization, trends in vertical consolidation among
rural facilities, the types of financial relationships rural SCHs have
with physicians, any shifts in services from other locations to rural
SCHs, and the effect of site neutral payment exceptions on beneficiary
cost sharing. Further, they requested that CMS release data to
interested parties so they can also assess these impacts and that CMS
reserve the right to modify this policy if the agency's findings point
to any adverse, unintended consequences.
Response: We share this commenter's concern and will continue to
monitor the effects of exempting rural SCHs from the clinic visit
policy. We may revisit this in future rulemaking as necessary.
Comment: Many commenters suggested other provider types that may be
appropriate to exempt from this policy. Many commenters felt that
Medicare Dependent Hospitals (MDHs) or rural hospitals with fewer than
100 beds should also be exempt from the clinic visit policy. Commenters
expressed that the same reasoning that led CMS to propose to exempt
rural SCHs also applies to MDHs. One commenter noted that MDHs
hospitals have a larger percentage of inpatient days or discharges for
Medicare patients and that they are therefore more vulnerable to
inadequate Medicare payments than other hospitals because they are less
able to cross-subsidize inadequate Medicare payments with more generous
payments from private payers. Commenters expressed that this greater
dependence on Medicare may make certain hospitals more financially
vulnerable and thus, more worthy of being exempt from the clinic visit
policy.
Other commenters suggested that it would be appropriate to extend
the exemption to urban SCHs. Commenters gave specific examples of
instances where an SCH is designated urban by CMS, but the hospital is
actually a considerable distance from the nearest urban area.
Commenters expressed that there are many factors that underscore why
urban SCHs and MDHs should also receive the payment exemption,
including below-average patient care margins at these types of
hospitals. Commenters also argued extending this exemption to MDHs and
urban SCHs would only add nominally to the cost of the proposed policy.
A few commenters suggested that Rural Referral Centers (RRCs) that
provide rural populations with local access to a wide range of health
care services should be exempt from the clinic visit policy. Commenters
explained that RRCs localize care, minimize the need for further
referrals and travel to urban areas, and provide services at costs
lower than would be incurred in urban areas. Commenters also said these
hospitals commonly establish satellite sites and outreach clinics to
provide primary and emergency care services to surrounding underserved
communities, a function that is becoming increasingly important as
economic factors force many small rural hospitals to close.
Commenters also urged CMS to extend this exemption to providers
deemed Medicaid Disproportionate Share (DSH) hospitals as well. They
explained that communities served by DSH hospitals are similar to those
served by SCHs. They felt DSH hospitals are characterized by especially
large numbers of low-income, Medicaid-covered, dually eligible, and
uninsured residents. They also argued exempting DSH hospitals could
entice physicians to practice in these communities and enhance access
to care.
Commenters also suggested that the exemption be extended to
Medicare DSH hospitals. One commenter drew a parallel based on
documented improvements in access after the Affordable Care Act's
temporary increase in Medicaid payment rates for primary care went into
effect; they believe that exempting Medicare DSH hospitals from the
site-neutral policy will similarly reduce wait times for Medicare
beneficiaries. Finally, commenters also suggested that Low-Volume
Adjustment hospitals receive the exemption.
Response: In the CY 2006 OPPS final rule with comment period (70 FR
68556 through 68561) we uniquely identified rural SCHs as providers
with demonstrated additional resource costs. We found that rural SCHs
have 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. Building upon that foundation, 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 (we note that we are
finalizing a policy to pay for 340B drugs and biologicals under the
OPPS at the same rates we pay for non-340B drugs and biologicals
(generally, ASP plus 6
[[Page 72051]]
percent)). We believe exempting rural SCHs, which have demonstrated
additional resource costs, is appropriate to ensure these hospitals can
remain open to serve the beneficiaries who rely on them for their care.
We share commenters' concerns about the financial difficulties
associated with maintaining access to care in medically vulnerable
communities. However, in each of these cases, Congress did not
determine that any of these hospital types required additional payments
for outpatient services.
Section 1833(t)(13)(B) authorizes an appropriate adjustment for
hospitals located in rural areas where the Secretary determines, based
on a study, that the costs incurred by these hospitals by APC group
exceed costs incurred by hospitals in urban areas. In the CY 2006 OPPS
final rule with comment period (70 FR 68556 through 68561), we
summarized our study of the cost of covered outpatient department
services to hospitals in rural areas and found that rural SCHs were the
only rural hospital type that had higher resource costs for covered
outpatient department services. Rural SCHs demonstrated significantly
higher cost per unit than urban hospitals after controlling for labor
input prices, service-mix complexity, volume, facility size, and type
of hospital. In the CY 2006 OPPS final rule with comment period (70 FR
68556 through 68561) we stated that we found no significant difference
in cost between all small rural hospitals with 100 or fewer beds and
urban hospitals. We found that there was insufficient evidence to
conclude that rural hospitals with 100 or fewer beds have higher costs
than urban hospitals.
We proposed a narrow exception to our clinic visit policy largely
based upon the historical treatment and documented additional resource
costs of rural SCHs under the OPPS. We are only excepting rural SCHs
because we continue to believe that the underlying principles of the
clinic visit policy continue to justify application of the volume
control method for clinic visits to the remaining hospital types,
including most rural and safety-net providers. Where the difference in
payment is leading to unnecessary increases in the volume of covered
outpatient department services, we remain concerned that this shift in
care setting increases beneficiary cost-sharing liability because
Medicare payment rates for the same or similar services are generally
higher in hospital outpatient departments than in physician offices.
Further, we do not believe that commenters provided sufficient
reasoning or data to show that the other provider types suggested
(Medicare Dependent Hospitals, Urban Sole Community Hospitals, Rural
Referral Centers, Medicaid DSH, Medicare DSH, and Low-Volume Adjustment
Hospitals) demonstrate the additional resource costs that rural SCHs do
and should therefore also be exempted from this OPPS payment policy. We
share commenters' concerns about maintaining access to care in urban
and rural settings and enhancing access to care in medically vulnerable
communities. We also share commenters' concerns about profit margins.
However, we are must balance the concerns of providers with the
concerns of beneficiaries regarding the affordability of their care.
For hospitals subject to the clinic visit policy, the proposed PFS-
equivalent rate for a clinic visit brings the approximate average
copayment down from $26 to $10. We will continue to study access and
cost to see if further exemptions to the clinic visit policy are
appropriate.
After consideration of public comments we received, we are
finalizing our proposal to exempt 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). We believe that exempting rural SCHs from the
clinic visit policy will 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 same rate paid when the service is furnished in
on-campus departments. Finalizing this policy also aligns with the
special payment treatment rural SCHs receive under the OPPS. We will
continue to monitor the effects of this change in Medicare payment
policy.
XI. CY 2023 OPPS Payment Status and Comment Indicators
A. 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 proposed 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 proposed 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 proposed 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.
We solicited public comments on the proposed definitions of the
OPPS payment status indicators for 2023.
Comment: We received several comments in support of removing C9399
from packaging when the code is included on a claim with status
indicator ``J1'' or ``J2'' and adding a new definition to status
indicator ``A'' to include unclassified drugs and biologicals that are
reportable with C9399.
Response: We thank commenters for their support. After
consideration of the public comments we received, we are finalizing
without modification the revision of status indicator ``A''.
We did not receive any public comments related to the revision of
status indicators ``F'' and ``L''. Therefore, we are finalizing our
proposals to revise these status indicators without modification.
The complete list of CY 2023 payment status indicators and their
definitions is displayed in Addendum D1 to the CY 2023 OPPS/ASC final
rule with comment period, which is available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/Hospital-Outpatient-Regulations-and-Notices.
The CY 2023 payment status indicator assignments for APCs and HCPCS
codes are shown in Addendum A and Addendum B, respectively, to the CY
2023 OPPS/ASC final rule with comment period, which are available on
the CMS website at: https://
[[Page 72052]]
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
HospitalOutpatientPPS/index.html.
B. CY 2023 Comment Indicator Definitions
In the CY 2023 OPPS/ASC proposed rule (87 FR 44699), we proposed 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 proposed 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 OPPS comment indicators for CY 2023 are
listed in Addendum D2 to the CY 2023 OPPS/ASC final rule with comment
period, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HospitalOutpatientPPS/index.html.
We believe that the existing CY 2022 definitions of the OPPS
comment indicators continue to be appropriate for CY 2023. Therefore,
we proposed to use those definitions without modification for CY 2023.
We solicited public comments on our proposed definitions of the
OPPS comment indicators for 2023.
We did not receive any public comments on our proposal and
therefore, we are finalizing those definitions without modification for
CY 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. 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.\151\ We
appreciate MedPAC's recommendation and, as discussed further in Section
II.B of the CY 2023 OPPS/ASC proposed rule (87 FR 44527 through 44528),
we proposed 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 final rule with
comment period.
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\151\ Medicare Payment Advisory Committee. March 2022 Report to
the Congress. Chapter 3: Hospital inpatient and outpatient services,
pp.65-66. Available at: https://www.medpac.gov.
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B. 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.\152\ 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).
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\152\ 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.
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In the CY 2019 OPPS/ASC final rule with comment period (83 FR
59079), we adopted a policy, which we codified at 42 CFR 416.171(a)(2),
to apply the productivity-adjusted hospital market basket update to ASC
payment system rates for an interim period of 5 years. We refer readers
to the CY 2019 OPPS/ASC final rule with comment period for complete
details regarding our policy to use the productivity-adjusted hospital
market basket update for the ASC payment system for CY 2019 through CY
2023. Therefore, consistent with our policy for the ASC payment system,
as discussed in section XIII.H 2.b. of the CY 2023 OPPS/ASC proposed
rule (87 FR 44724 through 44725), we proposed 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
final CY 2023 ASC conversion factor for ASCs meeting quality reporting
requirements and the final hospital market basket update factor are
discussed in section XIII of this final rule with comment period.
C. ASC Cost Data
In the March 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.\153\
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\153\ 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.
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While we recognize that the submission of cost data could place
additional administrative burden on most ASCs, and we did not propose
any cost reporting requirements for ASCs in the CY 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
[[Page 72053]]
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.
Comments received from MedPAC for other ASC payment system policies
are discussed in the applicable sections of this final rule with
comment period. The full March 2022 MedPAC Report to Congress can be
downloaded from MedPAC's website at: https://www.medpac.gov.
XIII. Updates to the Ambulatory Surgical Center (ASC) Payment System
A. Background
1. Legislative History, Statutory Authority, and Prior Rulemaking for
the ASC Payment System
For a detailed discussion of the legislative history and statutory
authority related to payments to ASCs under Medicare, we refer readers
to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74377
through 74378) and the June 12, 1998 proposed rule (63 FR 32291 through
32292). For a discussion of prior rulemaking on the ASC payment system,
we refer readers to the CYs 2012 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
[[Page 72054]]
year, and are implemented only through the January quarterly CR update.
New and revised Category I CPT vaccine codes are released twice a year
and are implemented through the January and July quarterly CR updates.
We refer readers to Table 41 in the CY 2012 OPPS/ASC proposed rule for
an example of how this process is used to update HCPCS and CPT codes,
which we finalized in the CY 2012 OPPS/ASC final rule with comment
period (76 FR 42291; 76 FR 74380 through 74384).
In our annual updates to the ASC list of, and payment rates for,
covered surgical procedures and covered ancillary services, we
undertake a review of excluded surgical procedures, new codes, and
codes with revised descriptors, to identify any that we believe meet
the criteria for designation as ASC covered surgical procedures or
covered ancillary services. Updating the lists of ASC covered surgical
procedures and covered ancillary services, as well as their payment
rates, in association with the annual OPPS rulemaking cycle is
particularly important because the OPPS relative payment weights and,
in some cases, payment rates, are used as the basis for the payment of
many covered surgical procedures and covered ancillary services under
the revised ASC payment system. This joint update process ensures that
the ASC updates occur in a regular, predictable, and timely manner.
B. ASC Treatment of New and Revised Codes
1. Background on Current Process for Recognizing New and Revised HCPCS
Codes
Payment for ASC procedures, services, and items are generally based
on medical billing codes, specifically, HCPCS codes, that are reported
on ASC claims. 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 the CY 2023 OPPS/ASC
proposed rule.
We have separated our discussion below based on when the codes are
released and whether we solicited public comments in the CY 2023 OPPS/
ASC proposed rule (and respond to those comments in this final rule
with comment period) or whether we are soliciting public comments in
this final rule with comment period.
We note that we sought public comments in the CY 2022 OPPS/ASC
final rule with comment period (86 FR 63767-63768) on the new and
revised Level II HCPCS codes effective on either October 1, 2020 or
January 1, 2021. These new and revised codes were flagged with comment
indicator ``NI'' in Addenda AA and BB to the CY 2022 OPPS/ASC final
rule with comment period to indicate that we were assigning them an
interim payment status and payment rate, if applicable, which were
subject to public comment following publication of the CY 2022 OPPS/ASC
final rule with comment period. In the CY 2022 OPPS/ASC proposed rule
(86 FR 42196), we stated that we will finalize the treatment of these
codes under the ASC payment system in this CY 2023 OPPS/ASC final rule
with comment period.
2. April 2022 HCPCS Codes for Which We Solicited Public Comments in the
Proposed Rule
For the April 2022 update, there were no new CPT codes appropriate
for separate payment under the ASC payment system; 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 of the CY 2023 OPPS/ASC proposed rule (87 FR 44702)
displayed the new Level II HCPCS codes that were implemented April 1,
2022. We note that the proposed comment indicators (CI), payment
indicators (PI), and payment rates for these April codes were listed in
Addendum BB to the CY 2023 OPPS/ASC proposed rule. In addition, we note
that the entire ASC addenda, which consist of the addenda listed below,
are available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices:
ASC Addendum AA: ASC Covered Surgical Procedures (Including
Surgical Procedures for Which Payment is Packaged)
ASC Addendum BB: Covered Ancillary Services Integral to
Covered Surgical Procedures (Including Ancillary Services for Which
Payment is Packaged)
ASC Addendum DD1: ASC Payment Indicators (PI)
ASC Addendum DD2: ASC Comment Indicators (CI)
ASC Addendum EE: Surgical Procedures Excluded from Payment in
ASCs
ASC Addendum FF: ASC Device Offset Percentages
We invited public comments on the proposed payment indicators for
the new HCPCS codes that were recognized as ASC covered ancillary
services in April 2022 through the quarterly update CRs, and as listed
in Table 71 (New Level II HCPCS Codes for Ancillary Services Effective
April 1, 2022). The new codes that were effective April 1, 2022, were
assigned to comment indicator ``NP'' in ASC Addendum BB to the CY 2023
OPPS/ASC proposed rule to indicate that the codes are assigned to
interim payment indicators and comments would be accepted on their
interim assignments. We proposed to finalize the payment indicators in
this CY 2023 OPPS/ASC final rule with
[[Page 72055]]
comment period. We did not receive any comments on the proposed ASC
payment indicator assignments for the new Level II HCPCS codes
implemented in April 2022 and are finalizing the proposed ASC payment
indicator assignments for these codes.
We note that several of the temporary drug HCPCS C-codes have been
replaced with permanent drug HCPCS J-codes. Their replacement codes are
also listed in Table 71. In addition, although in prior years we
included the final ASC payment indicators in the coding tables in the
preamble, because we include the same information in the ASC addenda,
we have not included them in Table 71. Therefore, readers are advised
to refer to the ASC addenda for the final ASC payment indicators and
payment rates for all codes reported under the ASC payment system. The
list of ASC payment indicators and definitions used under the ASC
payment system can be found in the ASC addenda. We note that the ASC
addenda (AA, BB, DD1, DD2, EE, and FF) are available via the internet
on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.
BILLING CODE 4120-01-P
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3. July 2022 HCPCS Codes for Which We Solicited Public Comments in the
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 Covered Surgical Procedures and Covered Ancillary Services
Effective July 1, 2022) of the CY 2023 OPPS/ASC proposed rule displayed
the new HCPCS codes that were effective July 1, 2022. We invited public
comments on the proposed payment indicators for these Level II HCPCS
codes, and indicated that the proposed comment indicators, payment
indicators, and payment rates for these codes were listed in Addendum
AA and Addendum BB of the proposed rule. These new codes that were
effective July 1, 2022, were assigned to comment indicator ``NP'' in
ASC Addendum AA and Addendum BB to the CY 2023 OPPS/ASC proposed rule
to indicate that the codes were assigned to interim payment indicators
and comments would be accepted on their interim assignments. We further
stated that we proposed to finalize the payment indicators in this CY
2023 OPPS/ASC final rule with comment period. We note that several of
the temporary drug
[[Page 72056]]
HCPCS C-codes have been replaced with HCPCS J-codes and HCPCS Q-codes.
Their replacement codes are also listed in Table 72. In addition,
although in prior years we included the final ASC payment indicators in
the coding tables in the preamble, because we include the same
information in Addendum AA and Addendum BB, we have not included them
in Table 72. Therefore, readers are advised to refer to the ASC addenda
for the final ASC payment indicators and payment rates for all codes
reported under the ASC payment system.
We did not receive any comments on the proposed ASC payment
indicator assignments for the new Level II HCPCS codes that we added to
the list of covered surgical procedures and ancillary services
implemented as of July 2022 and we are finalizing the proposed ASC
payment indicator assignments for these codes.
We note that the ASC addenda (AA, BB, DD1, DD2, EE, and FF) are
available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.
[GRAPHIC] [TIFF OMITTED] TR23NO22.104
In addition, 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 were listed in Table 53
(New Category III CPT Codes for Covered Ancillary Services Effective
July 1, 2022) of the CY 2023 OPPS/ASC proposed rule (87 FR 44704), and
also listed in Table 73 of this CY 2023 OPPS/ASC final rule with
comment period. We invited public comments on the proposed payment
indicators for these new Category III CPT codes, and indicated that the
proposed comment indicators, payment indicators, and payment rates for
these codes were listed in Addendum BB of the proposed rule. We further
stated that we would finalize the payment indicators in this CY 2023
OPPS/ASC final rule with comment period.
We did not receive any comments on the proposed ASC payment
indicator assignments for the new Level II HCPCS codes that we added to
the list of covered ancillary services implemented in July 2022 and we
are finalizing the proposed ASC payment indicator assignments for these
codes. We note that the ASC addenda (AA, BB, DD1, DD2, EE, and FF) are
available via the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.
[[Page 72057]]
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4. October 2022 HCPCS Codes for Which We Are Soliciting Public Comments
in This Final Rule With Comment Period
For CY 2023, consistent with our established policy, we proposed
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 are
inviting public comments in this final rule with comment period on the
interim payment indicators, which would 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 Are Soliciting Public Comments in
This 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 the CY 2023 OPPS/ASC
proposed rule, most Level II HCPCS codes are not released until
sometime around November to be effective January 1. Because these codes
are not available until November, we are unable to include them in the
OPPS/ASC proposed rules, however, the codes are flagged with comment
indicator ``NI'' in ASC Addendum AA and Addendum BB to this final rule
with comment period to indicate that we are assigning them an interim
payment status, which is subject to public comment. Therefore, as we
stated in the CY 2023 OPPS/ASC proposed rule, these Level II HCPCS
codes that will be effective January 1, 2023, are included in this
final rule with comment period, and will also be released to the public
through in the January 2023 ASC Update CR and the CMS HCPCS website.
In addition, for CY 2023, we propose to continue our established
policy of assigning comment indicator ``NI'' in Addendum AA and
Addendum BB to the OPPS/ASC final rule with comment period to the new
Level II HCPCS codes that will be effective January 1, 2023, to
indicate that we are assigning them an interim payment indicator, which
is subject to public comment. We are inviting public comments in this
final rule with comment period on the payment indicator assignments,
which would be finalized in the CY 2024 OPPS/ASC final rule with
comment period.
b. CPT Codes for Which We Solicited Public Comments in the 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 the
CY 2023 OPPS/ASC proposed rule. The new, revised, and deleted CPT codes
can be found in Addendum AA and Addendum BB to the CY 2023 OPPS/ASC
proposed rule (which is available via the internet on the CMS website
at https://www.cms.gov/medicaremedicare-fee-service-paymentascpaymentasc-regulations-and-notices/cms-1772-p). We note that
the new and revised CPT codes are assigned to comment indicator ``NP''
in ASC Addendum AA and Addendum BB of the CY 2023 OPPS/ASC proposed
rule to indicate that the code is new for the next calendar year or the
code is an existing code with substantial revision to its code
descriptor in the next calendar year as compared to the current
calendar year with a proposed payment indicator assignment. We stated
that we would accept comments and finalize the payment indicators in
this CY 2023 OPPS/ASC final rule with comment period. Further, we
reminded 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 the CY 2023
OPPS/ASC proposed rule so that the public could comment on our proposed
payment indicator assignments. The 5-digit placeholder codes were
listed in Addendum O to the CY 2023 OPPS/ASC proposed rule,
specifically under the column labeled ``CY 2023 OPPS/ASC Proposed Rule
5-Digit Placeholder Code.'' We also stated that we would include the
final CPT code numbers in this CY 2023 OPPS/ASC final rule with comment
period.
We did not receive any comments on the proposed ASC payment
indicators for the new CPT codes effective January 1, 2023, so we are
finalizing these codes as proposed.
Finally, in Table 74, we summarize our process for updating codes
through our ASC quarterly update CRs, seeking public comments, and
finalizing the treatment of these new codes under the ASC payment
system.
[[Page 72058]]
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C. Update to the List of ASC Covered Surgical Procedures and Covered
Ancillary Services
1. Covered Surgical Procedures
a. Covered Surgical Procedures Designated as Office-Based
(1) Background
In the August 2, 2007 ASC final rule, we finalized our policy to
designate as ``office-based'' those procedures that are added to the
ASC Covered Procedures List (CPL) in CY 2008 or later years that we
determine are furnished predominantly (more than 50 percent of the
time) in physicians' offices based on consideration of the most recent
available volume and utilization data for each individual procedure
code and/or, if appropriate, the clinical characteristics, utilization,
and volume of related codes. In that rule, we also finalized our policy
to exempt all procedures on the CY 2007 ASC list from application of
the office-based classification (72 FR 42512). The procedures that were
added to the ASC CPL beginning in CY 2008 that we determined were
office-based were identified in Addendum AA to that rule with payment
indicator ``P2'' (Office-based surgical procedure added to ASC list in
CY 2008 or later with MPFS nonfacility PE RVUs; payment based on OPPS
relative payment weight); ``P3'' (Office-based surgical procedures
added to ASC list in CY 2008 or later with MPFS nonfacility PE RVUs;
payment based on MPFS nonfacility PE RVUs); or ``R2'' (Office-based
surgical procedure added to ASC list in CY 2008 or later without MPFS
nonfacility PE RVUs; payment based on OPPS relative payment weight),
depending on whether we estimated the procedure would be paid according
to the ASC standard ratesetting methodology based on its OPPS relative
payment weight or at the MPFS nonfacility PE RVU-based amount.
Consistent with our final policy to annually review and update the
ASC CPL to include all covered surgical procedures eligible for payment
in ASCs, each year we identify covered surgical procedures as either
temporarily office-based (these are new procedure codes with little or
no utilization data that we have determined are clinically similar to
other procedures that are permanently office-based), permanently
office-based, or nonoffice-based, after taking into account updated
volume and utilization data.
(2) Changes for CY 2023 to Covered Surgical Procedures Designated as
Office-Based
In developing the 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 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
[[Page 72059]]
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.D of the CY 2023 OPPS/ASC
proposed rule (87 FR 44680 through 44682), 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 proposed to use the CY 2021 claims for CY 2023 OPPS ratesetting.
Similarly, in the CY 2023 OPPS/ASC proposed rule (87 FR 44705 through
44708), we proposed 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 believed met 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 believed that the services are of a level
of complexity consistent with other procedures performed routinely in
physicians' offices. The CPT codes that we proposed to permanently
designate as office-based for CY 2023 are listed in Table 75.
[GRAPHIC] [TIFF OMITTED] TR23NO22.107
Comment: One commenter recommended that we do not assign an office-
based payment indicator of ``P3'' to CPT code 36595 (Mechanical removal
of pericatheter obstructive material (e.g., fibrin sheath) from central
venous device via separate venous access) as this procedure was
assigned a non office-based payment indicator of ``G2''
[[Page 72060]]
in prior years and was assigned a payment indicator of ``J8''--Device-
intensive procedure; paid at adjusted rate--for CY 2022.
Response: In the CY 2014 OPPS/ASC final rule with comment period
(78 FR 75071 through 75072), we finalized our proposal to permanently
designate CPT code 36595 as an office-based procedure. As we have
stated in past rulemaking (76 FR 74409 and 80 FR 70483), our current
policy is for device-intensive status to supersede the assignment of
the office-based designation. If the procedure no longer meets our
criteria for device-intensive status we believe the permanent office-
based designation should still apply. After reviewing CY 2021 claims
data available for this final rule, CPT code 36595 does not meet our
criteria for device-intensive status for CY 2023. Therefore, we are not
accepting the commenter's recommendation and are finalizing our
proposal to assign an office-based payment indicator to CPT code 36595
for CY 2023.
Comment: Some commenters did not support our proposal to assign a
permanent office-based designation to CPT code 15275 (Application of
skin substitute graft to face, scalp, eyelids, mouth, neck, ears,
orbits, genitalia, hands, feet, and/or multiple digits, total wound
surface area up to 100 sq cm; first 25 sq cm or less wound surface
area). One commenter claimed that an insufficient ASC payment rate has
contributed to a low claims volume and a site of service shift away
from the ASC setting. Another commenter stated that our office-based
analysis only looked at the ASC and physician office claims volume and
did not account for all outpatient settings, including hospital
outpatient department utilization.
Response: The commenter has inaccurately described our analysis for
making office-based determinations under the ASC payment system. We
propose procedures to be permanently designated as office-based based
on physician claims that report the procedure across all settings of
care, both inpatient and outpatient. If the office-based utilization
exceeds 50% of total utilization across all settings of care and total
utilization exceeds 50 claims, we propose such procedures be
permanently designated as office-based. Based on our review of CY 2021
claims and utilization data for this final rule with comment period,
for CPT code 15725, there were a reported 90,211 claim lines in the
physician office setting and a reported 154,108 claim lines across all
settings of care. We believe this is volume is more than sufficient to
make a permanent office-based designation to CPT code 15275 under our
current policy.
Comment: One commenter supported our proposal to assign a permanent
office-based designation to CPT code 31574 (Laryngoscopy, flexible;
with injection(s) for augmentation (eg, percutaneous, transoral),
unilateral).
Response: We appreciate the commenter's support of our office-based
designation for CPT code 31574.
After consideration of the comments received, we are finalizing our
proposal, without modification, to permanently designate the procedures
in Table 76 as office-based procedures.
[GRAPHIC] [TIFF OMITTED] TR23NO22.108
[[Page 72061]]
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 are
permanently assigned to the list of office-based procedures. In the
absence of claims data, we 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.
We 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 77. For all 8 surgical procedures, there were fewer
than 50 claims or no claims in our data. Therefore, we proposed to
continue to designate these procedures, shown in Table 77, 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 the CY 2023 OPPS/ASC
proposed rule (which is available via the internet on the CMS website
at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices).
[[Page 72062]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.109
We did not receive any public comments on our proposal to assign
temporary office-based designations to the procedures listed in Table
77. However, as discussed in section XIII.C.1.d of this final rule with
comment period, we are finalizing the addition of a new CPT code 0581T
(Ablation, malignant breast tumor(s), percutaneous, cryotherapy,
including imaging guidance when performed, unilateral) to the ASC list
of covered surgical procedures. We believe this procedure is clinically
similar to CPT code 19105 (Ablation, cryosurgical, of fibroadenoma,
including ultrasound guidance, each fibroadenoma) which is currently
assigned an office-based payment indicator of ``P2'' under the ASC
payment system. Therefore, we are finalizing our proposal, with a
modification to include CPT code 0581T, to designate the procedures
shown in Table 78 as temporarily office-based for CY 2023.
[[Page 72063]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.110
BILLING CODE 4120-01-C
b. Device-Intensive ASC Covered Surgical Procedures
(1) Background
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59040 through 59041), for a summary of our existing
policies regarding ASC covered surgical procedures that are designated
as device-intensive.
(2) Changes to List of ASC Covered Surgical Procedures Designated
as Device-Intensive for CY 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
[[Page 72064]]
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 the 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 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.
Comment: Many commenters requested that we use invoice or cost data
submitted by manufacturers to determine the device portion for the ASC
payment rate in lieu of the proposed default device offset percentage
of 31 percent, specifically for the following procedures:
HCPCS Code C9781 (Arthroscopy, shoulder, surgical; with
implantation of subacromial spacer (e.g., balloon), includes
debridement (e.g., limited or extensive), subacromial decompression,
acromioplasty, and biceps tenodesis when performed);
CPT code 30469 (Repair of nasal valve collapse with low
energy, temperature-controlled (i.e., radiofrequency) subcutaneous/
submucosal remodeling);
CPT code 69714 (Implantation, osseointegrated implant,
temporal bone, with percutaneous attachment to external speech
processor/cochlear stimulator; without mastoidectomy).
Other commenters requested that we use invoice data or a subset of
claims data to determine device-intensive status for certain procedures
and stated that hospitals have inaccurately coded devices as surgical
supplies, therefore, the device offset percentage calculated from our
claims statistics does not reflect the true cost of the device.
Specifically, commenters requested that we assign device-intensive
status to the following procedures:
HCPCS code C9761 (Cystourethroscopy, with ureteroscopy
and/or pyeloscopy, with lithotripsy (ureteral catheterization is
included) and vacuum aspiration of the kidney, collecting system and
urethra if applicable);
CPT code 0499T (Cystourethroscopy, with mechanical
dilation and urethral therapeutic drug delivery for urethral stricture
or stenosis, including fluoroscopy, when performed);
CPT code 55880 (Ablation of malignant prostate tissue,
transrectal, with high intensity-focused ultrasound (hifu), including
ultrasound guidance);
CPT code 66174 (Transluminal dilation of aqueous outflow
canal; without retention of device or stent).
Response: We are not accepting the commenters' recommendations to
use invoice data in lieu of claims data or a subset of our cost data to
determine the device portion of the ASC payment rate. As we stated in
the CY 2023 OPPS/ASC proposed rule (87 FR 44623-24), we may temporarily
assign a higher offset percentage if warranted by additional
information in certain rare instances. Additionally, for new procedures
that do not have claims data, we may assign a device offset percentage
from a predecessor code, or, from a clinically similar procedure code
that uses the same device. For procedures that we proposed to assign a
default device offset percentage of 31 percent due to a lack of claims
data and lack of either a predecessor code or clinically similar code
that uses the same device, including HCPCS code C9781, CPT codes 30469
and 69714, we believe the default device offset percentage of 31
percent encourages efficiencies under the ASC payment system and is
appropriate until we have available claims.
We are also not accepting the commenters' recommendation to use
invoice data from device manufacturers or a subset of claims data for
determining device-intensive status for procedures that do not have a
device offset percentage that exceeds our 30% device-intensive
threshold based on claims data available for this final rule with
comment period, including HCPCS code C9761, CPT codes 0499T, 55880, and
66174. Under our current policy, hospitals are expected to adhere to
the guidelines of correct coding and append the correct device code to
the claim when applicable and we believe our claims database represents
the most
[[Page 72065]]
accurate source of device cost information available to us. We do not
believe it would be appropriate to exclude in whole or in part the
available claims data that we have for ratesetting and for determining
device offset percentages.
Comment: Some commenters recommended that we refrain from wage-
adjusting the device portion of device-intensive procedures by the wage
index for that particular area and only wage-adjust non device portions
of the ASC payment rate. The commenters contend that wage-adjusting 50
percent of the ASC payment rate by the wage index for a particular area
can reduce ASC payment rates below the cost of certain devices.
Response: We appreciate the commenters' recommendation. We did not
propose such a change to our application of the ASC wage index but, as
we stated in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59042), such a policy would increase payment for providers with a
relatively low wage index (that is, a wage index value of less than 1)
and decrease it for providers with a relatively high wage index (that
is, a wage index value of greater than 1). We did not make such a
proposal, but we will consider the feasibility of this change and take
this comment into consideration for future rulemaking.
Comment: Commenters asked for further clarification on the source
of the ASC device offset amount when billing for devices that have
received transitional pass-through status under the OPPS and are
separately paid under the ASC payment system. Commenters contend the
procedure reduction in the ASC code pair file, which reflects the
device offset amount, conflicts with information found in Addendum FF.
Response: Addendum FF lists device offset percentages as well as
device portions for all ASC covered surgical procedures. The device
offset percentages are based on hospital outpatient cost data using the
ASC standard ratesetting methodology and are a main component in
determining whether or not a procedure can be assigned device-intensive
status under the ASC payment system. These percentages are not the
procedure reduction percentages that are found in the ASC code pair
file when billing for devices that have received transitional pass-
through status. In a footnote to the CY 2023 OPPS/ASC proposed rule
Addendum FF as well as Addendum FF to this final rule with comment
period, we have clarified this distinction. In this final rule with
comment period, we are restating that for device-intensive and non
device-intensive procedures, unless otherwise specified, the device
portion, which is found in Addendum FF, is the associated device offset
dollar amount when billing for devices that have received transitional
pass-through status under the OPPS and are separately paid under the
ASC payment system. The procedure reduction percentage that is applied
to the ASC payment rate which is found in the ASC code pair file can be
calculated by dividing the procedure's device portion by the ASC
payment rate.
Comment: One commenter requested that we consider a modification to
our established policy that would allow the continuation of the default
device offset of 31 percent for procedures for which there were fewer
than 100 claims used to calculate the device offset percentage.
Response: We appreciate the commenter's request. We are concerned
that such a policy would inaccurately assign device-intensive status to
procedures that would otherwise consistently be ineligible for device-
intensive assignment. While we do not believe at this time that
continuing the default device offset percentage over available claims
data would be an improvement to our methodology for determining device
offset amounts and device-intensive status for procedures for which
there were fewer than 100 claims used to calculate the device offset
percentage, we will take this comment into consideration for future
rulemaking.
Comment: One commenter recommended that we assign the device offset
percentage of CPT code 0627T (Percutaneous injection of allogeneic
cellular and/or tissue-based product, intervertebral disc, unilateral
or bilateral injection, with fluoroscopic guidance, lumbar; first
level) to 0629T (Percutaneous injection of allogeneic cellular and/or
tissue-based product, intervertebral disc, unilateral or bilateral
injection, with CT guidance, lumbar; first level) as both procedures
use the same device.
Response: For the CY 2023 OPPS/ASC proposed rule and this final
rule with comment period, we do not have any claims data for CPT code
0629T to determine a device offset percentage. Under our current
policy, we may assign an alternative device offset percentage if we
have claims data from a clinically similar procedure code that uses the
same device. We agree with commenters that this policy can apply to CPT
code 0629T, which is clinically similar to CPT code 0627T and uses the
same device as this procedure. Therefore, we are accepting the
commenter's recommendation and, for CY 2023, we are assigning the
device offset percentage of CPT code 0627T to CPT code 0629T and
assigning CPT code 0629T device-intensive status.
Comment: Commenters supported the proposed device offset
percentages for the following procedures:
CPT code 0671T (Insertion of anterior segment aqueous
drainage device into the trabecular meshwork, without external
reservoir, and without concomitant cataract removal, one or more);
HCPCS code C9764 (Revascularization, endovascular, open or
percutaneous, lower extremity artery(ies), except tibial/peroneal; with
intravascular lithotripsy, includes angioplasty within the same
vessel(s), when performed); and,
HCPCS code C9766 (Revascularization, endovascular, open or
percutaneous, lower extremity artery(ies), except tibial/peroneal; with
intravascular lithotripsy and atherectomy, includes angioplasty within
the same vessel(s), when performed).
Response: We appreciate the commenters' support. We are finalizing
our proposal to assign device-intensive status to CPT code 0671T, HCPCS
code C9764, and HCPCS code C9766. For final CY 2023 device offset
percentages based on available claims data for this final rule with
comment period, we refer readers to Addendum FF of this final rule with
comment period.
Comment: One commenter requested that we recalculate the device
offset percentages, and subsequent ASC payment rate, for procedures
performed with OPPS transitional pass-through device category C1748
(Endoscope, single-use (i.e. disposable), Upper GI, imaging/
illumination device (insertable)) after expiration of its transitional
pass-through status on July 1, 2023 for the July 2023 quarterly update.
Response: We appreciate the commenter's recommendation. For
procedures performed with transitional pass-through device categories
that expire on April 1st, July 1st, or October 1st, we use the best
claims data available to us to determine the procedures' applicable
device offset percentages and recalculate the ASC payment rate if
necessary.
Comment: One commenter requested that we not assign device-
intensive status to CPT code 0428T (Removal of neurostimulator system
for treatment of central sleep apnea; pulse generator only).
Response: We agree with the commenter that CPT code 0428T does not
involve significant device costs and
[[Page 72066]]
is therefore ineligible for device-intensive status under our current
policy. Therefore, for CY 2023, we are accepting the commenter's
recommendation and assigning an ASC payment indicator of ``G2''--Non
office-based surgical procedure added in CY 2008 or later; payment
based on OPPS relative payment weight.--to CPT code 0428T for CY 2023.
As discussed in more detail in section XIII.D.1.c of the CY 2023
OPPS/ASC proposed rule (87 FR 44712 through 44714), we proposed to
create a special payment policy under the ASC payment system whereby we
would add 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 proposed 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 the CY 2023 OPPS/ASC proposed rule.
The ASC covered surgical procedures that we proposed to designate
as device-intensive, and therefore subject to the device-intensive
procedure payment methodology for CY 2023, are assigned payment
indicator ``J8'' and are included in ASC Addendum AA and Addendum FF to
the CY 2023 OPPS/ASC proposed rule (which is available via the internet
on the CMS website at https://www.cms.gov/medicaremedicare-fee-service-paymentascpaymentasc-regulations-and-notices/cms-1772-p). The CPT code,
the CPT code short descriptor, the proposed CY 2023 ASC payment rate
are also included in Addendum AA to the CY 2023 OPPS/ASC proposed rule
(which is available via the internet on the CMS website at https://www.cms.gov/medicaremedicare-fee-service-paymentascpaymentasc-regulations-and-notices/cms-1772-p). We solicited public comments on
our proposal to assign device-intensive status to the new C codes that
we proposed to add to the ASC CPL as well as our methodology for
determining the device portion for such procedures.
Comment: Commenters were in support of our proposed device-
intensive methodology for the new C codes we proposed to add to the ASC
CPL and assign device-intensive status. Commenters asked that CMS
publicly share data on the impact of this policy and if any adjustments
are needed.
Response: We appreciate the commenters support of our proposal. We
intend to share with the public the impact of our new C code policy and
consider adjusting and refining this policy in future rulemaking.
After consideration of the public comments we received, we are
finalizing our proposal to assign device-intensive status to the new C
codes that we are adding to the ASC CPL for CY 2023 if the primary
procedure is assigned device-intensive status as well. We are also
finalizing our proposed methodology for determining the device portion
for such procedures. For CY 2023, the device-intensive payment
methodology for the new device-intensive C codes that we are adding to
the ASC CPL relies on the final device portions (calculated from the
final device offset percentages) using the CY 2021 OPPS claims and cost
report data available for this final rule with comment period. The ASC
covered surgical procedures that we are finalizing to designate as
device-intensive, and therefore subject to the device-intensive
procedure payment methodology for CY 2023, are assigned payment
indicator ``J8'' and are included in ASC Addendum AA and Addendum FF to
this CY 2023 OPPS/ASC final rule with comment period (which is
available via the internet on the CMS website). The CPT code, the CPT
code short descriptor, the final CY 2023 ASC payment rate are also
included in Addendum AA to the CY 2023 OPPS/ASC final rule with comment
period (which is available via the internet on the CMS website).
c. Adjustment to ASC Payments for No Cost/Full Credit and Partial
Credit Devices
Our ASC payment policy for costly devices implanted or inserted in
ASCs at no cost/full credit or partial credit is set forth in Sec.
416.179 of our regulations, and is consistent with the OPPS policy that
was in effect until CY 2014. We refer readers to the CY 2008 OPPS/ASC
final rule with comment period (72 FR 66845 through 66848) for a full
discussion of the ASC payment adjustment policy for no cost/full credit
and partial credit devices. ASC payment is reduced by 100 percent of
the device offset amount when a hospital furnishes a specified device
without cost or with a full credit and by 50 percent of the device
offset amount when the hospital receives partial credit in the amount
of 50 percent or more of the cost for the specified device.
Effective CY 2014, under the OPPS, we finalized our proposal to
reduce OPPS payment for applicable APCs by the full or partial credit a
provider receives for a device, capped at the device offset amount.
Although we finalized our proposal to modify the policy of reducing
payments when a hospital furnishes a specified device without cost or
with full or partial credit under the OPPS, in the CY 2014 OPPS/ASC
final rule with comment period (78 FR 75076 through 75080), we
finalized our proposal to maintain our ASC policy for reducing payments
to ASCs for specified device-intensive procedures when the ASC
furnishes a device without cost or with full or partial credit. Unlike
the OPPS, there is currently no mechanism within the ASC claims
processing system for ASCs to submit to CMS the amount of the actual
credit received when furnishing a specified device at full or partial
credit. Therefore, under the ASC payment system, we finalized our
proposal for CY 2014 to continue to reduce ASC payments by 100 percent
or 50 percent of the device offset amount when an ASC furnishes a
device without cost or with full or partial credit, respectively.
Under current ASC policy, all ASC device-intensive covered surgical
procedures are subject to the no cost/full credit and partial credit
device adjustment policy. Specifically, when a device-intensive
procedure is performed to implant or insert a device that is furnished
at no cost or with full credit from the manufacturer, the ASC would
append the HCPCS ``FB'' modifier on
[[Page 72067]]
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 did not receive any comments on our policies related to no/cost
full credit or partial credit devices, and we are continuing our
existing policies for CY 2023 and subsequent years.
d. Additions to the List of ASC Covered Surgical Procedures
Section 1833(i)(1) of the Act requires us, in part, to specify, in
consultation with appropriate medical organizations, surgical
procedures that are appropriately performed on an inpatient basis in a
hospital but that can also be safely performed in an ASC, a CAH, or an
HOPD, and to review and update the list of ASC 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).
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
[[Page 72068]]
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 proposed to update the ASC
CPL by adding one lymphatic procedure to the list for CY 2023, as shown
in Table 79 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 proposed to include this procedure on the ASC CPL for CY
2023.
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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.
Comment: Several specialty groups expressed broad support for
expanding the ASC CPL and adding the lymph node procedure that CMS
proposed to the ASC CPL for CY 2023. One hospital commenter disagreed
with expanding the CPL, citing undue safety risks for patients in the
ASC setting.
Response: We thank the commenters for their feedback. When adding
procedures to the ASC CPL, we evaluate them against the ASC CPL
criteria in order to ensure that the procedure is not expected to pose
a significant risk to beneficiary safety when performed in an ASC. As
medical practice continues to evolve and advance, more procedures are
able to be safely offered in the ASC setting for the typical Medicare
beneficiary. As we have determined that these procedures meet our
existing criteria such that they can be performed safely in the ASC
setting on the typical Medicare beneficiary, we disagree that they pose
an undue safety risk for patients in the ASC setting.
Comment: A few stakeholders expressed disappointment that CMS only
proposed to add one code for CY 2023. Multiple commenters recommended
specific codes that they believed met the criteria to be added to the
ASC CPL, including cardiovascular and cardiac ablation codes, thyroid-
related procedures, and electroconvulsive therapy. Several orthopedic
providers requested that total shoulder arthroplasty, total ankle
arthroplasty and lumbar spine fusion procedures be added to the CPL,
based on claims of safe and routine performance in ASCs, low infection
rates, and financial savings. We received 64 procedure recommendations
in total, listed in Table 80 below. Some of these recommendations were
accompanied by supporting literature or evidence, while other comments
only provided anecdotal evidence and simply stated general support for
these procedures to be furnished in the ASC setting.
Response: We thank commenters for their recommendations. We
individually assessed each of these 64 procedures, evaluating clinical
data on these procedures from multiple sites of services, reviewing the
literature and experiential data provided in public comments, and
examining claims volume to determine whether these procedures meet each
of the regulatory criteria at 42 CFR 416.166.
Based on our review of the clinical characteristics of the
procedures and their similarity to other procedures that are currently
on the ASC CPL, we believe that four procedures (CPT codes 19307,
37193, 38531, and 43774) out of the 64 procedure recommendations we
received can be safely performed for the typical beneficiary in the ASC
setting and meet the general standards and exclusion criteria for the
ASC CPL as set forth in 42 CFR 416.166(b) and (c), respectively. This
includes CPT code 38531, which we proposed to add to the CPL in the CY
2023 OPPS/ASC proposed rule. These four codes correspond to procedures
that have few to no inpatient admissions and are largely performed in
outpatient settings. We agree with commenters who provided evidence
stating that these procedures can be safely performed in an ASC
setting. These procedures, listed in Table 81 below, are:
CPT 19307 (Mastectomy, modified radical, including
axillary lymph nodes, with or without pectoralis minor muscle, but
excluding pectoralis major muscle)
CPT 37193 (Retrieval (removal) of intravascular vena cava
filter, endovascular approach including vascular access, vessel
selection, and radiological supervision and interpretation,
intraprocedural roadmapping, and imaging guidance (ultrasound and
fluoroscopy), when performed)
CPT 38531 (Biopsy or excision of lymph node(s); open,
inguinofemoral node(s))
CPT 43774 (Laparoscopy, surgical, gastric restrictive
procedure; removal of
[[Page 72069]]
adjustable gastric restrictive device and subcutaneous port components)
Due to patient safety concerns, we believe the remaining
recommended procedures should not be added to the ASC CPL. We explain
our rationale for not including the 60 remaining recommended procedures
below, organized by anatomical category.
20 vascular codes, including arterial revascularization,
coronary atherectomies, and vena cava filter insertion or removal
procedures. Many of these procedures have associated inpatient
admissions, where the beneficiary requires active medical monitoring
and care at midnight following the procedure. Additionally, a number of
these procedures would pose a significant safety risk to beneficiaries
without post-operative inpatient care and because patients requiring
these procedures are often higher risk at baseline. Some of the
vascular codes recommended in the CPT 90000 series were also non-
surgical procedures, which means they would not qualify for addition to
the ASC CPL or the ancillary services list, as they are not integral to
a covered surgical procedure.
4 gastrointestinal codes, including paraesophageal hernia
repairs, laparoscopic esophagogastric fundoplasty, laparoscopic
enterolysis, appendectomy, and laparoscopic gastric restrictive
procedures. While some of these procedures show increasing outpatient
volume, many still have inpatient admissions and potential procedure
risks, indicating that the beneficiary would require active monitoring
and care past midnight following the procedure. Additionally, these
procedures can involve prolonged invasion of body cavities, and be
life-threatening or emergent in nature. Additionally, several of these
procedures are less commonly done in Medicare patients and more
frequently performed in a younger population.
6 musculoskeletal codes, including total shoulder and
ankle arthroplasty procedures as well as lumbar spine fusion
procedures. Although a few of these procedures have some claims volume
in the outpatient setting, many of them are also complex procedures
with inpatient admissions and multiple post-operative inpatient days,
where infections and need for intravenous antibiotics are not uncommon
events, indicating that the beneficiary would require active monitoring
and care past midnight following the procedure. In addition, we
acknowledge the findings of studies that commenters provided related to
these procedures. However, the studies we received had significant
limitations including selection bias, an absence of age groups
representative of the Medicare population, and a lack of
generalizability to different types of ASCs around the country.
4 endocrine codes, including thyroidectomy and
parathyroidectomy procedures. While these procedures have increasing
outpatient volume, there are inpatient admissions associated with these
procedures, indicating the beneficiary would be expected to stay past
midnight following the procedure. Additionally, the intraservice time
for these procedures can vary greatly, often becoming a prolonged
invasion of body cavities.
2 nervous system codes, including laminectomy and
laminotomy procedures. These codes have associated inpatient admissions
and post-operative days, indicating that the beneficiary would require
active monitoring and care past midnight following the procedure. Many
of these procedures also pose a significant safety risk to the
beneficiary when close post-operative neurosurgical surveillance is not
frequently provided.
24 medicine codes, including electroconvulsive therapy,
cardioversion, echocardiography, esophageal recordings, intra-atrial
and intra-ventricular recordings, comprehensive electrophysiologic
evaluations. These codes are inherently non-surgical and would not
qualify for the ASC CPL or the ancillary services list, as they are not
integral to a covered surgical procedure.
Given these considerations, we believe that these 60 codes do not
meet the proposed criteria to be included on the ASC CPL due to the
following factors: inpatient admissions, multiple-day stays past
midnight, safety risks to the typical beneficiary without active post-
operative monitoring, involvement of major blood vessels, prolonged
invasion of a body cavity, the risk of being life threatening or
emergent, less common in Medicare beneficiaries, or are non-surgical.
However, as medical practice continues to evolve, we recognize that
there will be additional advancements and improvements that may allow
these procedures to be safely offered in the ASC setting for the
typical Medicare beneficiary. We believe that there is potential for
some of the procedures recommended but not added to the ASC CPL to be
added in the future if there is adequate evidence that these procedures
meet our criteria and can be safely performed on the typical Medicare
beneficiary in the ASC setting. We encourage interested parties to
continue to submit this information in future rulemaking.
Therefore, in this CY 2023 OPPS/ASC final rule with comment period,
we are finalizing four procedures to be added to the ASC CPL. These
procedures are listed below in Tables 80 and 81 of this CY 2023 OPPS/
ASC final rule with comment period.
Comment: Commenters also offered suggestions on different
approaches for CMS to consider when approaching the ASC CPL, including
providing a rationale for each procedure that is added or denied,
noting that CMS has previously stated they would disclose this
information; standardizing CPL additions by covering all surgical
procedures paid separately under the OPPS, unless the procedure meets
the exclusionary criteria; offering additional guidance on the
definition of the ``typical Medicare beneficiary''; and allowing
clinicians to decide whether their patients are eligible for care in an
ASC.
Response: We thank the commenters for their suggestions and will
take these suggestions into consideration for future rulemaking. CMS
has provided rationales for denying codes in both CY 2022 and CY 2023.
We provide rationales in code buckets, rather than for each individual
code, because this format captures and conveys the various reasons we
do not believe these procedures meet the ASC CPL criteria in a succinct
and non-repetitive manner. We believe that all procedures that meet our
ASC CPL criteria are currently on the ASC CPL and that standardizing
this process by adding all eligible procedures paid separately under
the OPPS would not change the list of ASC covered surgical procedures.
In the CY 2022 OPPS/ASC final rule, we provided a detailed rationale
for why we believe that CMS is in the position to make safety
determinations for the broader population of Medicare beneficiaries,
while physicians can make safety decisions for their specific
beneficiaries (86 FR 63777 through 63779). We also provided additional
context on the typical Medicare beneficiary, whose health status is
representative of the broader Medicare population, and we believe this
information is sufficient to understand the typical Medicare
beneficiary terminology without additional clarification at this time.
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BILLING CODE 4120-01-C
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 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 proposed
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 believed 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 proposed to revise the start date of
the
[[Page 72076]]
recommendation process in the regulatory text. We proposed 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 welcomed all procedure submissions through the public
comment process, as we have in previous years.
Comment: Several commenters supported the clarification of the
future pre-proposed rule recommendation process. A few commenters noted
that they still preferred the term ``Nominations.'' Some commenters
stated that they prefer the proposed process as it encourages CMS
transparency, and some commenters urged CMS to implement this proposal
without delay.
Response: We thank the commenters for their input on this process.
After consideration of the public comments we received, we are
finalizing the proposal 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''
and revise the start date of the recommendation process to January 1,
2024 in the regulatory text.
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'' is used in Addendum BB (which is available via the internet on
the CMS website) to indicate covered ancillary services for which we
proposed a change in the ASC payment indicator to reflect a proposed
change in the OPPS treatment of the service for CY 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 CY 2023 OPPS/ASC final rule. All
ASC covered ancillary services and their final payment indicators for
CY 2023 are also included in Addendum BB to the CY 2023 OPPS/ASC
proposed rule (which is available via the internet on the CMS website).
D. Update and Payment for ASC Covered Surgical Procedures and Covered
Ancillary Services
1. Final 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 CY 2023 OPPS/ASC final 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 (non-
device) 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 CY 2023 OPPS/ASC final 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
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.
[[Page 72077]]
b. Update to ASC Covered Surgical Procedure Payment Rates for CY 2023
We proposed 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 CY 2023 OPPS/ASC final rule. As
the proposed OPPS relative payment weights are generally based on
geometric mean costs, we proposed that the ASC payment system will
generally use the geometric mean cost to determine proposed relative
payment weights under the ASC standard methodology. We proposed to
continue to use the amount calculated under the ASC standard
ratesetting methodology for procedures assigned payment indicators
``A2'' and ``G2''.
We proposed to calculate payment rates for office-based procedures
(payment indicators ``P2'', ``P3'', and ``R2'') and device-intensive
procedures (payment indicator ``J8'') according to our established
policies and to identify device-intensive procedures using the
methodology discussed in section XII.C.1.b of this CY 2023 OPPS/ASC
final rule. Therefore, we proposed 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 proposed 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 proposed to
continue our policy for device removal procedures, such that device
removal procedures that are conditionally packaged in the OPPS (status
indicators ``Q1'' and ``Q2'') will be assigned the current ASC payment
indicators associated with those procedures and will continue to be
paid separately under the ASC payment system.
Comment: A few commenters expressed concerns about the lack of a
cap on beneficiary coinsurance when a procedure is performed in the ASC
setting while there is a statutory cap on beneficiary coinsurance when
a procedure is performed in the HOPD setting. The commenters believe
the lack of such a cap poses a financial challenge for beneficiaries,
particularly with respect to transitional pass-through devices and
higher-cost procedures that are device intensive, because in such
cases, the coinsurance could be higher in the ASC setting than in the
HOPD setting. The commenters stated their belief that ASCs are
disadvantaged by the lack of a cap on coinsurance and believe this
presents a beneficiary access issue. They request that CMS encourage
the Congress to create a cap on coinsurance for services provided in
the ASC setting.
Response: We thank the commenters for their input but note that
comments related to statutory changes are out of scope for this final
rule.
We did not receive any comments on the broader rate calculation
methodologies for these procedures and we are finalizing our proposed
policies without modification to calculate the CY 2023 payment rates
for ASC covered surgical procedures according to our established rate
calculation methodologies under Sec. 416.171 and using the modified
definition of device-intensive procedures as discussed in section
XIII.C.1.b. of this CY 2023 OPPS/ASC final rule with comment period.
For covered office-based surgical procedures, the payment rate is the
lesser of the final CY 2022 MPFS nonfacility PE RVU-based amount or the
final CY 2023 ASC payment amount calculated according to the ASC
standard ratesetting methodology. The final payment indicators and
rates set forth in this final rule with comment period are based on a
comparison using the PFS PE RVUs and the conversion factor effective
January 1, 2023. For a discussion of the PFS rates, we refer readers to
the CY 2023 PFS final rule with comment period, which is available on
the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
c. ASC Payment for Combinations of Primary and Add-On Procedures
Eligible for Complexity Adjustments Under the OPPS
In this section we proposed 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 CY 2023 OPPS/ASC final 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 CY 2023 OPPS/ASC final 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
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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).
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 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 the CY 2023 OPPS/ASC proposed rule, 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 estimated 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 proposed 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 proposed to add new Sec. 416.172(h) to
codify this policy.
We proposed 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 proposed 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 proposed
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
[[Page 72079]]
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 proposed new C codes to add to the ASC CPL. These C
codes for CY 2023 can be found in the ASC addenda. We proposed to add
new Sec. 416.172(h)(1), titled Eligibility, to codify this policy.
We proposed the following payment methodology for this proposed
policy, which we would reflect in new Sec. 416.172(h)(2), titled
Calculation of Payment. We proposed 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 proposed 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 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 proposed 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 proposed to add new Sec. 416.172(h)(2)(i) to codify
this policy.
As discussed in section XIII.C.1.b of the CY 2023 OPPS/ASC proposed
rule (87 FR 44708), 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 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 proposed 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 proposed 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 proposed 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 welcomed comments on this proposal, including comments or
suggestions regarding additional approaches that we should consider for
this policy.
Comment: All of the commenters who responded to this policy were
supportive of providing a complexity adjustment for complex procedures
in the ASC setting and urged CMS to finalize the ASC special payment
policy for OPPS complexity adjusted C-APCs, as proposed. Commenters
noted they believed this approach would result in more appropriate
payments for those ASC procedures that require greater resources than
the individual primary service and align with other site neutral
payment policies. They recommended CMS continue to address any ASC
payments that could interfere with meaningful beneficiary access to ASC
covered services.
[[Page 72080]]
Response: We thank the commenters for their support.
Comment: Several commenters noted that they have received feedback
and questions from ASC providers asking for additional detail on the
specific HCPCS code combinations that correspond to the new C-codes.
These commenters requested that CMS publish an addendum file or
worksheet that lists the primary and secondary procedure HCPCS code,
the new C-code to which they are assigned, and the final payment rate
to ensure coding compliance and ease of implementation. Commenters
believe this information will also allow for easier comparison for
year-to-year changes in coding combinations that qualify for this
special payment policy.
Response: We thank the commenters for their input. We are providing
a supplemental file to the ASC addenda that includes the requested
information that be found at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/ASC-Regulations-and-Notices.
Comment: Several commenters recommended that CMS annually analyze
and publicly share the impact of this new policy to assess if further
adjustments to the methodology are needed. One commenter specifically
noted this request in the context of retaining the device-intensive
status of the primary procedure, as well as the device portion of the
primary procedure rather than the device offset percentage.
Response: We thank the commenters for their feedback. We anticipate
reviewing this policy annually during future rulemaking.
Comment: A few commenters noted that it is unclear why CMS proposed
to create specific C-codes for these procedure combinations in the ASC
payment system, unless there are claims processing limitations. They
recommended CMS utilize the combination of the qualifying HCPCS codes
to automatically trigger the adjusted payment level, rather than
creating specific C-codes for ASC billing that may create confusion and
unnecessary administrative burden.
Response: The ASC claims processing system cannot accommodate the
complexity adjustment payment mechanism that we are finalizing, so we
believe that the best option for implementation of this policy is to
create C codes that represent the code combination.
After consideration of the public comments we received, we are
finalizing the ASC special payment policy for OPPS complexity-adjusted
C-APCs, as proposed. The final C codes for CY 2023 can be found in ASC
addendum AA.
d. 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 the CY 2023 OPPS/ASC proposed
rule, the ASC payment system generally uses OPPS geometric mean costs
under the standard methodology to determine proposed relative payment
weights under the standard ASC ratesetting methodology (87 FR 44712).
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 the CY 2023 OPPS/ASC proposed
rule, we proposed to designate 4 brachytherapy APCs and 4 clinical APCs
as Low Volume APCs under the ASC payment system (87 FR 44714 through
44175). The 4 clinical APCs and 4 brachytherapy APCs shown in Table 58
of the CY 2023 OPPS/ASC proposed rule (87 FR 44715) met our criteria of
having fewer than 100 single claims in the claims year (CY 2021 for the
CY 2023 OPPS/ASC proposed rule) and therefore, we proposed 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
not meet our claims threshold for the CY 2023 OPPS/ASC proposed rule.
We did not receive any public comments on our proposal to assign
the 4 brachytherapy APCs and 4 clinical APCs as Low Volume APCs under
the ASC payment system. Based on claims data available for this final
rule with comment period, we are finalizing our proposal to designate
the 4 brachytherapy APCs and 4 clinical APCs shown in Table 82 as Low
Volume APCs under the ASC payment system, because they continue to meet
our criteria of having fewer than 100 single claims in the relevant
claims year (2021). The APC cost metric for these APCS are based on the
greatest of the median cost, arithmetic mean cost, or geometric mean
cost using up to 4 years of claims data, as proposed.
[[Page 72081]]
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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).
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
[[Page 72082]]
the ASC standard ratesetting methodology rather than the MPFS
nonfacility PE RVU amount (``Z3''), regardless of which is lower (Sec.
416.171(d)(1)).
Similarly, we also finalized our policy to set the payment
indicator to ``Z2'' for radiology services that use contrast agents so
that payment for these procedures will be based on the OPPS relative
payment weight using the ASC standard ratesetting methodology and,
therefore, will include the cost for the contrast agent (Sec.
416.171(d)(2)).
ASC payment policy for brachytherapy sources mirrors the payment
policy under the OPPS. ASCs are paid for brachytherapy sources provided
integral to ASC covered surgical procedures at prospective rates
adopted under the OPPS or, if OPPS rates are unavailable, at
contractor-priced rates (72 FR 42499). Since December 31, 2009, ASCs
have been paid for brachytherapy sources provided integral to ASC
covered surgical procedures at prospective rates adopted under the
OPPS.
Our ASC policies also provide separate payment for: (1) certain
items and services that CMS designates as contractor-priced, including,
but not limited to, the procurement of corneal tissue; and (2) certain
implantable items that have pass-through payment status under the OPPS.
These categories do not have prospectively established ASC payment
rates according to ASC payment system policies (72 FR 42502 and 42508
through 42509; Sec. 416.164(b)). Under the ASC payment system, we have
designated corneal tissue acquisition and hepatitis B vaccines as
contractor-priced. Corneal tissue acquisition is contractor-priced
based on the invoiced costs for acquiring the corneal tissue for
transplantation. Hepatitis B vaccines are contractor-priced based on
invoiced costs for the vaccine.
Devices that are eligible for pass-through payment under the OPPS
are separately paid under the ASC payment system and are contractor-
priced. Under the revised ASC payment system (72 FR 42502), payment for
the surgical procedure associated with the pass-through device is made
according to our standard methodology for the ASC payment system, based
on only the service (non-device) portion of the procedure's OPPS
relative payment weight if the APC weight for the procedure includes
other packaged device costs. We also refer to this methodology as
applying a ``device offset'' to the ASC payment for the associated
surgical procedure. This ensures that duplicate payment is not provided
for any portion of an implanted device with OPPS pass-through payment
status.
In the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933
through 66934), we finalized that, beginning in CY 2015, certain
diagnostic tests within the medicine range of CPT codes for which
separate payment is allowed under the OPPS are covered ancillary
services when they are integral to an ASC covered surgical procedure.
We finalized that diagnostic tests within the medicine range of CPT
codes include all Category I CPT codes in the medicine range
established by CPT, from 90000 to 99999, and Category III CPT codes and
Level II HCPCS codes that describe diagnostic tests that crosswalk or
are clinically similar to procedures in the medicine range established
by CPT. In the CY 2015 OPPS/ASC final rule with comment period, we also
finalized our policy to pay for these tests at the lower of the PFS
nonfacility PE RVU-based (or technical component) amount or the rate
calculated according to the ASC standard ratesetting methodology (79 FR
66933 through 66934). We finalized that the diagnostic tests for which
the payment is based on the ASC standard ratesetting methodology be
assigned to payment indicator ``Z2'' and revised the definition of
payment indicator ``Z2'' to include a reference to diagnostic services
and those for which the payment is based on the PFS nonfacility PE RVU-
based amount be assigned payment indicator ``Z3,'' and revised the
definition of payment indicator ``Z3'' to include a reference to
diagnostic services.
Comment: One commenter recommended that we publish guidance on how
MACs are to calculate transitional pass-through payments under the ASC
payment system for devices that are eligible for pass-through payment
under the OPPS similar to how such guidance is provided under the OPPS.
The commenter specifically recommended that CMS specify that J7 payment
should be at least equal to the device cost, as reported by the ASC in
box 19 or the electronic equivalent.
Response: As previously discussed, devices that are eligible for
pass-through payment under the OPPS are separately paid under the ASC
payment system and are contractor-priced. Transitional pass-through
payments under the OPPS utilize hospital cost-to-charge ratios to
reduce the pass-through device to cost and provide the hospital an
additional payment of the amount by which cost of the pass-through
device exceeds the applicable device offset amount. ASCs do not submit
cost reports and, as such, we are unable to replicate the OPPS
transitional pass-through payment under the ASC payment system.
Currently, MACs have been instructed to pay for such devices in the ASC
setting based on invoice or cost. Because the calculation for
transitional pass-through payments in the OPPS is different from the
calculation for such payments in the ASC payment system, we believe the
current guidance provided in Section 40, Chapter 14 of the Medicare
Claims Processing Manual is sufficient.
b. Final Payment for Covered Ancillary Services for CY 2023
We are finalizing our proposal 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 final CY 2023
OPPS and ASC payment rates and subsequent years' payment rates. We are
also finalizing our proposal 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 final payment indicators for
CY 2023 are listed in Addendum BB of the CY 2023 OPPS/ASC final 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 final
rates (similar to our office-based payment policy), the final payment
indicators and rates set forth in the CY 2023 OPPS/ASC final rule are
based on a comparison using the final PFS rates effective January 1,
2023. For a discussion of the PFS rates, we refer readers to the CY
2023 PFS final rule, which is available on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
3. Requirement in the Physician Fee Schedule CY 2023 Proposed and Final
Rule for 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
[[Page 72083]]
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 proposed 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 proposed 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.
As explained in the OPPS/ASC proposed rule (87 FR 44717), because
the CY 2023 PFS proposed rule proposed to codify certain billing
requirements for HOPDs and ASCs, we explained in the proposed rule that
we wanted to ensure interested parties are aware of them and knew to
refer to that rule for a full description of the proposed policy.
Interested parties were asked to 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. We stated that public
comments on these proposals will be addressed in the CY 2023 PFS final
rule. We note that this same notice appeared in section V.A.C. of the
CY 2023 OPPS/ASC proposed rule (87 FR 44716).
We thank commenters for their feedback on this proposal. As
indicated in the OPPS/ASC proposed rule (87 FR 44717), public comments
on the policies discussed above will be addressed in the CY 2023 PFS
proposed rule. For final details on this policy, we refer readers to
the CY 2023 PFS final rule, which is available on the CMS website at:
https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We note that
this same notice appears in section V.A.C. of this CY 2023 OPPS/ASC
final rule with comment period.
4. Inflation Reduction Act--Section 11101 Regarding Beneficiary Co-
Insurance
On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) (Pub.
L. 117-169) was signed into law. Section 11101 of the Inflation
Reduction Act requires a drug manufacturer to pay a rebate if the ASP
of their drug product rises at a rate that is faster than the rate of
inflation. Section 11101(b) of the IRA amended sections 1833(i) and
1833(t)(8) by adding a new paragraph (9) and subparagraph (F),
respectively, that specify coinsurance under the ASC and OPPS payment
systems. Section 1833(i)(9) requires that under the ASC payment system
beneficiary coinsurance for a Part B rebatable drug that is not
packaged to be calculated using the inflation-adjusted amount when that
amount is less than the otherwise applicable payment amount for the
drug furnished on or after April 1, 2023. Section 1833(t)(8)(F)
requires that under the OPPS payment system beneficiary copayment for a
Part B rebatable drug (except for a drug that has no copayment applied
under subparagraph (E) of such section or packaged into the payment for
a procedure) is to be calculated using the inflation-adjusted amount
when that amount is less than ASP plus 6 percent beginning April 1,
2023. Sections 1833(i)(9) and 1833(t)(8)(F) reference sections
1847A(i)(5) for the computation of the beneficiary coinsurance and
1833(a)(1)(EE) for the computation of the payment to the ASC or
provider and state that the computations would be done in the same
manner as described in such provisions. The computation of the
coinsurance is described in section 1847A(i); specifically, in
computing the amount of any coinsurance applicable under Part B to an
individual to whom such Part B rebatable drug is furnished, the
computation of such coinsurance shall be equal to 20 percent of the
inflation-adjusted payment amount determined under section
1847A(i)(3)(C) for such Part B rebatable drug. The calculation of the
payment to the provider or ASC is described in section 1833(a)(1)(EE),
and the provider or ASC would be paid the difference between the
beneficiary coinsurance of the inflation-adjusted amount and the ASP
plus 6 percent. We wish to make readers aware of this statutory change
that begins April 1, 2023. Additionally, we refer readers to the full
text of the IRA.\154\ Additional details on the implementation of
section 11101 of the IRA are forthcoming and will be communicated
through a vehicle other than the CY 2023 OPPS/ASC regulation.
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\154\ H.R. 5376 available online at: https://www.congress.gov/bill/117th-congress/house-bill/5376/text.
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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
[[Page 72084]]
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
through 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), 416.171(b)(1), and 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 83 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).
[GRAPHIC] [TIFF OMITTED] TR23NO22.119
[[Page 72085]]
2. Eligibility Criteria Technical Clarification and Final 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. In the CY 2023 OPPS/ASC proposed rule, we proposed 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 proposed 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 proposed 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.
Comment: We received several comments from interested parties
acknowledging the two technical changes outlined above. Commenters were
generally supportive of this action and believed these technical
changes to the regulation text were appropriate.
Response: We appreciate the support of commenters.
After consideration of the public comments we received, we are
finalizing as proposed the modifications to 416.174 to reflect our
current policy as follows. We are finalizing Sec. 416.174(a)(3), which
states 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 are finalizing Sec. 416.174(a)(4), which states
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. Final 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 the CY 2023 OPPS/
ASC proposed rule, the OPPS drug packaging threshold was proposed to be
$135. As discussed in section V.B.1.a of this CY 2023 OPPS/ASC final
rule with comment period, the OPPS drug packaging threshold is
finalized to be $135.
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
welcomed stakeholder comment on these evaluations.
a. 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 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 proposed to that section, to determine
whether they continue to qualify for separate payment in CY 2023. Based
on our evaluation, we proposed 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 proposed 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 CY 2023 OPPS/ASC final rule with comment period for additional
details on the pass-through status of HCPCS code C9088. We welcomed
comment on our evaluations below.
(a) Eligibility Evaluation for the Separate Payment of Exparel
Based on our internal review as described in the proposed rule, we
believed 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 proposed to that
section, and we
[[Page 72086]]
proposed to continue paying separately 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.\155\ 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''.\156\ No component of Exparel is opioid-based.
Accordingly, we proposed that Exparel meets the criterion described at
Sec. 416.174(a)(1). Under the methodology described at V.B.1.a. of the
CY 2023 OPPS/ASC proposed rule (87 FR 44641 through 44643), the per-day
cost of Exparel exceeds the proposed $135 per-day cost threshold.
Therefore, we proposed 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 proposed that Exparel meets the criteria we proposed to
add to the regulation text at Sec. 416.174(a)(3) and (4).
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\155\ Exparel. FDA Letter. 28 October 2011. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2011/022496s000ltr.pdf.
\156\ Exparel. FDA Package Insert. 22 March 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/022496s035lbl.pdf.
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Based on the above discussion, we believed that Exparel meets the
criteria described at Sec. 416.174 and we proposed 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.
Comment: There was overall general support for our proposal to pay
separately in the ASC setting for the four drugs proposed in the
proposed rule. Specifically, commenters supported Exparel having
separately payable status in the ASC setting. Commenters believed that
Exparel continued to meet the criteria specified in Sec. 416.174,
including the proposed technical clarification. Commenters additionally
provided clinical information supporting Exparel's use to ``reduce or
even replace use of postsurgical opioid pain medication.'' Commenters
strongly advocated for Exparel to be paid separately in the HOPD
setting, as well the ASC setting, citing various rationales, including
patients in HOPDs being more medically complex than those in ASCs,
increased access to HOPDs for certain populations compared to ASCs, and
decreased utilization of Exparel in HOPDs compared to ASCs.
Response: We thank commenters for their support on our proposal to
pay separately for Exparel in the ASC setting as a non-opioid pain
management drug that functions as a surgical supply. We greatly
appreciate the additional information provided by commenters regarding
the clinical use of the drug. We refer readers to section II.3.b. of
this final rule with comment period for our discussion on the comment
solicitation regarding payment of non-opioid drugs and biologicals that
function as surgical supplies in the HOPD setting.
After consideration of the public comments we received, we believe
that Exparel, described by HCPCS code C9290 (Injection, bupivacaine
liposome, 1 mg), continues to meet the criteria described at Sec.
416.174, including the technical clarifications we proposed and are
finalizing to that section. We note that our proposed rule evaluation
continues to be accurate. We are finalizing that we will continue to
pay separately for Exparel 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) Eligibility Evaluation for the Separate Payment of Omidria
Based on our internal review as discussed in the proposed rule, we
believed 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 proposed
to continue paying separately 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.\157\ 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''.\158\ No component
of Omidria is opioid-based. Accordingly, we proposed that Omidria meets
the criterion described at Sec. 416.174(a)(1). Under the methodology
described at V.B.1.a of the CY 2023 OPPS/ASC proposed rule (87 FR 44641
through 44643), the per-day cost of Omidria exceeds the proposed $135
per-day cost threshold. Therefore, we proposed 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 proposed
that Omidria meets the criteria we proposed to add to the regulation
text at Sec. 416.174(a)(3) and (4).
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\157\ Omidria. FDA Letter. 30 May 2014. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2014/205388Orig1s000ltr.pdf.
\158\ Omidria. FDA Package Insert. December 2017. https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/205388s006lbl.pdf.
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Based on the above discussion, we proposed 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.
Comment: There was overall general support for our proposal to pay
separately in the ASC setting for the four drugs proposed in the
proposed rule. Specifically, commenters supported Omidria having
separately payable status in the ASC setting. Commenters also provided
updated clinical information regarding the use of Omidria and
demonstrated how separate payment of Omidria in the ASC setting has
supported utilization of the drug.
Response: We thank commenters for their support and for their
helpful comments and data analysis regarding the use of Omidria across
different settings of care.
After consideration of the public comments we received, 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),
continues to meet the criteria described at Sec. 416.174, including
the technical clarifications we proposed and are finalizing to that
section. We note that our proposed rule evaluation continues to be
accurate. We are finalizing that we will continue to pay separately for
Omidria 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) Eligibility Evaluation for the Separate Payment of Xaracoll
Based on our internal review as discussed in the proposed rule, we
believed Xaracoll, described by C9089 (Bupivacaine, collagen-matrix
implant, 1 mg), meets the criteria described at Sec. 416.174(a), and
we proposed to continue paying separately for it under
[[Page 72087]]
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.\159\ 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''.\160\ No component of Xaracoll is opioid-based.
Accordingly, we proposed that Xaracoll meets the criterion described at
Sec. 416.174(a)(1). Under the methodology described at section
V.B.1.a. of the CY 2023 OPPS/ASC proposed rule (87 FR 44641 through
44643), the per-day cost of Xaracoll exceeds the proposed $135 per-day
cost threshold. Therefore, we proposed 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
proposed that Xaracoll meets the criteria we proposed to add to the
regulation text at Sec. 416.174(a)(3) and (4).
---------------------------------------------------------------------------
\159\ Xaracoll. FDA Letter. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2020/209511Orig1s000ltr.pdf.
\160\ Xaracoll. FDA Labeling. August 2020. https://www.accessdata.fda.gov/drugsatfda_docs/label/2020/209511s000lbl.pdf.
---------------------------------------------------------------------------
Based on the above discussion, we proposed that Xaracoll 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.
Comment: There was overall general support for our proposal to pay
separately in the ASC setting for the four drugs proposed in the
proposed rule. Specifically, commenters supported Xaracoll having
separately payable status in the ASC setting. Commenters believed that
Xaracoll continued to meet the criteria specified in Sec. 416.174.
Commenters additionally provided references to clinical literature
supporting the effectiveness of Xaracoll as a pain management
alternative to opioids.
Response: We thank commenters for their support on our proposal to
pay separately for Xaracoll in the ASC setting as a non-opioid pain
management drug that functions as a surgical supply. We greatly
appreciate the additional information provided by commenters regarding
the clinical use of the drug.
After consideration of the public comments we received, we believe
that Xaracoll, described by C9089 (Bupivacaine, collagen-matrix
implant, 1 mg), meets the criteria described at Sec. 416.174,
including the technical clarifications we proposed and are finalizing
to that section. We note that our proposed rule evaluation continues to
be accurate. We are finalizing that we will continue to pay separately
for Xaracoll 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) Eligibility Evaluation for the Separate Payment of Zynrelef
Based on our internal review as described in the proposed rule, we
believed that Zynrelef, described by HCPCS code C9088 (Instillation,
bupivacaine and meloxicam, 1 mg/0.03 mg), does not meet the criteria
described at Sec. 416.174, including the technical clarifications we
proposed to that section, and we proposed not to pay separately for it
under the ASC payment system policy for non-opioid pain management
drugs and biologicals that function as surgical supplies for CY 2023.
Zynrelef 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 proposed 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 the CY 2023 OPPS/ASC proposed rule (87 FR 44641 through 44643)
that its pass-through status will not expire until after CY 2023.
Accordingly, we proposed 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.
Comment: Commenters expressed concerns with CMS no longer paying
for Zynrelef under the policy at Sec. 416.174. Specifically,
commenters believed this drug should still receive separate payment as
they believed the drug is beneficial for patients in managing their
pain. Commenters also asked CMS to evaluate this drug for inclusion
under the non-opioid pain management payment policy after the
expiration of the drug's pass-through status on March 31, 2025, in
order to ensure continued patient access.
Response: We thank the commenters for their feedback. However,
under our current policy, which we are codifying in this final rule at
Sec. 416.174, Zynrelef is not eligible for separate payment in the ASC
setting as a non-opioid pain management drug that functions as a supply
in a surgical procedure, because it is already separately payable as a
pass-through drug under Sec. 419.64. We note for commenters that
Zynrelef will still be separately paid in both the ASC and HOPD
settings under its current pass-through status. Please see section V.A
(OPPS Transitional Pass-Through Payment for Additional Costs of Drugs,
Biologicals, and Radiopharmaceuticals) of this CY 2023 OPPS/ASC final
rule with comment period for additional details on transitional drug
pass-through payments.
Because Zynrelef receives separate payment consistent with its drug
pass-through approval under Sec. 419.64, and its approval will not
expire until after CY 2023, we are finalizing our proposal that
Zynrelef is not 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. This is consistent with the
technical changes we are finalizing to the regulation text at Sec.
416.174(a)(3) and (4) and our current policy. We will evaluate this
drug again when its pass-through status is set to expire, if
appropriate, and if requested by interested parties.
b. Final Evaluations of Newly Eligible Non-Opioid Alternatives
In this section, we evaluate drugs or biologicals, of which we were
aware as of the CY 2023 OPPS/ASC proposed rule, that we believed 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). In the proposed rule, 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 proposed to
that section. We proposed that Dextenza
[[Page 72088]]
receive separate payment in the ASC setting as a non-opioid pain
management drug that functions as a surgical supply for CY 2023. We
welcomed stakeholder comment on this evaluation.
(a) Eligibility Evaluation for the Separate Payment of Dextenza
Based on our internal review as described in the proposed rule, we
believed Dextenza, described by HCPCS code J1096 (Dexamethasone,
lacrimal ophthalmic insert, 0.1 mg), meets the criteria described at
Sec. 416.174; and we proposed 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.\161\ 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''.\162\ No component of Dextenza is opioid-based.
Accordingly, we stated our belief that Dextenza meets the criterion
described at Sec. 416.174(a)(1). Under the methodology described at
V.B.1.a. of the CY 2023 OPPS/ASC proposed rule (87 FR 44641 through
44643), 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 did not
believe that it would 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 proposed that Dextenza meets the criteria
described at 416.174, including the criteria we proposed to add to the
regulation text at Sec. 416.174(a)(3) and (4), 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.
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\161\ Dextenza. FDA Letter. November 2018. https://www.accessdata.fda.gov/drugsatfda_docs/nda/2018/208742Orig1s000Approv.pdf.
\162\ Dextenza. FDA Labeling. October 2021. https://www.accessdata.fda.gov/drugsatfda_docs/label/2021/208742s007lbl.pdf.
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Comment: There was broad general support for the separate payment
of Dextenza. Some commenters provided non-specific statements of
support for separate payment, while others advocated for separate
payment in the ASC specifically and urged CMS to finalize its proposal
to pay for Dextenza separately in the ASC setting as a non-opioid pain
management drug. These commenters also contended that Dextenza may not
function as a surgical supply and should be paid separately in both the
HOPD and ASC setting.
Response: We thank commenters for their responses. We believe this
drug is mostly used during ophthalmic surgeries, such as cataract
surgeries. The status of this drug as a surgical supply is consistent
with 42 CFR 419.2(b). Historically, we have stated that we consider all
items related to the surgical outcome and provided during the hospital
stay in which the surgery is performed, including postsurgical pain
management drugs, to be part of the surgery for purposes of our drug
and biological surgical supply packaging policy (79 FR 66875). Please
see section III.E.2. of this final rule with comment period for
additional details on the status of HCPCS code J1096 and the CMS
rationale for why we believe this drug continues to function as a
surgical supply.
After consideration of the public comments, we believe Dextenza,
described by HCPCS code J1096 (Dexamethasone, lacrimal ophthalmic
insert, 0.1 mg), meets the criteria described at Sec. 416.174
including the technical clarifications we proposed and are finalizing
to that section. Our proposed rule evaluation continues to be accurate.
We are finalizing our proposal to pay separately 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. Please see section V.A. (OPPS
Transitional Pass-Through Payment for Additional Costs of Drugs,
Biologicals, and Radiopharmaceuticals) of this final rule with comment
period for details on the pass-through status of J1096. Also, please
see section III.E.2 of this final rule with comment period for details
on the status of HCPCS code J1096 in the HOPD, as well as CPT code
68841.
Comment Solicitation on Payment Policies for Separate Payment for
Additional Drugs and Biologicals and Other Products That Function as
Supplies in Surgical Procedures for CY 2023
We solicited 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 encouraged commenters to
include an explanation of how the drug or biological meets the
eligibility criteria in Sec. 416.174, including the technical
clarifications we proposed to that section. In this final rule with
comment period, we are including a summary of comments we received and
our analysis of whether these additional products suggested by
commenters meet the eligibility criteria in Sec. 416.174. We stated in
the proposed rule that if we find these additional drugs or biologicals
do satisfy the criteria established at Sec. 416.174, we would finalize
their separate payment status for CY 2023 in the ASC setting in this
final rule with comment period.
Comment: One commenter suggested CMS expand this policy to include,
Posimir, a new drug that the commenter believed meets the eligibility
criteria in Sec. 416.174. This commenter also provided additional
clinical information supporting the use of Posimir as an alternative to
opioids.
Response: We thank the commenter for its feedback. We agree that
Posimir, described by new HCPCS code C9144 (Injection, bupivacaine
(Posimir), 1 mg), meets the criteria described at Sec. 416.174,
including the technical clarifications we proposed and are finalizing
to that section.
Posimir was approved by FDA with a New Drug Application (NDA #
204803) under section 505(c) of the Federal Food, Drug, and Cosmetic
Act on February 1, 2021.\163\ ``Posimir contains an amide local
anesthetic and is indicated in adults for administration into the
subacromial space under direct arthroscopic visualization to produce
post-surgical analgesia for up to 72 hours following arthroscopic
subacromial decompression.'' \164\ No component of Posimir is opioid-
based. Accordingly, Posimir meets the criterion described at Sec.
416.174(a)(1). Under the methodology described at section V.B.1.a. of
this CY 2023 OPPS/ASC final rule with comment period, the per-day cost
of Posimir exceeds the finalized $135 per-day cost threshold.
Therefore, Posimir meets the criterion described at Sec.
416.174(a)(2). Additionally, as of the publication of this final rule,
Posimir 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, Posimir meets the criteria
we are adding to the regulation text at Sec. 416.174(a)(3) and (4). If
Posimir were to obtain transitional drug pass-through
[[Page 72089]]
status under Sec. 419.64 in CY 2023, then Posimir would no longer be
eligible for separate payment as a non-opioid pain management drug that
functions as a supply in a surgical procedure.
---------------------------------------------------------------------------
\163\ Posimir. FDA Approval Letter. https://www.accessdata.fda.gov/drugsatfda_docs/appletter/2021/204803Orig1s000ltr.pdf.
\164\ Posimir. FDA Package Insert. https://www.accessdata.fda.gov/drugsatfda_docs/label/2022/204803Orig1s001lbl.pdf.
---------------------------------------------------------------------------
Based on the above discussion, and after consideration of the
public comments we received, we believe that Posimir meets the criteria
described at Sec. 416.174 and we are finalizing separate payment for
Posimir 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 84 below lists the five drugs that we are finalizing as
eligible 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.
[GRAPHIC] [TIFF OMITTED] TR23NO22.120
Additionally, in the proposed rule, we solicited 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 solicited 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. Finally, we solicited
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 welcomed 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 also summarized in section II.A.3 of
this CY 2023 OPPS/ASC final rule with comment period.
We have summarized comments received in response to our broad
comment solicitation below. As discussed in the proposed rule, we
stated we would take comments into consideration for potential future
changes to this policy; therefore, we are making no policy changes for
CY 2023 as a result of this comment solicitation. However, we are
carefully considering these comments for future policy development and
encourage interested party collaboration with CMS on this policy.
Comment: A few commenters recommended that CMS create no additional
criteria and found the existing criteria to be transparent and
objective. These commenters thought additional criteria or criteria
modifications may be burdensome.
However, several commenters discussed potential criteria
modifications. Commenters recommended that CMS modify the criterion set
forth in Sec. 416.174(a)(1), which relates to FDA approval and
indications. These commenters believed a specific FDA indication of
pain management or as an analgesic was too restrictive and that CMS
should broaden this policy to include drugs and biologicals that have
pain management attributes, based on documentable clinical support or
recommendations by relevant specialty societies. Some commenters
recommended expanding the acceptable FDA indications, for example, to
include anesthesia drugs. Other commenters requested that
[[Page 72090]]
one drug, Dexycu, as well as drugs in similar positions, should be
grandfathered into this policy for a period of two to three years in
order to allow them adequate time to receive an FDA indication for pain
management or analgesia. These commenters believed that a temporary
grandfathering policy would provide manufacturers the time and
opportunity to complete new clinical trials in order to allow their
products to apply for the necessary FDA approved indications. These
commenters thought this was appropriate as they believed drugs such as
Dexycu were already being used as pain management alternatives to
opioids, despite not yet having FDA indications for pain management or
analgesia.
Additionally, several commenters recommended CMS remove the
criterion set forth in Sec. 416.174(a)(2), which requires a drug to
exceed the OPPS drug packaging threshold. Commenters stated this
criterion created a perverse incentive for drug manufacturers to list
their drugs at higher prices in order to qualify for this policy.
Commenters thought that this criterion may result in limited access for
beneficiaries to several important drugs, such as the drug Anjeso. The
commenter stated that Anjeso falls below the per day cost threshold but
the product has demonstrated meaningful and statistically significant
reductions in post-operative opioid consumption.
Finally, some commenters suggested we add additional criteria. For
example, some commenters believed CMS should require that drugs have a
demonstrated statistical significance with respect to the ability to
eliminate or significantly reduce post-operative opioid use in order to
qualify for separate payment under this policy. Commenters also stated
that statistical significance for opioid reduction should be evaluated
through clinical trials with relevant data published in a peer-reviewed
journal.
Response: We thank commenters for their comments on the criteria,
including suggestions for changes to the criteria. We will take these
comments into consideration for future rulemaking. We remind interested
parties that we are not modifying our policy at Sec. 416.174 as a
result of these comments at this time.
Comment: Many commenters suggested CMS extend the policy described
at Sec. 416.174 to the HOPD setting. Generally, commenters believed
these products serve a valuable clinical purpose and their use should
be encouraged in all settings of care. Several commenters provided data
regarding how packaging negatively impacted the utilization of their
products in the HOPD setting. Some commenters conceded that it is
reasonable to think that the average HOPD would be able to absorb the
extra costs; however, they believe that does not mean that every HOPD
would be able to do so.
Commenters also presented data showing potential access barriers
affecting underserved communities. Commenters believed that the HOPD
setting is more accessible to vulnerable and underserved populations
relative to the ASC setting. Commenters stated that extending the
policy to the HOPD setting will increase access to non-opioid pain
management drugs for Black Americans, low-income Americans, and
Americans living in rural areas, all of whom they believe use HOPDs
more frequently than ASCs. Some commenters stated that these are the
populations that are also most negatively impacted by opioids.
Response: We thank commenters for their comments urging expansion
of this policy to the HOPD setting. We will take these comments into
consideration for future rulemaking. We remind interested parties that
we are not modifying our policy at Sec. 416.174 or creating new
policies in response to these comments at this time. Any change to or
expansion of the policy described at Sec. 416.174 would be done
through notice and comment rulemaking.
Comment: We received several other suggestions for policy
modifications from commenters. Some commenters recommended that CMS
finalize a policy where the existing criteria will not change for
several years, or finalize separate payment for particular products on
a longer-term basis beyond CY 2023, or for CMS to finalize the
qualification status of products after their pass-through status
expires in the coming years. Commenters also suggested that CMS target
its policies to directly help specific patient populations by removing
all access barriers, such as packaged payment, to non-opioids for those
patients who face an increased risk of long-term opioid use after
addiction, such as those individuals recovering from substance use
disorder, those with an active opioid use disorder, and those with a
mental health condition. One commenter recommended CMS waive co-
insurance for its drug, Prialt, because, in the view of the commenter,
the drug reduces opioid use, but constitutes a significant financial
burden for beneficiaries.
Additionally, commenters recommended CMS apply this policy to non-
drug items such as devices, including devices such as the NerveCap
device and spinal stimulators, and associated procedures. Commenters
also suggested CMS consider including in this policy payment for icing
wraps, transcutaneous stimulators, continuous peripheral nerve blocks,
topic analgesics, acupuncture, chiropractic services, osteopathic
manipulation, cognitive behavioral therapy, physical therapy, ERAS
protocols, multimodal protocols, acetaminophen, IV NSAIDs, systemic
lidocaine, ketamine, long acting local anesthetics, gabapentinoids,
``On-Q'' pain relief system, polar ice devices, topical THC oil,
massage, and peri-operative pain management tools such as pain blocks,
as well as many other related items and services to reduce the use of
opioids.
A few commenters also suggested additional criteria for these
additional suggested policy extensions, including requiring devices to
have peer-reviewed, published evidence demonstrating opioid reduction
and effective pain management to be eligible for separate payment under
this policy.
Response: We thank commenters for their recommendations for policy
modifications in this space. We will take these comments into
consideration for future rulemaking. We remind interested parties that
we are not modifying our policy at Sec. 416.174 or creating new
policies as a result of these comment solicitations. With respect to
the drug Prialt, we refer readers to our discussion in the CY 2022
OPPS/ASC final rule with comment period (86 FR 63496).
F. 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: https://www.cms.gov/Medicare/Medicare-Fee-
[[Page 72091]]
for-Service-Payment/ASCPayment/NTIOLs.html.
We announce annually, in the proposed rule updating the
ASC and OPPS payment rates for the following calendar year, a list of
all requests to establish new NTIOL classes accepted for review during
the calendar year in which the proposal is published. In accordance
with section 141(b)(3) of Public Law 103-432 and our regulations at
Sec. 416.185(b), the deadline for receipt of public comments is 30
days following publication of the list of requests in the proposed
rule.
In the final rule updating the ASC and OPPS payment rates
for the following calendar year, we--
++ Provide a list of determinations made as a result of our review
of all new NTIOL class requests and public comments.
++ When a new NTIOL class is created, identify the predominant
characteristic of NTIOLs in that class that sets them apart from other
IOLs (including those previously approved as members of other expired
or active NTIOL classes) and that is associated with an improved
clinical outcome.
++ Set the date of implementation of a payment adjustment in the
case of approval of an IOL as a member of a new NTIOL class
prospectively as of 30 days after publication of the ASC payment update
final rule, consistent with the statutory requirement.
++ Announce the deadline for submitting requests for review of an
application for a new NTIOL class for the following calendar year.
2. Requests To Establish New NTIOL Classes for CY 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.
The comments and our responses to the comments are set forth below.
Comment: Some commenters requested we re-evaluate our payment
adjustment for a new NTIOL class. Commenters noted that our $50 payment
adjustment has not been adjusted since CY 1999 and that the stagnant
payment adjustment has been a barrier to intraocular lens innovation.
Commenters recommended that we set the $50 payment adjustment at
$86.49.
Response: We thank the commenters for their recommendations. We did
not propose revising the NTIOL payment adjustment amount for CY 2023.
However, we will take the commenters' recommendations into
consideration in future rulemaking.
4. Announcement of CY 2023 Deadline for Submitting Requests for CMS
Review of Applications for a New Class of NTIOLs
In accordance with 42 CFR 416.185(a) of our regulations, CMS
announces that in order to be considered for payment effective
beginning in CY 2024, requests for review of applications for a new
class of new technology IOLs must be received by 5:00 p.m. EST, on
March 1, 2023. Send requests via email to [email protected] or
by mail to ASC/NTIOL, Division of Outpatient Care, Mailstop C4-05-17,
Centers for Medicare and Medicaid Services, 7500 Security Boulevard,
Baltimore, MD 21244-1850. To be considered, requests for NTIOL reviews
must include the information requested on the CMS website at: https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ASCPayment/NTIOLs.
G. 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
[[Page 72092]]
become payable when claims data or payment information becomes
available.
2. Final ASC Payment and Comment Indicators for CY 2023
For CY 2023, we proposed new and revised Category I and III CPT
codes as well as new and revised Level II HCPCS codes. Final 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 the CY 2023 OPPS/ASC final rule
and labeled with comment indicator ``NP'' to indicate that these CPT
and Level II HCPCS codes were open for comment as part of the CY 2023
OPPS/ASC proposed rule.
We did not receive any public comments on our proposal and we are
finalizing their use as proposed without modification. We refer readers
to Addenda DD1 and DD2 of the CY 2023 OPPS/ASC proposed rule (these
addenda are available via the internet on the CMS website) for the
complete list of ASC payment and comment indicators finalized for the
CY 2023 update.
H. Calculation of the ASC Payment Rates and the ASC Conversion Factor
1. Background
In the August 2, 2007 ASC final rule (72 FR 42493), we established
our policy to base ASC relative payment weights and payment rates under
the revised ASC payment system on APC groups and the OPPS relative
payment weights. Consistent with that policy and the requirement at
section 1833(i)(2)(D)(ii) of the Act that the revised payment system be
implemented so that it would be budget neutral, the initial ASC
conversion factor (CY 2008) was calculated so that estimated total
Medicare payments under the revised ASC payment system in the first
year would be budget neutral to estimated total Medicare payments under
the prior (CY 2007) ASC payment system (the ASC conversion factor is
multiplied by the relative payment weights calculated for many ASC
services in order to establish payment rates). That is, application of
the ASC conversion factor was designed to result in aggregate Medicare
expenditures under the revised ASC payment system in CY 2008 being
equal to aggregate Medicare expenditures that would have occurred in CY
2008 in the absence of the revised system, taking into consideration
the cap on ASC payments in CY 2007, as required under section
1833(i)(2)(E) of the Act (72 FR 42522). We adopted a policy to make the
system budget neutral in subsequent calendar years (72 FR 42532 through
42533; Sec. 416.171(e)).
We note that we consider the term ``expenditures'' in the context
of the budget neutrality requirement under section 1833(i)(2)(D)(ii) of
the Act to mean expenditures from the Medicare Part B Trust Fund. We do
not consider expenditures to include beneficiary coinsurance and
copayments. This distinction was important for the CY 2008 ASC budget
neutrality model that considered payments across the OPPS, ASC, and
MPFS payment systems. However, because coinsurance is almost always 20
percent for ASC services, this interpretation of expenditures has
minimal impact for subsequent budget neutrality adjustments calculated
within the revised ASC payment system.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66857
through 66858), we set out a step-by-step illustration of the final
budget neutrality adjustment calculation based on the methodology
finalized in the August 2, 2007 ASC final rule (72 FR 42521 through
42531) and as applied to updated data available for the CY 2008 OPPS/
ASC final rule with comment 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 the CY 2023 OPPS/ASC proposed rule (87 FR 44715
through 44716)), 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
[[Page 72093]]
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 did not receive any
public comments on our proposed CY 2023 ASC wage indexes. For this CY
2023 OPPS/ASC final rule with comment period, the CY 2023 ASC wage
indexes fully reflect 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 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 the CY 2023 OPPS/ASC proposed
rule (87 FR 44510), we are using the CY 2021 claims data to be
consistent with the OPPS claims data for the CY 2023 OPPS/ASC proposed
rule (87 FR 44510). Consistent with our established policy, we proposed
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 proposed 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
primary procedures when performed with add-on packaged services, CY
2023 total payments will include spending and utilization related to
these new C codes. In the CY 2023 OPPS/ASC proposed rule (87 FR 44724),
we estimate the additional CY 2023 spending to be $5 million.
We proposed 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 was 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
[[Page 72094]]
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 proposed to use the CY 2021 claims data to model our
budget neutrality adjustment.
Comment: Many commenters reiterated their past recommendation that
we discontinue applying the ASC weight scalar to achieve budget
neutrality. Commenters were concerned that the ASC weight scalar has
decreased overall since the implementation of the revised ASC payment
system for CY 2008 and state that relative weights have already been
scaled for budget neutrality and do not require ``rescaling'' to
achieve budget neutrality under the ASC payment system. Further,
commenters requested an analysis to determine the long-term decrease in
the ASC weight scalar as they contend the decrease in the ASC weight
scalar has decreased ASC payment rates and driven procedures to be
performed more often in the more expensive hospital outpatient setting.
Response: We disagree with commenters' assessment and are not
accepting the recommendation to discontinue applying the ASC weight
scalar. As we have stated in past rulemaking (82 FR 59421), applying
the ASC weight scalar, which is 0.8594 for this final rule with comment
period and an increase from the CY 2022 ASC weight scalar of 0.8544,
ensures that the ASC payment system remains budget neutral. This annual
budget neutrality adjustment is performed similarly to updates for the
IPPS, OPPS, PFS, and other Medicare payment systems. We apply the ASC
weight scalar to scaled OPPS relative weights to ensure that current
Medicare payments under the ASC payment system do not increase as a
result of newer data to determine the cost relativity between surgical
procedures. The scaled prospective OPPS relative weights that are used
to determine scaled prospective ASC relative weights have not, as
commenters suggest, been adjusted to achieve budget neutrality within
the ASC payment system prior to the application of the ASC weight
scalar. We also note that no stakeholder presented empirical evidence
that the budget neutrality adjustment under the ASC payment system has
impacted beneficiary access to surgical procedures in the ASC setting.
After consideration of the public comments we received, we are
finalizing our proposal 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 final CY 2023 ASC weight scalar is 0.8594. Consistent
with historical practice, we are finalizing our proposal to 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.
Additionally, in light of the fact that we are finalizing our proposal
to provide a higher ASC payment rate through the use of new C codes for
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 final rule with comment period, we estimate
the additional CY 2023 spending to be $5 million.
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 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
[[Page 72095]]
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 was
projected to be 3.1 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 proposed 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 proposed 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 the CY
2023 OPPS/ASC proposed rule (87 FR 44754 through 44755) for a detailed
discussion of our policies regarding payment reduction for ASCs that
fail to meet ASCQR Program requirements. We proposed to utilize the
hospital market basket update of 3.1 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
proposed that if more recent data are subsequently available (for
example, a more recent estimate of the hospital market basket update or
productivity adjustment), we would use such data, if appropriate, to
determine the CY 2023 ASC update for the final rule.
For CY 2023, we proposed 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 proposed 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 requested comments on our proposals for updating the CY 2023 ASC
conversion factor.
Comment: Some commenters requested that any change as a result of
the Supreme Court ruling in American Hospital Association v. Becerra
not adversely affect ASC payment rates or the ASC conversion factor.
Response: As discussed in further detail in Section V.B.6. of this
final rule with comment period, the Supreme Court's decision in
American Hospital Association v. Becerra, No. 20-1114, 2022 WL 2135490
(June 15, 2022), concluded 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).
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. In light of the Supreme Court's decision, for CY 2023 we are
adopting a payment rate of ASP+6 percent for drugs and biologicals
acquired through the 340B Program. To ensure budget neutrality under
the OPPS, we are applying an adjustment to the OPPS conversion factor
to offset the increase in the conversion factor that resulted from the
budget neutral implementation of the payment policy for 340B drugs and
biologicals in CY 2018. The budget neutrality adjustment of 0.9691 is
applied to the OPPS conversion factor, for a revised OPPS conversion
factor of $85.585 for CY 2023.
The Supreme Court's decision does not impact the ASC conversion
factor; however, because the ASC standard ratesetting methodology
utilizes OPPS payment rates and the device portion (or device offset
amount), the revised OPPS conversion factor will have an impact on the
ASC payment system. Specifically, because the device portion for
device-intensive procedures is held constant with the OPPS and is not
calculated with the ASC conversion factor, the revised OPPS conversion
factor will lower the device portions and, thus, the payment rates for
device-intensive procedures under the ASC payment system. However, the
decline in expenditures for device portions of device-intensive
procedures under the ASC payment system is offset through an increase
in the ASC weight scalar, which increases non-device portions for all
covered surgical procedures and certain covered ancillary services.
Comment: Many commenters supported our proposed increase to the CY
2023 ASC payment rates and several commenters requested that we amend
our regulations to permanently increase ASC payment rates by the
hospital market basket update. Comments from hospital associations
recommended that we end our policy of providing the hospital market
basket update after CY 2023 and that CMS should work to collect ASC
cost data to determine a more appropriate update factor for ASC payment
rates.
Response: We appreciate the commenters support of our proposal. As
we stated in the CY 2019 OPPS/ASC final rule with comment period (83 FR
59075 through 59080), we finalized a proposal to apply the hospital
market basket update to ASC payment system rates for an interim period
of 5 years (CY 2019 through CY 2023), during which we will assess
whether there is a migration of the performance of procedures from the
hospital setting to the ASC setting as a result of the use of a
hospital market basket update, as well as whether there are any
unintended consequences, such as less than expected migration of the
performance of procedures from the hospital setting to the ASC setting.
We intend to update the public on our assessment of service
[[Page 72096]]
migration and other factors in the CY 2024 OPPS/ASC proposed rule.
After consideration of the public comments we received, consistent
with our proposal that if more recent data are subsequently available
(for example, a more recent estimate of the hospital market basket
update and productivity adjustment), we would use such data, if
appropriate, to determine the CY 2023 ASC update for the CY 2023 OPPS/
ASC final rule with comment period, we are incorporating more recent
data to determine the final CY 2023 ASC update. Therefore, for this
final rule with comment period, the hospital market basket update for
CY 2023 is 4.1 percent, as published in the FY 2023 IPPS/LTCH PPS final
rule (87 FR 49056), based on IGI's 2022 second quarter forecast with
historical data through the first quarter of 2022. The productivity
adjustment for this final rule with comment period is 0.3 percentage
point, as published in the FY 2023 IPPS/LTCH PPS final rule (87 FR
49056) based on IGI's 2022 second quarter forecast.
For CY 2023, we are finalizing the hospital market basket update of
4.1 percent minus the productivity adjustment of 0.3 percentage point,
resulting in a productivity-adjusted hospital market basket update
factor of 3.8 percent for ASCs meeting the quality reporting
requirements. Therefore, we apply a 3.8 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 payments. We are finalizing the hospital market basket
update of 4.1 percent reduced by 2.0 percentage points for ASCs that do
not meet the quality reporting requirements and then subtract the 0.3
percentage point productivity adjustment. Therefore, we apply a 1.8
percent productivity-adjusted hospital market basket update factor to
the CY 2022 ASC conversion factor for ASCs not meeting the quality
reporting requirements.
For CY 2023, we are adjusting the CY 2022 ASC conversion factor
($49.916) by a wage index budget neutrality factor of 1.0008 in
addition to the productivity-adjusted hospital market basket update of
3.8 percent, discussed above, which results in a final CY 2023 ASC
conversion factor of $51.854 for ASCs meeting the quality reporting
requirements. For ASCs not meeting the quality reporting requirements,
we are adjusting the CY 2022 ASC conversion factor ($49.916) by the
wage index budget neutrality factor of 1.0008 in addition to the
quality reporting productivity-adjusted hospital market 1.8 percent,
discussed above, which results in a final CY 2023 ASC conversion factor
of $50.855.
3. Display of the CY 2023 ASC Payment Rates
Addenda AA and BB to the CY 2023 OPPS/ASC final rule (which are
available on the CMS website) display the final ASC payment rates for
CY 2023 for covered surgical procedures and covered ancillary services,
respectively. The final payment rates included in Addenda AA and BB to
this CY 2023 OPPS/ASC final rule reflect the full ASC final payment
update and not the reduced payment update used to calculate payment
rates for ASCs not meeting the quality reporting requirements under the
ASCQR Program.
These Addenda contain several types of information related to the
final CY 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 ``Final CY 2023 Payment
Weight'' are the final relative payment weights for each of the listed
services for CY 2023. The final relative payment weights for all
covered surgical procedures and covered ancillary services where the
ASC payment rates are based on OPPS relative payment weights were
scaled for budget neutrality. Therefore, scaling was not applied to the
device portion of the device-intensive procedures; services that are
paid at the MPFS nonfacility PE RVU-based amount; separately payable
covered ancillary services that have a predetermined national payment
amount, such as drugs and biologicals and brachytherapy sources that
are separately paid under the OPPS; or services that are contractor-
priced or paid at reasonable cost in ASCs. This includes separate
payment for non-opioid pain management drugs.
To derive the final CY 2023 payment rate displayed in the ``Final
CY 2023 Payment Rate'' column, each ASC payment weight in the ``Final
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 final CY 2023 ASC
conversion factor uses the CY 2023 productivity-adjusted hospital
market basket update factor of 3.8 percent (which is equal to the
projected hospital market basket update of 4.1 percent reduced by a
projected productivity adjustment of 0.3 percentage point).
In Addendum BB, there are no relative payment weights displayed in
the ``Final CY 2023 Payment Weight'' column for items and services with
predetermined national payment amounts, such as separately payable
drugs and biologicals. The ``Final CY 2023 Payment'' column displays
the proposed CY 2023 national unadjusted ASC payment rates for all
items and services. The final 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 to this CY 2023 OPPS/ASC final rule provides the HCPCS
codes and short descriptors for surgical procedures that are finalized
to be excluded from payment in ASCs for CY 2023.
Addendum FF to this CY 2023 OPPS/ASC final rule displays the OPPS
payment rate (based on the standard ratesetting methodology), the
device offset percentage for determining device-intensive status (based
on the standard ratesetting methodology), 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
[[Page 72097]]
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 with
comment period (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 XIV.E of
the CY 2023 OPPS/ASC final rule with comment period (87 FR 44739) 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 did not
propose any changes to these policies in the CY 2023 OPPS/ASC 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 did
not propose any changes to these policies in the CY 2023 OPPS/ASC
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).\165\ We did not propose any changes to these policies
in the CY 2023 OPPS/ASC proposed rule.
---------------------------------------------------------------------------
\165\ 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).\166\ We did not propose any changes to these policies in the CY
2023 OPPS/ASC proposed rule.
---------------------------------------------------------------------------
\166\ 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.
---------------------------------------------------------------------------
4. Modifications to Previously Adopted Measures
a. 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
with comment period (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 \167\ stating that we would delay
the implementation of OP-31, and we subsequently finalized in the CY
2015 OPPS/ASC final rule with comment period (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.
---------------------------------------------------------------------------
\167\ 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
[[Page 72098]]
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 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).
As discussed in the CY 2023 OPPS/ASC proposed rule (87 FR 44727),
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, in the CY
2023 OPPS/ASC proposed rule, we proposed to change OP-31 from mandatory
to voluntary beginning with the CY 2025 reporting period/CY 2027
payment determination. Under the proposal, 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 stated in the
proposed rule our plan to continue to evaluate this policy moving
forward. To be clear, there are no changes to reporting for CY 2023 and
CY 2024, during which the measure remains voluntary.
As the OP-31 measure requires cross-setting coordination among
clinicians of different specialties (that is, surgeons and
ophthalmologists), we stated in the proposed rule that we believe it is
appropriate to defer mandatory reporting at this time. We also stated
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 invited public comment on our proposal.
Comment: Many commenters expressed support for our proposal to
change OP-31 from mandatory reporting to voluntary reporting beginning
with the CY 2025 reporting period/CY 2027 payment determination.
Response: We thank commenters for their support.
Comment: A few commenters expressed their belief that OP-31 should
be required for mandatory reporting. One commenter emphasized the need
for public reporting of patient reported outcome measures to provide
the public with ample quality and safety data related to outpatient
procedures. Another commenter expressed that mandatory reporting for
OP-31 should not be delayed further, as it has already been delayed in
prior rulemaking.
Response: We thank commenters for their input and agree on the
importance of including a cataract surgery patient reported outcome
measure in the Hospital OQR Program. We recognize the commenters'
concerns in delaying mandatory reporting of OP-31; however, due to
continued impact of the COVID-19 PHE, we believe it is appropriate to
delay mandatory reporting of this measure at this time. As we noted
previously and in the proposed rule (87 FR 44727), we intend to monitor
national staffing and supply shortages resulting from the COVID-19 PHE
for improvement, and we will consider mandatory reporting of OP-31 in
light of such improvements.
Comment: One commenter expressed that OP-31 should be maintained as
voluntary until a digital version of the measure can be developed. The
commenter explains that this strategy would support our vision to
transition away from chart-abstracted measures and move toward digital
measures by CY 2025.
Response: We thank the commenter for its recommendation and will
take it into consideration for future rulemaking. We agree that moving
from chart-abstracted measures to digital measures is an important step
in working toward interoperability, a goal which we outlined in the FY
2022 IPPS/LTCH PPS final rule (86 FR 45342) and the FY 2023 IPPS/LTCH
PPS final rule (87 FR 49181).
Comment: Many commenters expressed their belief that OP-31 should
never be made mandatory due to the high administrative burden of
reporting this measure. A few commenters suggested we remove the
measure entirely from the measure set for this reason.
Response: We thank the commenters for their feedback. However, we
support the inclusion of OP-31 in the Hospital OQR Program and
reiterate that the measure addresses a high impact condition not
otherwise adequately assessed by the program measure set. We believe
the importance of this measure as a patient reported outcome measure
justifies the administrative burden of reporting the measure. The CMS
National Quality Strategy includes a goal to Foster Engagement to
increase engagement between individuals and their care teams to improve
quality, establish trusting relationships, and bring the voices of
people and caregivers to the forefront. The Meaningful Measures 2.0
goals also prioritize patient-reported measures and promoting better
collection and integration of patient voices across CMS' quality
programs.\168 169\ Some facilities have been voluntarily reporting this
measure successfully while it has not been required, thus, we believe
that this indicates that the measure is not overly burdensome and that
the value of the measure in regard to information it provides to
consumers about quality of care justifies any potential administrative
burden that would prevent facilities from reporting it. We note that
while it is recommended that the facility obtain the survey results
from the appropriate physician or optometrist, the surveys can be
administered by the facility via phone, mail, email, or during
clinician
[[Page 72099]]
follow-up. We appreciate commenters' concerns and plan to retain this
measure as voluntary instead of mandatory, while continuing to evaluate
this policy moving forward, as we are committed to having a cataract
surgery, patient-reported measure for the Hospital OQR Program.
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\168\ https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Value-Based-Programs/CMS-Quality-Strategy.
\169\ https://www.cms.gov/medicare/meaningful-measures-framework/meaningful-measures-20-moving-measure-reduction-modernization.
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Comment: One commenter recommended that we provide education and
outreach on the survey instruments available for use with OP-31 and
best practices based on the experiences of the facilities that have
consistently reported the measure while it has been voluntary.
Response: We thank the commenter for these recommendations; we
agree that such information would be useful. We plan on adding resource
information to the Hospital OQR Program Specifications Manual and have
been in contact with facilities that have consistently reported data
for this measure to glean how the measure has been implemented and best
practices.
Comment: One commenter expressed that instead of continuing to
report OP-31, we should pursue adopting a measure related to post-
operation visual function within the CMS Merit-based Incentive Payment
System (MIPS) or an equivalent program that can be reported through the
standard CMS platform for physician quality measures.
Response: We thank the commenters for their recommendations and
will take them into consideration for future rulemaking. We note that
the MIPS measures clinician-level quality reporting. We believe that
assessing care through the Hospital OQR Program is essential to assess
the quality of care provided at the facility level, in the outpatient
setting. Quality-level reporting through the MIPS is complimentary to
facility measurement within the Hospital OQR Program, not duplicative
of it. Additionally, we believe that facilities are equally responsible
for the quality of care provided in the outpatient departments as
clinicians. Facilities have an obligation to ensure the best quality of
care is provided by the clinicians operating in their outpatient
departments.
We refer readers to section 1833(t)(17) of the Act which outlines
the statutory authority of the program to develop measures for care
rendered in the outpatient setting.
Comment: One commenter inquired about the measure specifications
for OP-31.
Response: We refer the commenter to the OP-31 measure
specifications manual, which is available at: https://qualitynet.cms.gov/outpatient/specifications-manuals. After
consideration of the public comments we received, we are finalizing our
proposal to change OP-31 from mandatory to voluntary beginning with the
CY 2025 reporting period/CY 2027 payment determination.
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 with comment
period (85 FR 63846 through 63850) for a summary of the previously
adopted Hospital OQR Program measure set for the CY 2024 payment
determination. Table 85 summarizes the previously finalized Hospital
OQR Program measure set for the CY 2024 payment determination:
BILLING CODE 4120-01-P
[[Page 72100]]
[GRAPHIC] [TIFF OMITTED] TR23NO22.121
[[Page 72101]]
b. Summary of Hospital OQR Program Measure Set for the CY 2025 Payment
Determination
Table 86 summarizes the Hospital OQR Program measure set including
our finalized proposal in this CY 2023 OPPS/ASC final rule for the CY
2025 payment determination:
[GRAPHIC] [TIFF OMITTED] TR23NO22.122
[[Page 72102]]
c. Summary of Hospital OQR Program Measure Set for the CY 2026 Payment
Determination and Subsequent Years
Table 87 summarizes the Hospital OQR Program measure set for the CY
2026 payment determination and subsequent years:
[GRAPHIC] [TIFF OMITTED] TR23NO22.123
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.\170\ In line with this trend, outpatient services
increased by 0.7 percent in 2019 while inpatient services decreased by
0.9 percent.\171\ 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.\172\
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\170\ 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.
\171\ 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/.
\172\ 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/.
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Volume has a long history as a quality metric, however, quality
measurement efforts moved away from procedure volume as it was
considered simply a
[[Page 72103]]
proxy for quality rather than directly measuring outcomes.\173\ 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.\174\ The 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 nine \175\ categories of procedures frequently performed in the
hospital outpatient setting: Cardiovascular, Eye, Gastrointestinal,
Genitourinary, Musculoskeletal, Nervous System, Respiratory, Skin, and
Other.\176\ We adopted OP-26 based on evidence that the volume of
surgical procedures, particularly of high-risk surgical procedures, is
related to better patient outcomes, including decreased medical errors
and mortality (76 FR 74466).177 178 179 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).
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\173\ Jha AK. Back to the Future: Volume as a Quality Metric.
JAMA Forum Archive. Published online June 10, 2015.
\174\ Ibid.
\175\ This number has been updated from eight categories in the
proposed rule to nine categorizes, as it was erroneously stated in
the proposed rule (87 FR 44731).
\176\ Hospital Outpatient Specifications Manuals version 9.1.
Available at: https://qualitynet.cms.gov/outpatient/specifications-manuals#tab7.
\177\ Livingston, E.H.; Cao, J ``Procedure Volume as a Predictor
of Surgical Outcomes''. Edward H. Livingston, Jing Cao JAMA.
2010;304(1):95-97.
\178\ 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.
\179\ 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.
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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. Thus, 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 stated in the CY 2023 OPPS/ASC proposed rule that 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 (87
FR 44730 through 44732).
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 their
operation due to the use of innovative techniques and technologies
available in the outpatient setting. \180\ \181\
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\180\ 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.
\181\ Chang AC, Yee J, Orringer MB, Iannettoni MD. Diagnostic
thoracoscopic lung biopsy: an outpatient experience. The Annals of
Thoracic Surgery. 2002;74:1942-7.
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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, and volume can
serve as an indicator for patients of which facilities are experienced
with certain outpatient procedures.
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 stated in the CY 2023 OPPS/ASC proposed rule (87 FR
44731) that 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 noted in the CY 2023 OPPS/ASC proposed rule (87 FR 44731) that
the OP-26 measure was adopted in the CY 2012 OPPS/ASC final rule with
comment period (76 FR 74466 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.\182\ Therefore,
for OP-26 to be adopted in the Hospital OQR Program measure set, the
measure would need to first undergo
[[Page 72104]]
the pre-rulemaking process specified in section 1890A(a) of the Act.
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\182\ 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.
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(2) 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 solicited 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 solicited comment
on what volume data hospitals currently collect and if it is feasible
to submit these data to the Hospital OQR Program, to minimize the
collection and reporting burden of an alternative, new volume measure.
Additionally, we solicited comment on an appropriate timeline for
implementing and publicly reporting the measure data.
Specifically, we invited public comment on the following:
The usefulness of including a volume indicator in the Hospital OQR
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 categories, and which
procedures would benefit from volume reporting.
The usefulness of Medicare versus non-Medicare reporting versus
other or additional categories for reporting.
We received public comments on this topic.
Comment: A few commenters supported the reimplementation of OP-26
or another volume measure. These commenters expressed that a volume
measure would provide valuable data to evaluate patient outcomes and
quality of care. One commenter stated that many studies have
demonstrated a relationship between superior patient outcomes and
routine procedures. One commenter expressed that a volume measure would
not impose a significant data collection burden for most hospitals.
Another commenter specifically supported future adoption of a claims-
based volume measure.
Response: We thank the commenters for supporting the
reimplementation of a procedure volume measure in the Hospital OQR
Program. We will take these comments into consideration as part of
future notice-and-comment rulemaking.
Comment: Some commenters did not support the potential future
reimplementation of OP-26 or adoption of another volume measure,
expressing their belief that volume is not a clear indicator, or never
is an indicator, of care quality and therefore procedure volume data
would not be useful to consumers. A few commenters further stated that
they believe there is a lack of evidence linking volume to quality of
care and that this would make adoption of a volume measure inconsistent
with the Meaningful Measures 2.0 Framework goal to ``promote innovation
and modernization of all aspects of quality.'' Several commenters
expressed concern that the burden of collecting and reporting data for
OP-26 outweighs its value. One commenter also opposed reimplementation
of OP-26 because the measure has not been endorsed by the NQF.
Response: We thank the commenters for their feedback and
acknowledge their concerns. We agree that we can determine facility
volumes for procedures performed using Medicare FFS claims. However,
the specifications for the OP-26 measure include reporting data for
non-Medicare patients. The specifications for OP-26 are available in
the Hospital Outpatient Specifications Manuals version 9.1 available at
https://qualitynet.cms.gov/outpatient/specifications-manuals#tab7. As
stated in the Specifications Manual, OP-26 measures the aggregate count
of selected outpatient procedures in the following nine categories:
Cardiovascular, Eye, Gastrointestinal, Genitourinary, Musculoskeletal,
Nervous System, Skin, Respiratory, and Other. OP-26 excludes procedures
performed within the emergency department (ED).
We reiterate our belief grounded in the published scientific
literature that volume metrics serve as an indicator of which
facilities have experience with certain outpatient procedures and
assist consumers in making informed decisions about where they receive
care, acknowledging that many studies have shown that volume does serve
as an indicator of quality of care.\183\ \184\ One study found that
patients who had total hip arthroplasties performed at high-volume
hospitals had lower rates of surgical site infections, complications,
and mortality compared to patients at low-volume hospitals.\185\
Another study found that congestive heart failure (CHF) patients who
stayed in hospitals with more experience in managing CHF received
higher quality care and experienced better outcomes.\186\
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\183\ Ogola, Gerald O. Ph.D., MPH; Crandall, Marie L. MD, MPH;
Richter, Kathleen M. MS, MBA, MFA; Shafi, Shahid MD, MPH. High-
volume hospitals are associated with lower mortality among high-risk
emergency general surgery patients. Journal of Trauma and Acute Care
Surgery: September 2018--Volume 85--Issue 3--p 560-565 doi: 10.1097/
TA.0000000000001985.
\184\ Xu, B., Redfors, B., Yang, Y., Qiao, S., Wu, Y., Chen, J.,
Liu, H., Chen, J., Xu, L., Zhao, Y., Guan, C., Gao, R., &
G[eacute]n[eacute]reux, P. (2016). Impact of Operator Experience and
Volume on Outcomes After Left Main Coronary Artery Percutaneous
Coronary Intervention. JACC. Cardiovascular interventions, 9(20),
2086-2093. https://doi.org/10.1016/j.jcin.2016.08.011.
\185\ Mufarrih, S.H., Ghani, M.O.A., Martins, R.S. et al. Effect
of hospital volume on outcomes of total hip arthroplasty: a
systematic review and meta-analysis. J Orthop Surg Res 14, 468
(2019). https://doi.org/10.1186/s13018-019-1531-0.
\186\ Joynt, K.E., Orav, E.J., & Jha, A.K. (2011). The
association between hospital volume and processes, outcomes, and
costs of care for congestive heart failure. Annals of internal
medicine, 154(2), 94-102. https://doi.org/10.7326/0003-4819-154-2-201101180-00008.
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The adoption of such a measure would follow our standard measure
adoption process, including our consideration of relevant measures
endorsed by a consensus building entity. A volume measure would not be
presented to consumers alone, but would be displayed complementary with
other program quality measures that are focused on clinical processes
and outcomes. We will take the commenters' feedback into consideration
as we consider the potential future adoption of a volume measure that
is useful to consumers and appropriately assesses the quality of care
provided in the outpatient setting.
Comment: Several commenters suggested that CMS choose measures that
would be more meaningful to patients, especially outcome-based measures
of quality and safety. A few commenters recommended that CMS work with
interested parties to identify measures that would better evaluate the
shift in procedures to the outpatient setting and the quality of care
provided. A few commenters also recommended adopting a volume measure
that is limited to a specific set of procedures.
Response: We thank the commenters for their recommendations and
will take them into consideration for future rulemaking.
Comment: Many commenters provided recommendations to improve volume
measure reporting. Several commenters recommended that a potential
volume measure should receive NQF endorsement before it is proposed for
adoption. One commenter recommended that CMS track volume via claims-
based data instead of
[[Page 72105]]
requiring submission of data via a web-based tool. Another commenter
recommended the adoption of an all-payer volume indicator to provide
useful data about facilities that also serve non-Medicare fee-for-
service (FFS) patients. One commenter stated that if a volume measure
is adopted, it should be used only for confidential facility-level
feedback.
A commenter recommended expanding the reporting of clinical areas
beyond the existing procedure categories, while another commenter
suggested that CMS consider adopting a volume indicator measure that
uses procedure codes to reduce data collection and reporting burden for
hospitals. One commenter suggested that a pain management measure
should not be developed based on a volume measure because the
healthcare system is already overburdened by the ongoing opioid
epidemic and the COVID-19 PHE. One commenter encouraged CMS to develop
a volume electronic clinical quality measure (eCQM) instead of a
measure that requires web-based submission through the Hospital Quality
Reporting (HQR) portal.
Response: We thank the commenters for their recommendations to
provide meaningful information to consumers and improve the quality of
outpatient care and will take them into consideration for future
rulemaking. We note that the OP-26 measure, when required for the
Hospital OQR Program, included the submission of Medicare and non-
Medicare volume data; conversely, relying solely on the use of Medicare
FFS claims data to simplify reporting would limit a future volume
measure to only this payer.
Comment: A commenter noted that the CY 2023 OPPS/ASC proposed rule
states, ``. . . 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,'' while the referenced study only
reviewed patients who underwent diagnostic thoracoscopic lung biopsy.
Response: We thank the commenter for this feedback. We believe that
this statement still supports our point that procedures are moving from
the inpatient to the outpatient setting, which has placed greater
importance on tracking the volume of outpatient procedures. However, to
better reflect the cited study, we acknowledge that its findings were
limited to patients who undergo diagnostic thoracoscopic lung biopsy,
of whom more than 70 percent of can be discharged on the day of the
surgery itself due to the use of innovative techniques and technologies
available in the outpatient setting.
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.\187\ \188\ \189\ \190\ \191\ \192\ \193\ \194\ \195\
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\187\ 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.
\188\ 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.
\189\ 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.
\190\ 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.
\191\ 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.
\192\ 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.
\193\ https://www.minorityhealth.hhs.gov/assets/PDF/Update_HHS_Disparities_Dept-FY2020.pdf.
\194\ www.cdc.gov/mmwr/volumes/70/wr/mm7005a1.htm.
\195\ 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.
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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 referred readers to the full RFI in the FY 2023 IPPS/LTCH PPS
proposed rule for full details on these considerations as well as the
FY 2023 IPPS/LTCH PPS final rule for a summary of previous comments
received in response to the RFI. For comments and feedback on the
application of these principles to the Hospital OQR Program, we asked
commenters to respond to the CY 2023 OPPS/ASC proposed rule (87 FR
44732).
Comment: Several commenters supported CMS's overall goal of
addressing health equity through quality measurement and stratification
and acknowledged the importance of this work. One commenter emphasized
the importance of differentiating the role of health equity in the
acute care versus community settings. A commenter noted that these
overarching principles presented in the RFI could also help inform
future equity frameworks across CMS programs. Several commenters also
highlighted their general support for the conceptual approaches, the
Within-Facility Disparity Method and the Across-Facility Disparity
Method for measuring disparity, known as The CMS Disparity Methods.
However, one commenter noted that if CMS chooses to stratify patient
experiences measures in the future, they would discourage CMS from
using the Across-Facility Disparity Method for these particular
measures. Similarly, several commenters recommended prioritizing the
Within-Facility Disparity Method over the Across-Facility Disparity
Method. A commenter suggested that when utilizing the Across-Facility
Disparity Method, that essential hospitals be identified as a distinct
group. One commenter noted that in addition to evaluating disparities
through the Within-Facility Disparity Method and Across-Facility
Disparity Method, CMS should consider absolute performance as well. A
commenter provided support to expand disparities reporting to all
settings.
Another commenter noted that it is important for workforce training
and leadership development to be considered in efforts to improve
health outcomes.
A commenter stated that building off existing programs, such as the
Medicare Shared Savings Program and the Medicare Promoting
Interoperability Program, could be useful in determining a health
equity infrastructure, particularly in the context of involving
community stakeholders as in the Accountable Health Communities Model.
Additionally, when considering potential approaches to quality
[[Page 72106]]
measurement and stratification, a commenter expressed the importance of
considering which factors are controllable by the provider in order to
be as specific and targeted in measurement efforts. Similarly, another
commenter emphasized that social factors outside of the providers'
control should not be measured through quality measurement efforts. A
few commenters stated that CMS should take a phased approach for
setting goals and expectations focused on reducing healthcare
disparities, particularly to accommodate how different facilities are
at different stages of building and implementing a health equity
framework. Another commenter expressed that collaboration among
healthcare providers to address inequity can reduce provider burden as
well. A few commenters noted that a holistic approach that shifts the
focus on the sickness of patients to the wellness of patients is needed
to effectively address healthcare disparities.
A commenter noted that they do not recommend comparing inequities
across hospitals due to differing social contexts across hospitals and
that this comparison can lead to incorrect conclusions in addition to
not providing a facility with valuable information or incentives for
improving its own performance in the health equity space.
A few commenters flagged the potential impact of measurement bias
and the unintended consequences when considering approaches to health
equity measurement and stratification. One commenter noted that ``the
implementation of a well-intentioned model'' can be biased and
negatively affect historically marginalized groups. Another commenter
suggested that an effort to mitigate potential unintended consequences
could be to create public forums where historically marginalized groups
can provide suggestions through more direct communication. This
commenter emphasized the importance of stakeholder engagement and
warned that not engaging stakeholders could threaten the validity of
the disparity method used. A commenter also expressed that health
equity frameworks should be evidence-based and ultimately focused on
provider accountability.
Several comments agreed with CMS that quality measures can help
inform performance across many patient populations. A commenter stated
that early in the process, it is important to clearly outline the role
of healthcare quality measurement as aiming to improve health care
itself in addition to wider community needs. A few commenters stated
that stratification contributes to the identification of disparity, but
does not inherently provide resources; therefore, stratification is
only one component of advancing health equity.
Response: We appreciate the feedback and suggestions provided by
the commenters regarding overarching goals for measuring disparity
across CMS quality programs, specifically in regard to conceptual
approaches, stratification and the consideration of measurement bias.
We will take commenters' feedback into consideration.
Comment: Many commenters urged CMS to prioritize use of existing
measures to capitalize on existing data collection efforts and tools,
large datasets, and alignment across multiple programs. Several
commenters suggested that this prioritization would help mitigate some
of the administrative burden of data collection on providers and
suggested that the measures could be modified based on setting as
appropriate. Several commenters stressed the importance of data and
measure transparency to ensure both providers and patients have
adequate knowledge of disparities and efforts to address disparities.
Several commenters additionally noted the potential financial burden on
providers associated with data collection.
Several commenters expressed concerns about low sample sizes that
could affect data collection, data completeness, and interpretability
of disparity method results. One commenter suggested pooling data
across multiple years to increase sample size, giving higher
statistical weights to more recent data. A few other commenters
similarly echoed the importance of using recent data in evaluating
disparities and indicated the transient nature of some social risk
factors, such as homelessness.
Several commenters offered additional suggestions about appropriate
measure types to prioritize. A commenter noted the importance of
considering how different measure types may be suited for different
approaches to stratification. Similarly, a few commenters noted that
stratification may not be suitable for all types of measures, and the
measure types for which it is the most appropriate can be clarified
through stakeholder input. Several commenters suggested prioritizing
disparity measurement in process and access measures, and one commenter
expressed that improving patient access to care is an essential goal
driving health equity efforts. One commenter suggested prioritizing
disparity measurement in condition-specific or in procedure-specific
measures, and another commenter suggested expanding CMS's current
condition- and procedure-specific measures to include evaluation of
disparities for other conditions and procedures. One commenter
suggested prioritizing measures of health system overuse and
appropriateness of care.
Response: We appreciate the commenters' concerns about small sample
sizes. We thank the commenters for their recommendations regarding
prioritization of existing measures, data collection efforts, and tools
and will take this feedback into consideration.
Comment: Many commenters supported using area-based indicators to
stratify quality measures. Several commenters supported the use of
imputed race and ethnicity data, while several other commenters
conversely did not support imputed race and ethnicity data. One
commenter suggested validating imputed race and ethnicity data by
comparing the CMS Disparity Method results calculated using imputed
data to those calculated using self-reported race and ethnicity data.
Indeed, many commenters emphasized the role of self-reported patient
data as the gold standard, and one commenter further noted that CMS's
resources should be dedicated to collecting self-reported data rather
than to data imputation.
Many commenters suggested that CMS move to standardize data
definitions and data collection processes across providers, programs,
and existing tools to enhance interoperability and across-hospital data
consistency. Several commenters agreed that social and demographic data
are not currently captured in an accessible way, and consistent,
standardized data collection of social needs data is ideal. Several
commenters considered data standardization to be vital to ensuring data
and measure validity and reliability. One commenter expressed a concern
that comprehensive screening tools may unnecessarily burden providers,
but nevertheless felt that standardization across hospitals and systems
would ultimately be beneficial to all providers. A few commenters
expressed support for provider screening of health-related social needs
as this effort contributes to the larger framework of improving health
equity.
Several commenters noted that CMS should establish a timeline with
data standardization and collection goals and milestones, as well as
measure development and implementation. Optimizing data quality will
necessitate time and new resources, such as building electronic health
record (EHR) environments to support data collection.
[[Page 72107]]
Another commenter highlighted that data without context can contradict
efforts to advance health equity through quality measurement. A
commenter stated that comprehensive and actionable data are important
for driving improvement. A few commenters noted that data
harmonization, aggregation and alignment are key to consider in the
context of health equity measures and suggested that Electronic Health
Information Exchanges (HIEs) and Regional Health Improvement
Collaboratives (RHICs) can serve as useful resources.
In addition to data standardization and data harmonization, several
commenters suggested that CMS incentivize use of Z-codes to capture
social and demographic factors, and one commenter suggested that CMS
reimburse providers for appropriately documenting Z-codes. Another
commenter emphasized the importance of educating providers about the
importance of collecting information regarding social drivers of
health. Several commenters further suggested that CMS incentivize
hospitals to collect self-reported social and demographic data from
patients, and one commenter additionally suggested that payers collect
these data themselves since patients may not be willing to provide
social and demographic data to providers. One commenter noted that
hospitals currently may collect social and demographic data to connect
patients to available community resources and implementing measures may
perversely incentivize providers to only perform social needs screening
to collect data and not adequately follow up with patients to provide
them with needed resources. Several commenters noted that data
collection and disparity measurement efforts should include protections
for patients. One commenter noted that CMS must ensure that patients do
not face discrimination, and another commenter noted that patients'
privacy must be protected.
Several commenters expressed that the current measures of social
and demographic risk--dual eligibility and race and ethnicity--are
imperfect measures of inequity. One commenter emphasized that because
race and ethnicity are proxies of social risk on which providers are
unable to intervene, alternative direct measures of social risk should
be used in measurement programs. One commenter suggested that CMS
implement a standard process for validating data elements for use in
future stratification efforts. Several commenters recommended convening
Technical Expert Panels to provide stakeholders, including clinicians
and medical coding experts, an opportunity to contribute to building
valid and reliable stratification measures.
Many commenters provided suggestions for other social and
demographic variables to collect. One commenter noted the importance of
being able to identify disparities across multiple social and
demographic risk factors. Several commenters suggested that measures
capturing patient experience are important to collect. One commenter
suggested capturing patients' feelings of inclusion. In addition to
race and ethnicity, several commenters suggested sex, sexual
orientation and gender identity, language preference, tribal
membership, and disability status as important social risk factors to
capture. One commenter further suggested collection of access to care,
veteran status, health literacy, and religious minority status data.
One commenter noted that additional important data elements to collect
include employment status, education, insurance status, income level,
and geographical distance from provider. One commenter suggested
stratifying by urban versus rural settings.
Several commenters expressed concerns about penalizing providers
for factors not in the control of the provider. One commenter
questioned whether providers would be penalized in situations where
patients refuse to provide social or demographic data. Another
commenter expressed concern that safety-net hospitals caring for large
proportions of patients with overlapping social and clinical needs
would be penalized. Several commenters noted the importance of
statistical risk adjustment for clinical characteristics and
comorbidities, while one commenter expressed concern about adjusting
quality measures for race and ethnicity. This commenter further
highlighted the difference between systemic racism versus race as a
social risk factor.
Response: We thank the commenters for their support of the use of
area-based indices for stratification and of imputed race and ethnicity
data, but we also acknowledge the concern about using imputed race and
ethnicity data instead of self-reported data. We appreciate commenters'
recommendations regarding data standardization and intend to consider
feedback regarding a timeline for data collection and measure
development.
We will take the commenters' recommendations to collect Z-code data
into consideration. We appreciate the concern that proxy measures of
social and demographic risk have limitations. We thank commenters for
their suggestion to convene Technical Expert Panels, and we appreciate
recommendations for other social and demographic factors to collect.
We acknowledge the concern that providers should not be penalized
for social and demographic risk factors outside of their control. We
would like to clarify that the RFI did not directly address risk
adjustment for patient social factors or demographic variables within
measures, which may set different expected quality results for persons
with certain social risk factors, but rather discusses approach to
distinguish performance between groups to highlight underlying
disparities.
Comment: Several commenters provided specific feedback on methods
for identifying meaningful performance differences within disparity
results. A commenter expressed the importance of determining whether a
stratification approach is suitable for a specific measure type. For
example, the commenter stated that they would not recommend using the
Across-Facility Disparity Method for patient experience measures
because it risks implying that less favorable patient experiences are
typical or expected for certain subgroups. The stakeholder suggested
utilizing a benchmarking and performance threshold approach that
includes the whole patient population rather than a small subgroup of
patients.
A few commenters supported benchmark approaches and a commenter
noted that they may become more powerful comparison tools with time.
A few commenters supported threshold approaches. On the other hand,
a few commenters did not support threshold approaches; a few commenters
stated that threshold approaches should follow benchmarking efforts or
be used once the volume of data increases.
A few commenters did not recommend fixed intervals/rank ordering
approaches due to difficulties in identifying meaningful clinical
differences.
Another commenter supported peer grouping as opposed to risk
adjustment for social risk factors to prevent the risk of potentially
hiding disparities. Another commenter suggested the use of clinical
risk grouping to categorize patients into illness burden groups for
risk adjustment.
A commenter expressed that it is important for measures to be
continuously tested to ensure that they can statistically show
differences in care, particularly when measuring disparities ``at the
level of the
[[Page 72108]]
individual clinician.'' Another commenter stated that data-driven
improved patient outcomes (for example, avoidable hospital admissions,
complications, readmissions) should be at the forefront of identifying
meaningful performance differences as opposed to only focusing on
process measures. A commenter suggested that variability estimates be
provided along with any disparity measurement results that use a
statistical approach for disparity measurement.
A few commenters stated that identifying performance differences in
disparity results depends on the context of the measure, program, and
setting rather than on a statistical standard being uniformly applied
across programs; a few commenters also recommended convening a
Technical Expert Panel to allow stakeholder input on this topic.
A commenter suggested that if stratifying can illuminate
disparities in care, then this should be a criterion for ``maintaining
these measures in the programs.'' A commenter stated that the goal of
helping patients seek equitable care should remain at the forefront
when considering meaningful performance differences. A commenter noted
that as the methodologies are still very new, hospitals should not be
compared based on their ability to reverse negative trend. This
commenter further explained that steps should be taken to identify
facilities that have successfully identified social needs and
implemented interventions to reverse negative trends.
Response: We appreciate the feedback and suggestions provided by
the commenters regarding the identification of meaningful performance
differences within disparity results including threshold approaches,
benchmarking, peer grouping and additional recommendations. We will
take commenters' feedback into consideration in future policy
development.
Comment: Several commenters provided feedback on principles for use
and application of the results of disparity measurement. A commenter
supported CMS's suggestion for disparity reporting decisions to be made
at the program level.
Several stakeholders who commented on confidential reporting
supported CMS's existing approach of an initial period of
confidentially reporting stratified results before publicly reporting
in order to provide facilities time to understand and improve upon
their performance and to ensure sufficient data collection. A commenter
noted that confidential reporting is particularly appropriate while
more is learned about the impact of social determinants of health.
Similarly, a commenter agreed with CMS's suggested approach of
utilizing confidential reporting for new programs and measures. A few
commenters expressed that when stratifying measures by race, ethnicity,
and social factors, it is important to initially confidentially report
and appropriately risk adjust to ensure that providers are not being
held responsible for factors outside of their control. Another
commenter stated that the value of creating and confidentially
reporting a health equity score would be useful to hospitals in their
improvement efforts. A commenter supported CMS's recommendation of
reporting stratified measure results in tandem with overall measure
results, specifically through confidential reporting. One commenter
suggested that a phased approach would allow EHR vendors to build and
implement changes in hospital systems. A commenter stated that assuming
appropriate and actionable data are collected, confidential reporting
should be prioritized since raising awareness to providers about health
inequity is a critical step in initiating improvements.
In terms of public reporting, a commenter supported publicly
reporting stratified measure results and stated that doing so allows
for useful comparisons to be made between individual facilities and
state and national averages.
A few commenters were opposed to publicly reporting disparity
results. One commenter stated that publicly reporting disparity
measurement is not appropriate at this time. A commenter expressed that
publicly reporting data that are stratified by demographic variables
could further perpetuate stereotypes about the type of care provided by
facilities to specific subgroups of patients. Similarly, a commenter
cautioned that public reporting of stratified data presents potential
for a harmful cycle where patients may not want to receive care at
hospitals that care for historically marginalized communities,
resulting in fewer resources for those providers and patients. A few
commenters expressed potential unintended consequences of placing
burden on patients to understand disparity results and that if
utilizing public reporting, it is imperative that providers ensure
their patients understand disparity measurement. Similarly, several
commenters expressed that efforts should be made to educate and inform
patients on how to understand and interpret publicly reported disparity
results.
A commenter expressed the importance for stakeholder input before
public reporting, particularly in the context of newer programs and
measures. A commenter emphasized a similar point that the decision to
publicly report results should be widely agreed upon before
implementation.
A few commenters acknowledged payment accountability as a principle
for use and application of disparity measurement results. A commenter
stated that a health equity score can be used for additional
reimbursement to be linked with community need in order to provide more
resources for specific patient populations. A few commenters made a
similar point that disparity measurement data can help illuminate where
additional resources are needed and this information can then inform
the payment system accordingly to better meet their needs. A commenter
state that it is important to carefully and slowly consider reporting
options, particularly when payment is affected.
Commenters provided additional thoughts when considering principles
for use and application of disparity measurement results. A commenter
noted that it is important to ensure reliability of reported measure
result and a commenter stated sample size should play a role in
determining whether results should be publicly reported. Similarly,
another commenter stated that a challenge of reporting demographic
variables is using the data for meaningful healthcare improvement. A
commenter noted that privacy safeguards should be implemented as part
of programs' reporting processes and a commenter stated that data
collected for disparity measurement should undergo a validation
process.
A commenter stated that as more patient-reported data replace
indirectly estimated data, those results should be reported in tandem
for the purpose of comparison on an organizational basis. The commenter
also suggested that allowing for a voluntary submission period would
provide facilities with an opportunity to slowly begin the process of
collecting and reporting equity data. Similarly, another commenter
expressed that programs can ease into reporting through first reporting
a smaller, well-established social risk variable while remaining
transparent with overall intentions.
Response: We appreciate the feedback and suggestions provided by
the commenters regarding principles for use and application of the
results of disparity measurement, including commenters' feedback to
implement a
[[Page 72109]]
confidential reporting period during which hospitals will be provided
their disparity method results privately and intend to consider the
suggested phased approach. We will take commenters' feedback into
consideration.
Comment: A few commenters emphasized the administrative burden of
collecting, validating, and managing data. Similarly, a few commenters
also noted that digital health technology and software upgrades would
be essential to support increased data collection efforts. A commenter
noted that operationalizing healthcare technology could improve the
patient experience as well by not having to provide social risk and
demographic information multiple times. A few commenters noted that
healthcare technology requires increased funding and resources,
particularly resources for historically marginalized groups and groups
with increased social needs. Another commenter added that actionable
and timely data can assist hospitals in make informed decisions.
A few commenters stated the importance of collaboration in
advancing health equity, particularly best practices. More
specifically, a commenter stated that collaboration should be
prioritized over competition through all health equity advancement
efforts. Similarly, a commenter emphasized that innovation should be
rewarded and those engaging in innovative work in the health equity
space should share it to support other efforts. A commenter expressed
that research and development can contribute to improve health equity.
Another commenter recommended that CMS consider convening a workgroup
to understand potential challenges to health equity efforts and to come
to consensus on recommendations. This commenter further suggested that
CMS's efforts support provider efforts to achieve health equity through
investment, guidance, and best practice facilitation.
A commenter noted that community partnerships will need to be
modified or created in order to ``achieve positive outcomes on social
drivers of health results.'' A commenter noted that additional
clarification about the role of community partnerships and engagement
would be beneficial. A commenter suggested that CMS sponsor a technical
assistance program for providers lacking resources. A commenter stated
that CMS should consider adding questions to patient experience surveys
that can illuminate the healthcare experiences of historically
marginalized groups while ensuring that resources are provided so that
all individuals can complete the survey. One commenter suggested that
CMS provide hospitals with resources for identifying key social drivers
of health that may contribute to disparities.
Additionally, a few commenters noted that time is needed in order
to implement these changes that would result in maximizing data
collection efforts. A commenter suggested increased stakeholder
engagement efforts, such as convening public forums. Another commenter
stated that fair incentives for achieving value-based care objectives
are important.
One commenter suggested that CMS revise the numerator of the Social
Drivers of Health screening measure to include patients screened in any
setting in the prior year, given that current practice recommends not
screening at every admission but instead screening annually.
A commenter expressed support for reporting structural measures
that that demonstrate health equity efforts integrated in hospital
frameworks.
Several commenters noted that their organizations have developed
health equity initiatives or projects similar to the activities
described in the Health Equity RFI and offered more details about their
work.
Response: We appreciate additional feedback and suggestions from
commenters about additional topics such as the optimization of
healthcare technology, collaboration among providers and communities
and the administrative burden of data collection. We will take
commenters' feedback into consideration for future rulemaking.
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 did not propose any changes
to these policies in the CY 2023 OPPS/ASC 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 did not propose any changes to these
policies in the CY 2023 OPPS/ASC 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 did not propose any changes to these policies in
the CY 2023 OPPS/ASC 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
[[Page 72110]]
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 did not
propose any changes to these policies in the CY 2023 OPPS/ASC proposed
rule.
D. Form, Manner, and Timing of Data Submitted for the Hospital OQR
Program
Previously finalized quality measures and information collections
discussed in this section were approved by OMB under control number
0938-1109 (expiration date February 28, 2025). An updated PRA package
reflecting the updated information collection requirements will be
submitted for approval under the same OMB control number.
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 submission requirements at 42
CFR 419.46(d).
a. Alignment of 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).\196\ 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 were submitted for
validation and the beginning of the payments that are affected by these
data, creating compressed processing timelines 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.
---------------------------------------------------------------------------
\196\ 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,\197\ this misalignment has resulted in confusion among
some hospitals regarding submission deadlines and data reporting
quarters.
---------------------------------------------------------------------------
\197\ FY 2011 IPPS/LTCH PPS final rule (75 FR 50220 and 50221).
---------------------------------------------------------------------------
(2) Alignment of 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
In the CY 2023 OPPS/ASC proposed rule (87 FR 44733 through 44735),
beginning with the CY 2024 reporting period/CY 2026 payment
determination, we proposed to align the patient encounter quarters for
chart-abstracted measures with the calendar year. 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
proposed 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). In the proposed rule, we stated our belief 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 finalized patient encounter quarters
and clinical data submission deadlines for the CY 2028 payment
determination are illustrated in Tables 88 and 89, respectively.
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To facilitate this process, we proposed 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 90, 91 and 92 below. However, we note that data submission
deadlines would not change.
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We solicited public comment on our proposal.
Comment: Many commenters supported our proposal to align the
patient encounter quarters for chart-abstracted measures with the
calendar year. Several commenters further stated that alignment would
make the data submission process simpler and reduce the reporting
burden for providers.
Response: We thank the commenters for their support. We agree that
alignment would streamline reporting for chart-abstracted measures and
reduce provider burden.
Comment: One commenter recommended that CMS consider the
implications of this proposal for other measures that cross calendar
years, such as the HCP Influenza Immunization measure. The commenter
further stated that although the HCP Influenza Immunization measure is
only required for the Hospital IQR Program, some hospitals report it
for both the Hospital IQR and Hospital OQR Programs because separating
the data would cause extensive burden.
Response: We thank the commenter for its feedback and will take
this recommendation into consideration for future rulemaking regarding
non-chart-abstracted measures.
Comment: One commenter noted that the clinical data submission
deadlines listed in Table 64 ``Current CY 2028 Payment Determination''
of the CY 2023 OPPS/ASC proposed rule incorrectly stated a CY 2025 date
for the Q2 deadline and CY 2026 dates for the Q1,Q3, and Q4 deadlines,
and should have listed a CY 2026 date for the Q2 deadline and CY 2027
dates for the Q1, Q3, and Q4 deadlines. Another commenter noted that
the clinical data submission deadlines listed in Table 66 ``CY 2024
Payment Determination'' of the CY 2023 OPPS/ASC proposed rule
incorrectly stated CY 2023 and CY 2024 dates which did not match the
deadlines for this payment determination that were stated in Table 67
in the CY 2022 OPPS/ASC final rule with comment period (86 FR 63862).
Response: We thank the commenters for their feedback and have
updated the clinical submission deadlines listed in the tables in this
final rule with comment period.
After consideration of the public comments we received, we are
finalizing our proposal to align the patient encounter quarters for
chart-abstracted measures with the calendar year beginning with the CY
2024 reporting period/CY 2026 payment determination.
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 did not propose any changes to
these policies in the CY 2023 OPPS/ASC proposed rule.
3. Claims-Based Measure Data Requirements
We refer readers to the CY 2019 OPPS/ASC final rule with comment
period (83 FR 59106 through 59107), where we established a 3-year
reporting period for OP-32: Facility 7-Day Risk-Standardized Hospital
Visit Rate after Outpatient Colonoscopy beginning with the CY 2020
payment determination. We refer readers to the CY 2022 OPPS/ASC final
rule with comment period (86 FR 63863) where we finalized a 3-year
reporting period for the Breast Cancer Screening Recall Rates measure
(OP-39). We did not propose any changes to these policies in the CY
2023 OPPS/ASC 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 did not propose any changes to these
policies in the CY 2023 OPPS/ASC 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 with comment
period (78 FR 75112 through 75115), the CY 2016 OPPS/ASC final rule
with comment period (80 FR 70521), and the QualityNet website,
available at https://qualitynet.cms.gov, for a discussion of the
requirements for measure data
[[Page 72113]]
submitted via the HQR System (formerly referred to as the QualityNet
Secure Portal) for the CY 2017 payment determination and subsequent
years. The information collections finalized in the aforementioned
final rules with comment period were approved under OMB control number
0938-1109 (expiration date February 2, 2025). We did not propose any
changes to these policies in the CY 2023 OPPS/ASC proposed rule.
b. Data Submission Requirements for Measures Submitted via the Centers
for Disease Control and Prevention (CDC) National Healthcare Safety
Network (NHSN) Website
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75097 through 75100) for a discussion of the previously
finalized requirements for measure data submitted via the CDC NHSN
website. In addition, we refer readers to the CY 2022 OPPS/ASC final
rule with comment period (86 FR 63866), where we finalized the adoption
of the COVID-19 Vaccination Coverage Among Health Care Personnel
measure (OP-38) beginning with the CY 2022 reporting period/CY 2024
payment determination. We did not propose any changes to these policies
in the CY 2023 OPPS/ASC proposed rule.
6. eCQM Reporting and Submission Requirements
a. Background
We refer readers to the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75106 and 75107), the CY 2015 OPPS/ASC final rule with
comment period (79 FR 66956 through 66961), the CY 2016 OPPS/ASC final
rule with comment period (80 FR 70516 through 70518), the CY 2017 OPPS/
ASC final rule with comment period (81 FR 79785 through 79790), 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 (86 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, we
finalized the adoption of the STEMI eCQM (OP-40) 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 93 for a summary of the previously
finalized quarterly data increase in eCQM reporting beginning with the
CY 2023 reporting period.
[GRAPHIC] [TIFF OMITTED] TR23NO22.129
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 Office of the National Coordinator for
Health Information Technology (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 with comment period (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
[[Page 72114]]
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 did not propose any changes to these policies in the CY 2023
OPPS/ASC 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;
\198\ (2) may use third parties to submit QRDA I files on their behalf;
and (3) may either use abstraction or pull the data from non-certified
sources in order to then input these data into certified EHR technology
(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 did not propose any changes to these policies in
the CY 2023 OPPS/ASC proposed rule.
---------------------------------------------------------------------------
\198\ 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 did not propose any changes to
these policies in the CY 2023 OPPS/ASC 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
did not propose any changes to these policies in the CY 2023 OPPS/ASC
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 did not propose any changes to these policies in the CY 2023 OPPS/
ASC 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
did not propose any changes to these policies in the CY 2023 OPPS/ASC
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 did not
propose any changes to these policies in the CY 2023 OPPS/ASC 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 did not propose any changes to these policies in the
CY 2023 OPPS/ASC 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 did not propose any changes to these policies in the
CY 2023 OPPS/ASC 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
[[Page 72115]]
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 did not propose any changes to these
policies in the CY 2023 OPPS/ASC proposed rule.
9. Hospital OQR Program Validation Requirements
a. Background
We refer readers to the CY 2011 OPPS/ASC final rule with comment
period (75 FR 72105 through 72106), the CY 2013 OPPS/ASC final rule
with comment period (77 FR 68484 through 68487), the CY 2015 OPPS/ASC
final rule with comment period (79 FR 66964 through 66965), the CY 2016
OPPS/ASC final rule with comment period (80 FR 70524), the CY 2018
OPPS/ASC final rule with comment period (82 FR 59441 through 59443),
the CY 2022 OPPS/ASC final rule with comment period (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 with comment period (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 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 with comment period (86 FR 63870) for additional
information on the use of electronic file submissions for chart-
abstracted measure medical records requests. We did not propose any
changes to these policies in the CY 2023 OPPS/ASC 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 with comment
period (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 did not propose any changes to these policies in
the CY 2023 OPPS/ASC proposed rule.
d. Targeting Criteria
(1) Background
In the CY 2012 OPPS/ASC final rule with comment period (76 FR
74485), we finalized a validation selection process in which we select
a random sample of 450 hospitals for validation purposes and select an
additional 50 hospitals based on specific criteria. We finalized a
policy in the CY 2013 OPPS/ASC final rule with comment period (77 FR
68485 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 with comment
period (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 with comment period (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 with comment period (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 with
comment period (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) Addition of Targeting Criterion
In the CY 2023 OPPS/ASC proposed rule (87 FR 44737), beginning with
validations affecting the CY 2023 reporting period/CY 2025 payment
determination, we proposed 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 proposed that a hospital with less than
four quarters of data subject to validation due to receiving an
extraordinary circumstance exception (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
proposed 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 with comment period (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
[[Page 72116]]
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 proposed 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 invited public comment on our proposal.
Comment: A few commenters supported our proposal to add an
additional targeting criterion, citing fair treatment of hospitals and
appropriate focus of CMS's validation efforts on hospitals.
Response: We thank the commenters for their support. After
consideration of the public comments we received, we are finalizing our
proposal to add a fifth criterion to the established targeting criteria
at Sec. 419.46(f)(3) used to select 50 additional hospitals for
validation.
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 with comment period
(85 FR 86185) where we finalized and codified a policy to formalize the
Educational Review Process for Chart-Abstracted Measures, including
Validation Score Review and Correction. We did not propose any changes
to these policies in the CY 2023 OPPS/ASC proposed rule.
9. Extraordinary Circumstances Exception (ECE) Process
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68489), the CY 2014 OPPS/ASC final rule with comment
period (78 FR 75119 through 75120), the CY 2015 OPPS/ASC final rule
with comment period (79 FR 66966), the CY 2016 OPPS/ASC final rule with
comment period (80 FR 70524), the CY 2017 OPPS/ASC final rule with
comment period (81 FR 79795), the CY 2018 OPPS/ASC final rule with
comment period (82 FR 59444), the CY 2022 OPPS/ASC final rule with
comment period (86 FR 63873), and 42 CFR 419.46(e) for a complete
discussion of our extraordinary circumstances exception (ECE) process
under the Hospital OQR Program. We did not propose any changes to these
policies in the CY 2023 OPPS/ASC proposed rule.
10. Hospital OQR Program Reconsideration and Appeals Procedures
We refer readers to the CY 2013 OPPS/ASC final rule with comment
period (77 FR 68487 through 68489), the CY 2014 OPPS/ASC final rule
with comment period (78 FR 75118 through 75119), the CY 2016 OPPS/ASC
final rule with comment period (80 FR 70524), the CY 2017 OPPS/ASC
final rule with comment period (81 FR 79795), the CY 2021 OPPS/ASC
final rule with comment period (85 FR 68185), and 42 CFR 419.46(g) for
our reconsideration and appeals procedures. We did not propose any
changes to these policies in the CY 2023 OPPS/ASC 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
[[Page 72117]]
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 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 the CY 2023 OPPS/ASC
proposed rule (87 FR 44533 through 44534).
2. Reporting Ratio Application and Associated Adjustment Policy for CY
2023
We proposed to continue our established policy of applying the
reduction of the OPD fee schedule increase factor through the use of a
reporting ratio for those hospitals that fail to meet the Hospital OQR
Program requirements for the full CY 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 proposed to continue
to apply the reporting ratio to all services calculated using the OPPS
conversion factor. We proposed to continue to apply the reporting
ratio, when applicable, to all HCPCS codes to which we have proposed
status indicator assignments of ``J1'', ``J2'', ``P'', ``Q1'', ``Q2'',
``Q3'', ``R'', ``S'', ``T'', ``V'', and ``U'' (other than New
Technology APCs to which we have proposed status indicator assignments
of ``S'' and ``T''). We proposed to continue to exclude services paid
under New Technology APCs. We proposed to continue to apply the
reporting ratio to the national unadjusted payment rates and the
minimum unadjusted and national unadjusted copayment rates of all
applicable services for those hospitals that fail to meet the Hospital
OQR Program reporting requirements. We also proposed to continue to
apply all other applicable standard adjustments to the OPPS national
unadjusted payment rates for hospitals that fail to meet the
requirements of the Hospital OQR Program. Similarly, we proposed to
continue to calculate OPPS outlier eligibility and outlier payment
based on the reduced payment rates for those hospitals that fail to
meet the reporting requirements. In addition to our proposal to
implement the policy through the use of a reporting ratio, we also
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 was 0.9805, which, when
multiplied by the proposed full conversion factor of $86.785, equaled a
proposed conversion factor for hospitals that fail to meet the
requirements of the Hospital OQR Program (that is, the reduced
conversion factor) of $85.093.
We did not receive any public comments on our proposal. For this
final rule with comment period, the final reporting ratio is 0.9807,
which, when multiplied by the final full conversion factor of $85.585,
equals a final conversion factor for hospitals that fail to meet the
requirements of the Hospital OQR Program (that is, the reduced
conversion factor) of $83.934. We are finalizing our proposal to
continue to calculate OPPS outlier eligibility and outlier payment
based on the reduced payment rates for those hospitals that fail to
meet the reporting requirements. We are also finalizing our proposals
to implement the policy through the use of a reporting ratio, and to
calculate the reporting ratio to four decimals (rather than the
previously used three decimals) to more precisely calculate the reduced
adjusted payment and copayment rates for hospitals that fail to meet
the Hospital OQR Program requirements for CY 2023 payment.
XV. Requirements for the Ambulatory Surgical Center Quality Reporting
(ASCQR) Program
A. Background
1. Overview
We refer readers to section XIV.A.1 of the CY 2020 OPPS/ASC final
rule (84
[[Page 72118]]
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);