Due to technical issues, FR Doc. 2022-23584 published twice in the
Rural Business-Cooperative Service
Rural Utilities Service
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Defense Acquisition Regulations System
Navy Department
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
National Institutes of Health
Coast Guard
Federal Emergency Management Agency
Fish and Wildlife Service
Indian Affairs Bureau
Land Management Bureau
National Park Service
Alcohol, Tobacco, Firearms, and Explosives Bureau
Antitrust Division
Employee Benefits Security Administration
Occupational Safety and Health Administration
Copyright Office, Library of Congress
Bureau of the Fiscal Service
Foreign Assets Control Office
Internal Revenue Service
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents electronic mailing list, go to https://public.govdelivery.com/accounts/USGPOOFR/subscriber/new, enter your e-mail address, then follow the instructions to join, leave, or manage your subscription.
Bureau of Consumer Financial Protection.
Consumer financial protection circular.
The Consumer Financial Protection Bureau (Bureau or CFPB) has issued Consumer Financial Protection Circular 2022-07, titled, “Reasonable Investigation of Consumer Reporting Disputes.” In this circular, the Bureau responds to the questions, “1. Are consumer reporting agencies and the entities that furnish information to them (furnishers) permitted under the Fair Credit Reporting Act (FCRA) to impose obstacles that deter submission of disputes? ” and “2. Do consumer reporting agencies need to forward to furnishers consumer-provided documents attached to a dispute? ”
The Bureau released this circular on its website on November 10, 2022.
Enforcers, and the broader public, can provide feedback and comments to
David Wake, Senior Counsel, at (202) 435-9613. If you require this document in an alternative electronic format, please contact
1. Are consumer reporting agencies and the entities that furnish information to them (furnishers) permitted under the Fair Credit Reporting Act (FCRA) to impose obstacles that deter submission of disputes?
2. Do consumer reporting agencies need to forward to furnishers consumer-provided documents attached to a dispute?
1. No. Consumer reporting agencies and furnishers are liable under the FCRA if they fail to investigate any dispute that meets the statutory and regulatory requirements, as described in more detail below. Enforcers may bring claims if consumer reporting agencies and furnishers limit consumers' dispute rights by requiring any specific format or requiring any specific attachment such as a copy of a police report or consumer report beyond what the statute and regulations permit.
2. It depends. Enforcers may bring a claim if a consumer reporting agency fails to promptly provide to the furnisher “all relevant information” regarding the dispute that the consumer reporting agency receives from the consumer. While there is not an affirmative requirement to specifically provide original copies of documentation submitted by consumers, it would be difficult for a consumer reporting agency to prove they provided all relevant information if they fail to forward even an electronic image of documents that constitute a primary source of evidence.
Information contained in consumer reports has critical effects on Americans' daily lives. Consumer reports are used to evaluate consumers' eligibility for loans and the interest rates they pay, their eligibility for insurance and the premiums they pay, their eligibility for rental housing, and their eligibility for checking accounts. Prospective employers commonly use consumer reports in their hiring decisions.
A central component of the protections against inaccurate information is the requirement to conduct a reasonable investigation of consumer disputes. Since its enactment, the FCRA has required consumer reporting agencies to investigate consumer disputes.
These responsibilities are part of the FCRA's overall framework for ensuring accuracy in consumer reports. Consumers are in a good position to identify inaccurate information in their consumer reports, and timely and responsive investigations of these identified inaccuracies is crucial to the FCRA's purpose of ensuring fair and accurate consumer reporting.
Despite Congress's repeated efforts to promote accuracy by requiring reasonable investigation of disputes, consumers continue to report problems with accuracy and dispute investigations. Between January and September 2021, the CFPB received more than 500,000 complaints about credit or consumer reporting; the most common issue they identified was incorrect information on a credit report.
The CFPB is responsible for issuing rules and enforcing compliance with these provisions of the FCRA.
The CFPB is aware that consumer reporting agencies and furnishers have sought to evade the obligation to investigate disputes by requiring consumers to submit particular items of information or documentation with a dispute before the entity will conduct its investigation of the dispute. Examples of this conduct include:
• Consumer reporting agencies that require a consumer to provide a recent copy of the consumer's report or file disclosure before investigating disputes despite the consumer providing sufficient information to investigate the disputed information;
• Furnishers that require a consumer to provide additional specific documents even though the consumer has already provided the supporting documentation or other information reasonably required to substantiate the basis of a direct dispute;
• Consumer reporting agencies or furnishers that require a consumer to attach a completed proprietary form before investigating the consumer's dispute.
Enforcers may consider bringing an action under the FCRA when furnishers and consumer reporting agencies require consumers to provide documentation or proof documents, other than as described in the statute or regulation, as a precondition to investigation. For disputes received directly from a consumer, a consumer reporting agency or furnisher must reasonably investigate the dispute unless they have reasonably determined that the dispute is frivolous or irrelevant.
Accordingly, consumer reporting agencies and furnishers must reasonably investigate disputes received directly from consumers that are not frivolous or irrelevant—and furnishers must reasonably investigate all indirect disputes received from consumer reporting agencies—even if such disputes do not include the entity's preferred format, preferred intake forms, or preferred documentation or forms.
Enforcers may bring a claim if a consumer reporting agency fails to promptly provide to the furnisher “all relevant information” regarding the dispute that the consumer reporting agency receives from the consumer.
When transmitting information about a dispute, a consumer reporting agency may be able to demonstrate that it has transmitted “all relevant information” even if it does not provide original documents in paper form. However, given that primary sources of evidence provided by consumers can be dispositive in determining whether there has been a furnishing error, and given that the character of a primary source of evidence is probative and thus relevant to the investigation,
The consumer reporting agency's failure to provide the furnisher with all relevant information limits the
Federal Trade Commission.
Final rule; delay of effectiveness.
The Federal Trade Commission is delaying the effective date of portions of the amended Safeguards Rule as published on December 9, 2021.
David Lincicum (202-326-2773), Division of Privacy and Identity Protection, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
On December 9, 2021, the Federal Trade Commission (Commission) amended the Safeguards Rule, 16 CFR part 314. While portions of the amended rule became effective on January 10, 2022, certain provisions were originally to become effective December 9, 2022. 16 CFR 314.5.
The Commission is aware there is a reported shortage of qualified personnel to implement information security programs and supply chain issues may lead to delays in obtaining necessary equipment for upgrading security systems.
The Commission is issuing the final rule without prior notice and the opportunity for public comment and, as explained below, without the delayed effective date ordinarily prescribed by the Administrative Procedure Act (APA).
The Commission believes the public interest is best served by revising 16 CFR 314.5 to delay the effective date of certain portions of the Safeguards Rule and by making such revision effective immediately upon publication in the
The APA also requires a 30-day delayed effective date, except for “(1) substantive rules which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause.”
In accordance with the requirements of the Paperwork Reduction Act (PRA), an agency may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The Commission has reviewed this final rule pursuant to authority delegated by the OMB and has determined it does not contain any collections of information pursuant to the PRA.
The Regulatory Flexibility Act (RFA)
Pursuant to the Congressional Review Act (5 U.S.C. 801 through 808), the Office of Information and Regulatory Affairs designated this rule as not a “major rule,” as defined by 5 U.S.C. 804(2).
Consumer protection, Credit, Data protection, Privacy, Trade practices.
For the reasons stated above, the Federal Trade Commission amends 16 CFR part 314 as follows:
15 U.S.C. 6801(b), 6805(b)(2).
Sections 314.4(a), (b)(1), (c)(1) through (8), (d)(2), (e), (f)(3), (h), and (i) are effective as of June 9, 2023.
By direction of the Commission.
the following statement will not appear in the Code of Federal Regulations.
The Safeguards Rule requires financial institutions to develop, implement, and maintain a comprehensive information security program to protect customer information.
While I continue to note my concerns about the revisions to the recently amended Safeguards Rule, I support extending the effective date. Labor shortages of qualified personnel have hampered efforts by companies to implement information security programs. Some estimates place the shortage of cybersecurity professionals in the 500,000 range.
The revisions finalized in December 2021 did not merely codify basic security practices of most financial institutions. Rather, the modifications imposed new onerous, misguided, and complex obligations. Safeguarding customer information is important. But it is still unclear whether these mandates will translate into a significant reduction in data security risks or offer other substantial consumer benefits. Regardless of the rule's effects, companies should be given the time necessary to correctly implement the final rule's burdensome requirements. For these reasons, I support extending the effective date until June 2023.
Federal Energy Regulatory Commission, Department of Energy.
Final rule.
The Federal Energy Regulatory Commission issues this final rule to require natural gas pipelines to submit all supporting statements, schedules and workpapers in native format (
This rule is effective December 23, 2022.
1. In this final rule, the Federal Energy Regulatory Commission (Commission) revises the filing and reporting requirements for natural gas pipelines filing a Natural Gas Act (NGA) section 4 rate case.
2. When a natural gas pipeline files under NGA section 4 to change its rates, the Commission requires the pipeline to provide detailed support for all the components of its cost of service.
3. Commission regulations require that natural gas pipelines filing general NGA section 4 rate cases provide certain statements (Statements A through P) and associated schedules.
4. In the NOPR, the Commission proposed to require natural gas pipelines to submit all statements, schedules and workpapers in native format with formulas and links intact
5. The Commission also stated that submitting all statements, schedules and workpapers in native format will provide for a timely and comprehensive analysis of a rate case filing.
6. Finally, the Commission stated that the current policy on this issue is outdated because information technology has significantly improved since the issuance of Order No. 582 in 1995, and pipelines now routinely develop rate cases using Microsoft Excel and submit them electronically.
7. The NOPR was published in the
8. We adopt the proposal set forth in the NOPR to require natural gas pipelines to submit all supporting statements, schedules and workpapers in native format with all links and formulas included when filing an NGA section 4 rate case. We acknowledge the requests from certain commenters that the Commission undertake various additional initiatives, but we find that those requested initiatives go beyond the scope of this rulemaking, as explained below.
9. Energy Transfer argues that “the proposed rule takes the additional, unjust and unreasonable step of requiring a pipeline to create links and formulas in successive documents even if the pipeline did not need or use such links and formulas when it prepared and filed its rate case.”
10. Joint Commenters disagree with Energy Transfer, arguing that the burden on pipelines would be limited because Order No. 582 already requires pipelines to provide data for certain statements with formulas included, and subsequent orders reiterate these requirements.
11. BHE GT&S requests that the Commission clarify that a natural gas pipeline is not required to create links across statements and schedules where they did not already exist.
12. We disagree with Energy Transfer's argument that the NOPR proposal which we adopt in this final rule is unjust and unreasonable. First, we find that this final rule does not unreasonably shift litigation costs from intervenors to the pipeline. The pipeline has the burden under NGA section 4 to support its proposed rates in its case in chief.
13. Finally, we deny BHE GT&S's request for clarification that a natural gas pipeline is not required to create links across statements and schedules where they did not already exist. Rather, this final rule
14. Energy Transfer, citing the NOPR, notes that the Commission “seek[s] to address this
15. Based on the record developed in this proceeding, we disagree with Energy Transfer's contention that an information gap does not exist. A rate model without formulas and links intact is much less useful to rate case participants who are trying to evaluate a natural gas pipeline's rate design, cost allocations, or rate calculations. When a pipeline files a rate model without formulas and links, rate case participants must recreate the natural gas pipeline's model, which is inefficient and duplicative. Requiring spreadsheets and workpapers to be filed with links and formulas included will allow rate case participants to manipulate the cost-of-service components and billing determinants without creating their own rate models. This will expedite settlement negotiations and will allow all rate case participants to evaluate the filing on an equal footing with the pipeline.
16. Moreover, under this final rule, rate case participants can begin evaluating a natural gas pipeline's rate design, cost allocations, and rate calculations immediately in the comment period after a pipeline files a section 4 rate case and thus file better-informed comments. Furthermore, requiring pipelines to file all statements and schedules with formulas and links intact will enable all rate case participants to evaluate the filing and any settlement offers from the same baseline, as opposed to all rate case participants creating their own rate models. Thus, the final rule will streamline the rate case process, including settlement discussions, and avoid rate case participants exchanging multiple rounds of discovery and testimony just to understand the rate model's underlying calculations, which are fundamental to the rate case.
17. Energy Transfer argues that there is no evidence that natural gas pipelines are severing existing links.
18. Whether or not pipelines are severing links or the links never existed, there is an information gap between the pipeline and rate case participants involved in a rate case if the rate model fails to include links and formulas essential to understanding the rate calculations. This final rule seeks to close that gap.
19. Energy Transfer states the Commission's proposal fails to include proposed regulations describing what must be provided in a rate case filing. Therefore, pipelines would not have any notice in the regulations as to what is being required by the rulemaking unless it separately was aware of this proceeding.
20. We are not persuaded by Energy Transfer's argument that the NOPR failed to provide adequate notice to pipelines of what is being required by this rulemaking. Although the NOPR did not include proposed regulations, the NOPR fully described the proposed filing requirements. Furthermore, the Commission's regulations do not discuss filing formats, and we see no need in this proceeding to add that level of granularity to meet the requirements of the Administrative Procedures Act.
21. Joint Commenters request that the final rule address the presumption that native format files, with formulas intact, of publicly filed material should be publicly available. Joint Commenters note that ratepayers have recently experienced a situation where a pipeline claimed that links in its Excel spreadsheets for statements and related schedules should receive confidential treatment, even though the statements and schedules themselves (without links) had been filed publicly.
22. INGAA opposes Joint Commenters' request that the final rule implement a blanket denial of any request under § 388.112 for privileged treatment of any portion of the rate model spreadsheets that the Commission is requiring natural gas pipelines to file as part of the proposed rule.
23. INGAA argues that there are many reasons to seek protection of the rate model spreadsheets based on concerns that disclosure may result in competitive disadvantage or other business injury. Specifically, INGAA states that it is concerned that third parties with no legitimate interest in the ratemaking process may misuse, modify, or misrepresent the cost allocation or rate design results contained within the spreadsheets in ways that would be difficult or impossible to clarify. INGAA argues that such misuse could be the basis for unsupported claims that the pipeline is earning more than a reasonable return or unfairly allocating costs, which could affect the pipeline's value to potential investors, lenders, shippers, or other market participants. INGAA states that any administrative convenience is outweighed by the risk of competitive harm or other business injury resulting from publicly filing proprietary information, and that the Commission and the participants in a rate case already have the unobstructed right to this information.
24. We decline to adopt Joint Commenters' requested clarification. A filer may request confidential treatment, and the Commission will evaluate such requests on a case-by-case basis. In such cases, the data sets and spreadsheets should be submitted in both privileged, unredacted form and in public, redacted form, pursuant to 18 CFR 388.112.
25. INGAA requests that the Commission clarify that “formulas and links intact” means formulas and links within and between statements, schedules and workpapers
26. In addition, INGAA states that the Commission should continue to permit pipelines to file Statements O and P in any manner consistent with the current FERC Implementation Guide, specifically in “any electronic format that renders text, graphics, spreadsheets or data bases that the Commission accepts.”
27. We affirm that the final rule's requirement that rate models be filed with “formulas and links intact” applies to statements, schedules, and workpapers filed in the same rate case and not to formulas contained in or links to spreadsheets not required as part of the initial filing. However, we clarify that to the extent a natural gas pipeline creates a workpaper to create a statement or schedule required by § 154.312 of the Commission's regulations (
28. We grant the request to clarify that Statements O and P do not contain links within the statement or to other statements or schedules, and therefore may continue to be filed in any manner consistent with the FERC Implementation Guide for these statements. We also affirm that this final rule does not expand the information that pipelines must submit when initiating an NGA section 4 general rate case but clarifies the format requirements with which such information must comply.
29. BHE GT&S requests that the Commission clarify that the requirement for natural gas pipelines to provide supporting statements, schedules and workpapers in native format should “also apply equally to all parties, including Commission staff and intervenors, when submitting rate case materials.”
30. The NOPR did not propose to require rate case participants to provide supporting statements, schedules and workpapers in native format during NGA section 5 proceedings as suggested by BHE GT&S. We decline to apply the final rule to NGA section 5 complaint cases, as they are outside the scope of this proceeding. The final rule applies solely to natural gas pipelines filing general NGA section 4 rate cases. Moreover, we decline to require all rate case participants to a general NGA section 4 rate case to comply with the final rule. In an NGA section 4 rate case, the pipeline has the burden of proof to justify its change in rates. If a rate case is fully litigated at hearing, natural gas pipelines may seek rate models with links and formulas included from other participants through discovery.
31. Public Citizen argues that additional disclosure improvements are required to ensure the public has access to accurate information about the shippers that secure shipping capacity on natural gas pipelines. Public Citizen states that currently the Commission's regulations at 18 CFR 284.13(b) delegate such reporting to the pipelines, allowing natural gas pipelines to post shipper information on their website, rather than having the Commission publish such information in a centralized format on the Commission's website. Public Citizen further argues that natural gas pipelines' compliance with 18 CFR 284.13(b) is haphazard, with natural gas pipelines prioritizing their own website content and making it difficult to find the Commission-required disclosures. Public Citizen contends that the Commission's rule requiring pipelines to archive such information for only 90 days impedes the public interest, because most pipelines charge a fee to access material older than 90 days. In addition, Public Citizen argues that it is difficult to locate shipper information on many pipeline websites. Therefore, Public Citizen requests that the Commission expand the final rule to include natural gas pipeline reporting requirements. Public Citizen suggest that the Commission post shipper data and other information on the Commission's website and provide the public with free archival access.
32. We decline to expand the final rule as Public Citizen requests. The NOPR did not propose reforms related to these issues raised by Public Citizen. The final rule is intended to improve the efficiency of general NGA section 4 rate cases, not to revise separate and unrelated reporting requirements already set forth in the Commission's regulations. Therefore, Public Citizen's concerns are outside the scope of this proceeding and we decline to address them at this time.
33. The information collection requirements contained in this final rule are subject to review by the Office of Management and Budget (OMB) under section 3507(d) of the Paperwork Reduction Act of 1995.
34. This final rule modifies the currently approved information collection associated with FERC-545, Gas Pipeline Rates: Rate Change (Non-Formal) (OMB Control No. 1902-0154) (FERC-545) by updating the requirements for submitting a rate case under section 4 of the NGA.
35. Interested persons may obtain information on the reporting requirements by contacting Ellen Brown, Office of the Executive Director, Federal Energy Regulatory Commission, 888 First Street NE, Washington, DC 20426 via email (
36. In the NOPR, the Commission solicited comments on the Commission's need for this information, whether the information will have practical utility, the accuracy of the burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected or retained, and any suggested methods for minimizing respondents' burden, including the use of automated information techniques.
37.
38.
39.
40.
41.
42.
43.
44. The Commission estimates that the final rule will affect the burden
45. For the purposes of estimating burden in this final rule, in the table above, we conservatively estimate the annual total of general section 4 rate cases to be eight. This number is higher than the Commission's average number of section 4 rate cases, but we created our estimate to allow for potential additional rate case submissions.
46. FERC-545 is required to implement rates pursuant to sections 4, 5, and 16 of NGA, (15 U.S.C. 717c& 717o, Pub. L. 75 688, 52 Stat. 822 and 830). NGA sections 4, 5, and 16 authorize the Commission to inquire into rate structures and methodologies and to set rates at a just and reasonable level. Specifically, a natural gas pipeline must obtain Commission authorization for all rates and charges made, demanded, or received in connection with the transportation or sale of natural gas in interstate commerce. The modification as described in this final rule in Docket No. RM21-18-000 only impacts filings under section 4 of the NGA. The collections associated with sections 5 and 16 remain unchanged.
47. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.
48. The Regulatory Flexibility Act of 1980 (RFA)
49. The final rule only applies to natural gas pipelines who file a section 4 rate case. There are a total of 145 entities that may file a rate change and may be impacted by the final rule. The Small Business Administration (SBA) defines a small entity in the category of, “Pipeline Transportation of Natural Gas”
50. In addition to publishing the full text of this document in the
51. From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
52. User assistance is available for eLibrary and the FERC's website during normal business hours from FERC Online Support at 202-502-6652 (toll free at 1-866-208-3676) or email at
53. This final rule is effective December 23, 2022. The Commission has determined, with the concurrence of the Administrator of the Office of
By the Commission. Commissioner Danly is concurring with a separate statement attached.
I concur with today's final rule as I believe it complies with the Natural Gas Act and the Administrative Procedure Act.
For these reasons, I respectfully concur.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is temporarily modifying the operating schedule that governs the SR223 (Gwynn's Island) Bridge, across Milford Haven, mile 0.1, at Hudgins, Virginia. The temporary modification will allow the drawbridge to be maintained in the closed-to-navigation position and is necessary to accommodate bridge maintenance.
This temporary final rule is effective from December 23, 2022, through 11 p.m. on April 15, 2023.
To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this temporary final rule, call or email Ms. Crystal Tucker, Bridge Administration Branch Fifth District, Coast Guard telephone 757-398-6422, email
On June 14, 2022, the Coast Guard published a notice of proposed rulemaking, with a request for comments, entitled Drawbridge Operation Regulation; Milford Haven, Hudgins, VA in the
The SR223 (Gwynn's Island) Bridge, across Milford Haven, mile 0.1, at Hudgins, Virginia has a vertical clearance of 12 feet above mean high water in the closed position and unlimited vertical clearance above mean high water in the open position. The current operating schedule for the drawbridge is published in 33 CFR 117.5.
This temporary rule is necessary to facilitate safe and effective maintenance of the drawbridge. Under this temporary rule, the drawbridge will be maintained in the closed-to-navigation position twenty-four hours a day, seven days a week. The bridge will not be able to open for emergencies and there is no immediate alternative route for vessels unable to pass through the bridge in the closed position. Vessels that can safely transit through the bridge in the closed position with the reduced clearance must provide at least a thirty-minute notice to allow for navigation safety. The SR223 (Gwynn's Island) Bridge is the only land-based method for access on and off Gwynn's Island, therefore, placing the bridge in the open position to perform extensive bridge maintenance would adversely affect residents on the island.
The Coast Guard is issuing this rule under authority in 33 U.S.C. 499.
The Coast Guard provided a comment period of 16 days and no comments were received. No changes were made to the regulatory text of this temporary final rule.
We developed this rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, it has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is a result of pre rulemaking coordination with maritime stakeholders including federal agencies. This proposed rule effectively balances
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rule. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the bridge may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series) which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule promulgates the operating regulations or procedures for drawbridges and is categorically excluded from further review, under paragraph L49, of Chapter 3, Table 3-1 of the U.S. Coast Guard Environmental Planning Implementation Procedures.
Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this rule.
Bridges.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:
33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland Security Delegation No. 0170.1.
The draw of the SR223 (Gwynn's Island) Bridge, mile 0.1, in Hudgins, need not be open for vessels.
Coast Guard, Department of Homeland Security (DHS).
Temporary final rule.
The Coast Guard is establishing a temporary, 500-yard radius, moving security zone for a certain vessel carrying Certain Dangerous Cargoes (CDC) within the Corpus Christi Ship Channel and La Quinta Channel. The temporary security zone is needed to protect the vessels, the CDC cargo, and the surrounding waterway from terrorist acts, sabotage, or other subversive acts, accidents, or other events of a similar nature. Entry of vessels or persons into this zone is prohibited unless specifically authorized by the Captain of the Port Sector Corpus Christi or a designated representative.
This rule is effective without actual notice from November 23, 2022, until November 28, 2022. For the purposes of enforcement, actual notice will be used from November 22, 2022, until November 23, 2022.
If you have questions on this rule, call or email Lieutenant Commander Anthony Garofalo, Sector Corpus Christi
The Coast Guard is issuing this temporary rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable. We must establish this security zones by November 22, 2022, to ensure security of this vessel and lack sufficient time to provide a reasonable comment period and then consider those comments before issuing the rule.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The Coast Guard is issuing this rule under authority in 46 U.S.C. 70034 (previously 33 U.S.C. 1231). The Captain of the Port Sector Corpus Christi (COTP) has determined that potential hazards associated with the transit of the Motor Vessel (M/V) FLEX AURORA when loaded will be a security concern within a 500-yard radius of the vessel. This rule is needed to provide for the safety and security of the vessels, their cargo, and surrounding waterway from terrorist acts, sabotage or other subversive acts, accidents, or other events of a similar nature while they are transiting within Corpus Christi, TX, from November 22, 2022, until November 28, 2022.
The Coast Guard is establishing four 500-yard radius temporary moving security zones around M/V FLEX AURORA. The zone for the vessel will be enforced from November 22, 2022, until November 28, 2022. The duration of the zone is intended to protect the vessel and cargo and surrounding waterway from terrorist acts, sabotage or other subversive acts, accidents, or other events of a similar nature. No vessel or person will be permitted to enter the security zone without obtaining permission from the COTP or a designated representative.
Entry into the security zone is prohibited unless authorized by the COTP or a designated representative. A designated representative is a commissioned, warrant, or petty officer of the U.S. Coast Guard (USCG) assigned to units under the operational control of USCG Sector Corpus Christi. Persons or vessels desiring to enter or pass through each zone must request permission from the COTP or a designated representative on VHF-FM channel 16 or by telephone at 361-939-0450. If permission is granted, all persons and vessels shall comply with the instructions of the COTP or designated representative. The COTP or a designated representative will inform the public through Broadcast Notices to Mariners (BNMs), Local Notices to Mariners (LNMs), and/or Marine Safety Information Bulletins (MSIBs) as appropriate for the enforcement times and dates for each security zone.
We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders, and we discuss First Amendment rights of protestors.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This rule has not been designated a “significant regulatory action,” under Executive Order 12866. Accordingly, this rule has not been reviewed by the Office of Management and Budget (OMB).
This regulatory action determination is based on the size, duration, and location of the security zone. This rule will impact a small designated area of 500-yards around the moving vessel in the Corpus Christi Ship Channel and La Quinta Channel as the vessel transit the channel over a five day period. Moreover, the rule allows vessels to seek permission to enter the zones.
The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
While some owners or operators of vessels intending to transit the temporary security zone may be small entities, for the reasons stated in section V.A above, this rule will not have a significant economic impact on any vessel owner or operator.
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.
Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. If you believe this rule has implications for federalism or Indian tribes, please contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
We have analyzed this rule under Department of Homeland Security Directive 023-01 and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a moving security zone lasting for the duration of time that the M/V FLEX AURORA is within the Corpus Christi Ship Channel and La Quinta Channel while loaded with cargo. It will prohibit entry within a 500 yard radius of M/V FLEX AURORA while the vessel is transiting loaded within Corpus Christi Ship Channel and La Quinta Channel. It is categorically excluded from further review under L60 in Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
46 U.S.C 70034, 70051; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 00170.1, Revision No. 01.2.
(a)
(b)
(c)
(2) Persons or vessels desiring to enter or pass through the zones must request permission from the COTP Sector Corpus Christi on VHF-FM channel 16 or by telephone at 361-939-0450.
(3) If permission is granted, all persons and vessels shall comply with the instructions of the COTP or designated representative.
(d)
Postal Service
Final rule.
The Postal Service is revising
Dale Kennedy at 202-268-6592 or Kathy Frigo at 202-268-4178.
New prices are posted under Docket Number CP2023-42 on the Postal Regulatory Commission's website at
For Priority Mail International items destined to Canada, the Postal Service is collapsing price groups 1.1 through 1.8 (which are based on origin ZIP Code) into a single country group. In addition, the Postal Service is eliminating the related fee for the International Service Center (ISC) Official Zone Chart for Priority Mail International pieces destined to Canada.
Also, to conform to requested country nomenclature, the Postal Service is changing the official name of Turkey to the Republic of Turkiye, with Turkiye as the short name, in related sections of the IMM.
This final rule describes the international price and classification
• Global Express Guaranteed®.
• Priority Mail Express International®.
• Priority Mail International® (PMI).
• First-Class Package International Service.
• International Priority Airmail®.
• International Surface Air Lift®.
• Direct Sacks of Printed Matter to One Addressee (Airmail M-bag®).
• The following competitive international extra services and fees:
• International Insurance.
• Certificate of Mailing.
• International Registered Mail.
• International Return Receipt.
• Customs Clearance and Delivery Fee.
For pricing, see the Postal Explorer website at
Global Express Guaranteed (GXG) service provides fast international shipping, with international transportation and delivery provided through an alliance with FedEx Express®. The price increase for GXG service averages 4.9 percent.
The Postal Service provides Commercial Base® pricing to online customers who prepare and pay for GXG shipments via USPS-approved payment methods (other than Click-N-Ship® service), with a discount below the published retail prices for GXG service. Customers who prepare GXG shipments via Click-N-Ship service will continue to pay retail prices. Commercial Plus® prices are set to match the Commercial Base prices.
Priority Mail Express International (PMEI) service provides fast service to approximately 180 countries in 3-5 business days for many major markets, although the actual number of days may vary based upon origin, destination, and customs delays. PMEI with Money-Back Guarantee service is available for certain destinations. (Due to COVID-19 service impacts, PMEI with Money-Back Guarantee service has been suspended for several destinations until further notice. For more information, see the USPS Service Updates page on
The Postal Service will continue to include PMEI service in customized contracts offered to customers who meet certain revenue thresholds and are willing to commit a larger amount of revenue to the USPS® for PMEI service and PMI service.
PMEI flat rate pricing continues to be available for Flat Rate Envelopes.
Priority Mail International (PMI) is an economical way to send merchandise and documents to approximately 180 countries in 6-10 business days for many major markets, although the actual number of days may vary based upon origin, destination, and customs delays. The price increase for PMI service averages 6.0 percent. The Commercial Base price provides a discount below the published retail prices for customers who prepare and pay for PMI items via permit imprint, online at USPS.com, or as registered end-users using an authorized PC Postage vendor (with the exception of Click-N-Ship). Customers who prepare PMI shipments via Click-N-Ship pay retail prices. Commercial Plus prices will be equivalent to Commercial Base; however, deeper discounting may still be made available to customers through negotiated service agreements.
The Postal Service will continue to include PMI service in customized contracts offered to customers who meet certain revenue thresholds and are willing to commit to a larger amount of revenue to the USPS for PMEI and PMI.
PMI flat rate pricing continues to be available for Flat Rate Envelopes, Small Flat Rate Boxes, and Medium and Large Flat Rate Boxes.
First-Class Package International Service (FCPIS) is an economical international service for small packages not exceeding 4 pounds in weight and $400 in value. The price increase for FCPIS averages 6.5 percent. The Commercial Base price provides a discount below the published retail prices for customers who prepare and pay for FCPIS items via permit imprint or by USPS-approved online payment methods. Customers who prepare FCPIS shipments via Click-N-Ship service pay retail prices. Commercial Plus prices will be equivalent to Commercial Base; however, deeper discounting will be made available to customer through negotiated service agreements.
Electronic USPS Delivery Confirmation International service (E-USPS DELCON INTL®) is a tracking service available at no charge for FCPIS items to select destination countries.
International Priority Airmail (IPA) service, including IPA M-bags, is a commercial service designed for volume mailings of all First-Class Mail International postcards, letters, and large envelopes (flats), and for volume mailings of FCPIS packages (small packets) weighing up to a maximum of 4.4 pounds. IPA shipments are typically flown to foreign destinations (exceptions apply to Canada) and are then entered into that country's air or surface priority mail system for delivery. The price increase for IPA is 3.5 percent. International Surface Airlift (ISAL) is like IPA except that once flown to the foreign destination, ISAL is entered into that country's air or surface nonpriority mail system for delivery. The price increase for ISAL is 12.0 percent.
An Airmail M-bag is a direct sack of printed matter sent to a single foreign addressee at a single address. Prices are based on the weight of the sack. The price increase for Airmail M-bag service averages 6.4 percent.
Depending on country destination and mail type, customers may add a variety of extra services to their outbound shipments and pay a variety of fees. The Postal Service proposes to increase fees for certain competitive international extra services as follows:
•
•
•
•
•
•
•
We will publish an appropriate amendment to 39 CFR part 20 to reflect these changes.
The Postal Service hereby adopts the following changes to
Foreign relations, International postal services.
Accordingly, 39 CFR part 20 is amended as follows:
5 U.S.C. 552(a); 13 U.S.C. 301-307; 18 U.S.C. 1692-1737; 39 U.S.C. 101, 401, 403, 404, 407, 414, 416, 3001-3011, 3201-3219, 3403-3406, 3621, 3622, 3626, 3632, 3633, and 5001.
Except under 233.14 and 233.15, Priority Mail International shipments are charged postage for each addressed piece according to its weight and Price Group. See the Individual Country Listings for countries that offer Priority Mail International service.
Food supplements and foods for athletes may be sent to Turkiye only when a medical report, prescription, or national sportsperson`s certificate is enclosed with the item by the addressee.
2. Each commercial shipment for Turkiye must have enclosed a combined certificate of origin and consular invoice, which must be certified by a chamber of commerce or other trade organization or by a notary public, and be legalized by a Turkish consul.
2. Coins; banknotes; currency notes, including paper money; securities of any kind payable to bearer; traveler's checks; platinum, gold, and silver; precious stones; jewelry; watches; and other valuable articles are prohibited in Priority Mail Express International shipments to Turkiye.
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes exemptions from the requirement of a tolerance for residues of 2,6-pyridinedicarboxylic acid, also known as DPA (CAS Reg. No. 499-83-2), when used as an inert ingredient in antimicrobial pesticide formulations for use on food contact surfaces in public eating places, dairy processing equipment, and food processing equipment and utensils and when used in pesticide formulations applied pre- and post-harvest to crops with an end-use concentration not to exceed 2 parts per million (ppm). EcoLab Inc. submitted a petition to EPA under the Federal Food, Drug, and Cosmetic Act (FFDCA), requesting the establishment of such exemptions from the requirement of a tolerance. This regulation eliminates the need to establish a maximum permissible level for residues of DPA.
This regulation is effective November 23, 2022. Objections and requests for hearings must be received on or before January 23, 2023 and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2019-0601, is available at
Daniel Rosenblatt, Registration Division (7505T), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460-0001; main telephone number: (202) 566-1030; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Office of the Federal
Under FFDCA section 408(g), 21 U.S.C. 346a(g), any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2019-0601 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing and must be received by the Hearing Clerk on or before January 23, 2023. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2019-0601, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.
Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .”
EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no harm to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.
Consistent with FFDCA section 408(c)(2)(A), and the factors specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for DPA including exposure resulting from the exemption established by this action. EPA's assessment of exposures and risks associated with DPA follows.
EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by DPA as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in this unit.
The Agency assessed DPA via the Threshold of Toxicological Concern
TTC are derived from a conservative and rigorous approach developed by Munro and Kroes to establish generic threshold values for human exposure at which a very low probability of adverse effects is likely. There are three Cramer Classes that are organized by structural classes using the Cramer (1978) decision scheme. By comparing a range of compounds by Cramer Class (classes I, II, and III) and no-observed-effect-level (NOEL), fifth percentile NOELs were established for each Cramer Class as “Human Exposure Thresholds” assuming a 60 kg human. These values were 3, 0.91 and 0.15 mg/kg/day for classes I, II and III, respectively.
Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see
The human exposure threshold value for threshold (
1.
Dietary exposure (food and drinking water) may occur from the existing and proposed uses of DPA (
2.
DPA may be used as an inert ingredient in products that are registered for specific uses that may result in short-term and intermediate-term residential exposure, such as pesticides used in and around the home. The Agency conducted a conservative assessment of potential residential exposure by assessing DPA in pesticides in outdoor and indoor scenarios. The Agency's assessment of adult residential exposure combines high-end dermal and inhalation handler exposure from outdoor and indoor uses. The Agency's assessment of children's residential exposure includes total post-application exposures associated with total exposures to contact with both treated outdoor or indoor scenarios.
3.
EPA has not made a common mechanism of toxicity finding as to DPA and any other substances, and DPA does not appear to produce toxic metabolites produced by other substances. For the purposes of this tolerance action, therefore, EPA has not assumed that DPA has a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's website at
FFDCA Section 408(b)(2)(C) provides that EPA shall retain an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act (FQPA) Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor. The FQPA SF has been reduced to 1X for DPA because clear NOELs and LOELs were established in the studies analyzed by Munro
EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure
1.
2.
DPA is currently used as an inert ingredient in pesticide products that are registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures.
Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 1400 for both adult males and females. EPA has concluded the combined short-term aggregated food, water, and residential pesticide exposures result in an aggregate MOE of 530 for children. Because EPA's level of concern for DPA is a MOE of 100 or below, these MOEs are not of concern.
3.
4.
5.
6.
An analytical method is not required for enforcement purposes since the Agency is not establishing a numerical tolerance for DPA in or on any food commodities. EPA is establishing a limitation on the amount of DPA that may be used in pesticide formulations. This limitation will be enforced through the pesticide registration process under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”),
Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180.940(a) for 2,6-pyridinedicarboxylic acid, also known as DPA, (CAS Reg. No. 499-83-2) when used as an inert ingredient in antimicrobial pesticide formulations applied to food contact surfaces in public eating places, dairy processing equipment, and food processing equipment and utensils at an end-use concentration not to exceed 2 ppm, and under 40 CFR 180.910 when used as an inert ingredient (stabilizer) in pesticide formulations applied to growing crops or to raw agricultural commodities after harvest at a concentration not to exceed 2 ppm.
This action establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or Tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or Tribal Governments, on the relationship between the National Government and the States or Tribal Governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian Tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, for the reasons stated in the preamble, EPA is amending 40 CFR part 180 as follows:
21 U.S.C. 321(q), 346a and 371.
The addition reads as follows:
(a) * * *
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Final rule.
This final rule announces approval of, and implements management measures contained in, Amendment 20 to the Atlantic Surfclam and Ocean Quahog Fishery Management Plan. The Mid-Atlantic Fishery Management Council developed these measures to limit the amount of surfclam or ocean quahog individual transferable quota share or annual allocation in the form of cage tags that an individual or their family members are permitted to hold. These changes are intended to ensure the management plan is consistent with requirements of the Magnuson-Stevens Fishery
This rule is effective December 23, 2022.
Copies of Amendment 20, including the Environmental Assessment (EA), with its associated Finding of No Significant Impact (FONSI) are available on request from the Mid-Atlantic Fishery Management Council, 800 North State Street, Suite 201, Dover, DE 19901. These documents are also accessible via the internet at
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this final rule may be submitted to (enter office name) and to
Douglas Potts, Fishery Policy Analyst, 978-281-9341.
This final rule concurrently notifies the public of the approval of Amendment 20, also known as the Excessive Shares Amendment, to the Atlantic Surfclam and Ocean Quahog Fishery Management Plan (FMP) on behalf of the Secretary of Commerce, and implements the management measures contained in the Amendment. The Mid-Atlantic Fishery Management Council developed this amendment to establish limits to the amount of individual transferable quota (ITQ) share or cage tags such that any particular individual, corporation, or other entity cannot acquire an excessive share of such privileges, as required by the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), and to make administrative changes to improve the efficiency of the FMP. We published a notice of availability on August 10, 2022 (87 FR 48617), announcing a 60-day period for the public to review and provide written comments on whether we, acting on behalf of the Secretary of Commerce, should approve Amendment 20. This comment period ended on October 11, 2022. On August 24, 2022, we published a proposed rule (87 FR 51955) to implement the amendment and solicit written comments on the proposed rule for a 30-day period, which ended on September 23, 2022.
We reviewed all comments received during these comment periods, whether directed at our approval decision or the proposed regulations. See Comments and Responses section for more information. Now, on behalf of the Secretary of Commerce, we are announcing the approval of Amendment 20, and issuing this final rule implementing Amendment 20, consistent with the review and approval process outlined in section 304(a) of the Magnuson-Stevens Act. The full development history of this action was provided in the proposed rule and is not repeated here.
This action establishes separate caps for quota share and for annual cage tags for both the surfclam and ocean quahog ITQ programs. The amount of quota share that an individual or entity is permitted to have ownership in will be capped at 35 percent of the surfclam quota and 40 percent of the ocean quahog quota. Higher caps are established for cage tags in recognition that additional temporary consolidation through leasing or other transactions may be warranted within a fishing year to meet market demand because of the limited number of processors available. There is a limited market for fresh surfclams or ocean quahogs. The fisheries largely rely on a small number of processing plants to convert these species into final products or ingredients for other food companies. These plants operate by leasing cage tags from multiple quota shareholders and then providing those tags to harvesting vessels that deliver clams, as needed by the plants. The amount of annual cage tags that an individual or entity is permitted to have in a given year will be capped at 65 percent for surfclam and 70 percent for ocean quahog.
No person or entity currently exceeds the quota share cap implemented in this final rule, nor has any entity exceeded the cap on annual cage tags in recent years. The Council selected these cap limits to ensure that potential future consolidation does not reach the level of an excessive share of this fishery, and were not intended to restrict current quota share holdings. The proposed rule included a detailed description of how these caps would be monitored and enforced, including examples, and that information is not repeated here.
As part of this amendment, the Council must conduct a review of these ITQ ownership cap measures at least every 10 years, or sooner as needed. This review should include an evaluation of the effects and effectiveness of the caps in the fishery and whether the cap levels remain appropriate or should be adjusted.
This action sets the maximum duration of multi-year specifications to the number of years needed to align with the stock assessment schedule approved by the Northeast Region Coordinating Council (NRCC). The NRCC is composed of representatives from the Mid-Atlantic Fishery Management Council, the New England Fishery Management Council, the Atlantic States Marine Fisheries Commission, the NMFS Greater Atlantic Regional Fisheries Office, and the Northeast Fishery Science Center. One of its roles is to develop a schedule for fishery stock assessments that balances the needs of the numerous fisheries in the region with the available resources. The current schedule calls for an updated stock assessment every 4 years for surfclam and every 6 years for ocean quahog. These assessment intervals are the result of recent improvements to the methods used to survey these wild populations. Allowing specifications to be set for the full duration between assessments will allow the Council, Council staff, and NMFS staff to avoid spending time developing new specifications packages when no new information on the health of the stocks is available. The Council and its Scientific and Statistical Committee will continue the current practice of reviewing the specifications each year, and making mid-cycle adjustments if conditions and available information warrant changes.
A total of three comments were received on the proposed rule and notice of availability. All three comments were submitted by representatives of the surfclam fishing industry and supported all of the new measures as proposed.
There are no changes to the measures from the proposed rule.
Pursuant to section 304(b)(3) of the Magnuson-Stevens Act, the Assistant Administrator for Fisheries, NOAA, has determined that this final rule is consistent with Amendment 20, other provisions of the Magnuson-Stevens Act, and other applicable law.
This final rule has been determined to be not significant for purposes of Executive Order 12866.
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action will not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a final regulatory flexibility analysis was not required and none was prepared.
This final rule contains a collection-of-information requirement subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This rule revises the existing requirements for the collection of information 0648-0240 by removing the section of the ITQ Ownership form that requires identification of corporate officers and removing some of the “additional transaction details” questions from the ITQ transfer form. This information will not be used to define or monitor the excessive share caps and collecting the information is no longer be necessary. Removing these questions is not anticipated to change the number of respondents or responses and will not have a measurable reduction in burden hours or costs. An extension of the collection is also requested through this action. Public reporting burden for the ITQ ownership form is estimated to be 1 hour to complete for new entrants and 5 minutes to review a pre-filled form for renewing entities. The ITQ transfer form is estimated to take 5 minutes to complete. These estimates include the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
We invite the general public and other Federal agencies to comment on proposed and continuing information collections, which helps us assess the impact of our information collection requirements and minimize the public's reporting burden. Written comments and recommendations for this information collection should be submitted on the following website:
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.
Fisheries, Fishing, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, NMFS amends 50 CFR part 648 as follows:
16 U.S.C. 1801
(j) * * *
(3) * * *
(viii) Take action to circumvent an ITQ quota share cap or cage tag cap specified in 648.74(a)(2) or fail to take corrective action if such cap is exceeded inadvertently.
(a)
(1)
(b)
(a) * * *
(2)
(ii)
(iii)
(A) Any partial or shared ownership is counted as full ownership by each party for the purpose of monitoring these caps. For example, if two people share ownership of a business with quota share, the full amount of quota share held by the business counts toward the cap for both owners.
(B) Having an ownership interest includes, but is not limited to, persons who are shareholders in a corporation that holds an ITQ permit, who are partners (general or limited) to an ITQ permit holder, who are immediate family members of an ITQ permit holder, or who, in any way, partly own an entity that holds an ITQ permit.
(C) Immediate family members include individuals connected by the following relationships:
(
(
(
(
(
(D) The quota share and cage tag caps do not apply to a bank or other lender that holds ITQ quota share as collateral on a loan as described in paragraph (a)(1)(i)(C) of this section. The quota share held as collateral and the associated cage tags will be treated as if it is held by the borrower.
(E) Compliance with these ownership caps is based on the total amount of quota share or cage tags controlled throughout a fishing year. In this instance, control means the cumulative total amount of quota share or cage tags, including the amount held by the ITQ permit at the start of the fishing year plus any quota share or cage tags acquired by the ITQ permit throughout the fishing year. This measure of control during the fishing year is increased by acquiring quota share or cage tags from other ITQ permits, but is not reduced by any quota share or cage tags that are transferred to another ITQ permit.
(iv)
(b) * * *
(3)
Nuclear Regulatory Commission.
Petition for rulemaking; notice of docketing and request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has received a petition for rulemaking from Ralph O. Meyer dated August 1, 2022, requesting that the NRC revise its regulations regarding the licensing safety analysis for loss-of-coolant accidents. The petition was docketed by the NRC on October 11, 2022, and has been assigned Docket No. PRM-50-124. The NRC is examining the issues raised in PRM-50-124 to determine whether they should be considered in rulemaking. The NRC is requesting public comment on this petition at this time.
Submit comments by February 6, 2023. Comments received after this date will be considered if it is practical to do so, but the NRC is able to assure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal rulemaking website:
•
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Blake Purnell, U.S. Nuclear Regulatory Commission, Washington DC 20555-0001; telephone: 301-415-1380, email:
Please refer to Docket ID NRC-2022-0178 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
• NRC's PDR: You may examine and purchase copies of public documents, by appointment, at the NRC's PDR, Room P1 B35, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852. To make an appointment to visit the PDR, please send an email to
The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
The petition for rulemaking (PRM) was filed by Ralph O. Meyer. The PRM requests that the NRC revise its regulations at part 50 of title 10 of the
The letter from the petitioner states that the NRC's current rule “limits peak cladding temperature and maximum cladding oxidation” and “no longer ensures coolable geometry at higher fuel burnups” and includes an analysis and discussion of a proposed alternative. The petitioner requests the NRC to conduct rulemaking to implement criteria in 10 CFR 50.46 that would limit the number of fuel rod ruptures to 10 percent for large break LOCAs and to 1 percent for small break LOCAs, in lieu
The NRC has determined that the petition meets the sufficiency requirements for docketing a PRM under 10 CFR 2.803, “Petition for rulemaking-NRC action.” The NRC will examine the issues raised in PRM-50-124 and any comments received in response to this comment request to determine whether these issues should be considered in rulemaking. The public can monitor further action on the rulemaking that will address this petition by searching Docket ID NRC-2022-0178 on the Federal rulemaking website,
For the Nuclear Regulatory Commission.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to grant an exclusion from the list of hazardous wastes to WRB Refining LP (Petitioner) located in Borger, Texas. This action responds to a petition to exclude (or “delist”) up to 7,000 cubic yards per year of solids removed from four stormwater tanks from the list of federal hazardous wastes when disposed of in a Subtitle D Landfill. Resource Conservation Recovery Act (RCRA). The EPA is proposing to grant the petition based on an evaluation of waste-specific information provided by Petitioner.
Comments on this proposed exclusion must be received by December 23, 2022.
Submit your comments by one of the following methods:
•
•
You can view and copy the delisting petition and associated publicly available docket materials either through
Harry Shah, (214) 665-6457,
The EPA is proposing to grant a May 2020 petition (“Delisting Petition for Stormwater Solids”) request submitted by WRB Refining LP in Borger, Texas to exclude (or “delist”) up to 7,000 cubic yards per year of F037 stormwater solids from the list of federal hazardous waste set forth in 40 CFR 261.3 (hereinafter, all sectional references are to 40 CFR unless otherwise indicated). The Petitioner claims that the petitioned wastes do not meet the criteria for which the EPA listed it, and that there are no additional constituents or factors which could cause the waste to be hazardous. Based on our review described in Section III, we propose to approve the petition request, and allow the delisted waste to be disposed in a Subtitle D landfill. A copy of the May 2020 petition is located in the docket to this proposal action.
The EPA published an amended list of hazardous wastes from non-specific and specific sources on January 16, 1981, as part of its final and interim final regulations implementing section 3001 of RCRA. The EPA has amended this list several times and codifies the list in §§ 261.31 and 261.32.
The EPA lists the Petitioner's wastes as hazardous because: (1) the wastes typically and frequently exhibit one or more of the characteristics of hazardous wastes identified in Subpart C of part 261 (that is, ignitability, corrosivity, reactivity, and toxicity), (2) the wastes meet the criteria for listing contained in § 261.11(a)(2) or (a)(3), or (3) the wastes are mixed with or derived from the treatment, storage or disposal of such characteristic and listed wastes and which therefore become hazardous under § 261.3(a)(2)(iv) or (c)(2)(i), known as the “mixture” or “derived-from” rules, respectively.
Individual waste streams may vary, however, depending on raw materials, industrial processes, and other factors. Thus, while a waste described in these part 261 regulations or resulting from the operation of the mixture or derived-from rules generally is hazardous, a specific waste from an individual facility may not be hazardous.
For this reason, 40 CFR 260.20 and 260.22 provide an exclusion procedure, called delisting, which allows persons to prove that the EPA should not regulate a specific waste from a particular generating facility as a hazardous waste.
A delisting petition is a request from a facility to the EPA or an authorized state to exclude wastes from the list of hazardous wastes. The facility petitions the EPA because it does not consider the waste as hazardous under RCRA regulations.
In a delisting petition, the petitioner must show that wastes generated at a particular facility do not meet any of the criteria for which the waste was listed. The criteria for which the EPA lists a waste are in 40 CFR part 261 and further explained in the background documents for the listed waste in the June 30, 1992 publication of the “Final Best Demonstrated Available Technology (BDAT) Background Document for Newly Listed Refinery Wastes F037 and F038” (
In addition, under 40 CFR 260.22, a petitioner must prove that the waste does not exhibit any of the hazardous waste characteristics (that is, ignitability, reactivity, corrosivity, and toxicity) and must present sufficient information for EPA to decide whether factors other than those for which the waste was listed warrant retaining it as a hazardous waste.
Generators remain obligated under RCRA to confirm whether their waste remains non-hazardous based on the hazardous waste characteristics even if EPA has “delisted” the waste.
Besides considering the criteria in 40 CFR 260.22(a) and § 3001(f) of RCRA, 42 U.S.C. 6921(f), and in the background documents for the listed wastes, EPA must consider any factors (including additional constituents) aside from those for which EPA listed the waste, if a reasonable basis exists that these additional factors could cause the waste to be hazardous.
The EPA must also consider hazardous waste mixtures containing listed hazardous wastes and wastes derived from treating, storing, or disposing of listed hazardous waste. See § 261.3(a)(2)(iii and iv) and (c)(2)(i), called the “mixture” and “derived-from” rules, respectively. These wastes are also eligible for exclusion and remain hazardous wastes until excluded. See 66 FR 27266 (May 16, 2001).
To better meet EPA's “responsibilities related to the protection of public health and the environment, EPA has developed a new environmental justice (EJ) mapping and screening tool called EJ Screen” that reports values as a percentile when compared to a state or the nation. “It is based on nationally consistent data and an approach that combines environmental and demographic indicators in maps and reports,” (
EPA utilized EJ Screen to evaluate potential environmental justice concerns in communities at one-,& three-, and five-mile radiuses around the Borger facility. EPA considers the potential for EJ concerns in a community when one or more of the 12 EJ indices is at or above the 80th percentile when compared to the rest of the USA. At all three radial measurements, none of the 12 EJ indices exceeded the 80th percentile. However, six different individual block groups clustered south/southwest of the facility within the one-, three-, and five-mile radiuses exceeded the 80th percentile for one or more indices. This information is provided in Table 1. More information on EJ Screen, including an explanation of the 12 EJ indices can be found at
In May 2020, WRB Refining LP petitioned the EPA to exclude from the list of hazardous wastes contained in § 261.31, stormwater tank solids (F037) generated from its facility located in Borger, Texas. The waste falls under the classification of listed waste pursuant to §§ 261.31. Specifically, in its petition, WRB Refining requested that the EPA grant a standard exclusion for 7,000 cubic yards per year of the stormwater tank solids.
The principal products manufactured at the Refinery are gasoline, diesel, aviation fuel, natural gas liquids (NGL), petroleum coke, and solvents. The stormwater tanks are active and have been in operation for approximately 25 years. To restore capacity in the stormwater tanks, the Borger Refinery will be removing accumulated solids. The solids removal process will typically occur within a calendar year and will be an ongoing operational item for the refinery in the future.
The solids are removed from the four stormwater tanks. These tanks are listed as the North Stormwater Tank, West Stormwater Tank, North Dropout Basin, and West Grit Trap (hereafter collectively referred to as “the stormwater tanks”). The four stormwater tanks are identified as solid waste management unit (SWMU) No. 50 on the facility's notice of registration (NOR) with the Texas Commission on Environmental Quality (TCEQ).
The stormwater tanks solids originated from both historical and current operation of the wastewater treatment system at the refinery. To the extent possible, hydrocarbons present in refinery wastewaters have been recovered. However, historically more hydrocarbons passed through the “oil recovery system” and flowed into the stormwater tanks. Hydrocarbons in the wastewater can result from various sources (
Since the stormwater tanks receive what could be classified as dry-weather, oily flows as specified in the November 2, 1990,
A total of eight acceptable sample results were provided by Petitioner to support the petition. The EPA considered all 8 samples of the stormwater tank solids and the disposal scenario of the landfill was modeled using the Delisting Risk Assessment Software. The worst-case scenario of the constituents' concentrations for the F037 solids were used as input in the model to determine if it would meet the hazardous waste criteria for which it was listed. The maximum total and leachate concentrations for the inorganic and organic constituents which were found in the analytical data provided by Petitioner are presented in Table 2.
In reviewing this petition, we considered the original listing criteria and the additional factors required by the Hazardous and Solid Waste Amendments of 1984 (HSWA). See § 222 of HSWA, 42 U.S.C. 6921(f), and 40 CFR 260.22(d)(2) through (4). We evaluated the petitioned wastes against the listing criteria and factors cited in § 261.11(a)(2) and (3).
In addition to the criteria in 40 CFR 260.22(a), 261.11(a)(2) and (3), 42 U.S.C. 6921(f), and in the background documents for the listed wastes, the EPA also considered factors (including additional constituents) other than those for which EPA listed the waste if these additional factors could cause the waste to be hazardous (
Our proposed decision to grant the May 2020 petition to delist the waste from Petitioner's facility in Borger, Texas is based on our evaluation of the wastes for factors or criteria which could cause the waste to be hazardous. These factors included: (1) Whether the waste is considered acutely toxic; (2) the toxicity of the constituents; (3) the concentration of the constituents in the waste; (4) the tendency of the constituents to migrate and to bioaccumulate; (5) the persistence in the environment of any constituents once released from the waste; (6) plausible and specific types of management of the petitioned waste; (7) the quantity of waste produced; and (8) waste variability.
The EPA must also consider as hazardous wastes mixtures containing listed hazardous wastes and wastes derived from treating, storing, or disposing of listed hazardous waste. See 40 CFR 261.3(a)(2)(iv) and (c)(2)(i), called the “mixture” and “derived-from” rules, respectively. Mixture and derived-from wastes are also eligible for exclusion but remain hazardous until excluded.
For this proposed delisting determination, we evaluated the risk that the waste would be disposed of as a non-hazardous waste in a landfill. We considered transport of waste constituents through groundwater, surface water and air. We evaluated Petitioner's analysis of the petitioned waste using the Delisting Risk Assessment Software (DRAS) to predict the concentration of hazardous constituents that might be released from the petitioned waste and to determine if the waste would pose a threat to human health and the environment. The DRAS software and associated documentation can be found at
To predict the potential for release to groundwater from landfilled wastes and subsequent routes of exposure to a receptor, the DRAS uses dilution attenuation factors derived from the EPA's Composite Model for leachate migration with transformation products. From a release to groundwater, the DRAS considers routes of exposure to a human receptor through ingestion of contaminated groundwater, inhalation from groundwater while showering and dermal contact from groundwater while bathing.
From a release to surface water by erosion of waste from an open landfill into storm water run-off, DRAS evaluates the exposure to a human receptor by fish ingestion and ingestion of drinking water. From a release of waste particles and volatile emissions to air from the surface of an open landfill, DRAS considers routes of exposure of inhalation of volatile constituents, inhalation of particles, and air deposition of particles on residential soil and subsequent ingestion of the contaminated soil by a child. The technical support document and the user's guide to DRAS are available at
Petitioner stated in its petition that the petitioned waste meets the criteria of F037 for which the EPA listed it. Petitioner also stated that no additional constituents or factors could cause the waste to be hazardous. Petitioner also stated that disposal in a landfill will not adversely impact human health or the environment. The EPA's review of this petition included consideration of the original listing criteria, and the additional factors required by the Hazardous and Solid Waste Amendments of 1984 (HSWA). See section 3001(f) of RCRA, 42 U.S.C. 6921(f), and CFR 260.22 (d)(1)-(4). In making the initial delisting determination, the EPA evaluated the petitioned waste against the listing criteria and factors cited in § 261.11(a)(2) and (a)(3). Based on this review, the EPA agrees with the Petitioner that the petitioned waste is nonhazardous with respect to the original listing criteria. (If the EPA had found, based on this review, that the waste remained hazardous based on the factors for which the waste was originally listed, the EPA would propose to deny the petition.) The EPA evaluated the waste with respect to other factors or criteria to assess whether there is a reasonable basis to believe that such additional factors could cause the waste to be hazardous. The EPA considered whether the waste is acutely toxic, the concentration of the constituents in the waste, their tendency to migrate and to bioaccumulate, their persistence in the environment once released from the waste, plausible and specific types of management of the petitioned waste, the quantities of waste generated, and waste variability. The EPA believes that the petitioned waste does not meet the listing criteria and thus, should not be a listed waste. The EPA's proposed decision to delist the waste from Petitioner's facility is based on the information submitted in support of this rule, including descriptions of the wastes and analytical data from the Borger, Texas facility, and that is contained in the Petition and attachments, all of which are included in the docket to this action.
If the petitioned wastes are delisted as proposed, the Petitioner must dispose of them in a Subtitle D landfill which is permitted, licensed, or registered by a state to manage industrial waste or in the on-site landfill.
The EPA notes that in some instances the maximum allowable total constituent concentrations provided by the DRAS model exceed 100% of the waste—these DRAS results are an artifact of the risk calculations that do not have physical meaning. In instances where DRAS predicts a maximum constituent greater than 100 percent of the waste (that is, greater than 1,000,000 mg/kg or mg/L, respectively, for total and TCLP concentrations), the EPA is not proposing to require the Petitioner to perform sampling and analysis for that constituent and sampling type (total or TCLP).
The testing approach for this waste stream will be conducted as generated. Prior to disposal of any future tank cleanouts, Petitioner must conduct sampling and analysis as described in the delisting sampling and analysis plan and ensure that the wastes do not exceed the delisting parameters. If compliance with the delisting parameters is demonstrated with analytical testing (TCLP analysis), the Petitioner may dispose of the tank cleanouts. The annual amount of solids generated from the tank clean outs may not exceed 7,000 cubic yards. The annual sampling report shall include the volume of solids disposed of in the landfill, as well as annual testing event data. The petitioner should monitor and report increasing trends of constituents which will affect the overall compliance with the stormwater discharge permit.
The Petitioner must submit the data obtained through verification testing to U.S. EPA Region 6, Office of Land, Chemicals and Redevelopment Division, 1201 Elm Street, Suite 500, M/C 6LCR-RP, Dallas, Texas 75270-2102, within 30 days after receiving the final results from the laboratory. These results may be submitted electronically to Harry Shah,
If this Petitioner violates the terms and conditions established in the exclusion, the Agency may start procedures to withdraw the exclusion. Additionally, the terms of the exclusion provide that “[a]ny waste volume for which representative composite sampling does not reflect full compliance with the exclusion criteria must continue to be managed as hazardous.”
If the testing of the waste does not demonstrate compliance with the delisting concentrations described in section IV.C above, or other data (including but not limited to leachate data or groundwater monitoring data from the final land disposal facility) relevant to the delisted waste indicates that any constituent is at a concentration in waste above specified delisting verification concentrations in Table 1, the Petitioner must notify the Agency within 10 days, or such later date as the EPA may agree to in writing, after receiving the final verification testing results from the laboratory or of first possessing or being made aware of other relevant data. The EPA may require the Petitioner to conduct additional verification sampling to better define the particular volume of wastes within the affected unit that does not fully satisfy delisting criteria. For any volume of wastes for which the corresponding representative sample(s) do not reflect full compliance with delisting exclusion levels, the exclusion by its terms does not apply, and the waste must be managed as hazardous.
The EPA has the authority under RCRA and the Administrative Procedures Act, 5 U.S.C. 551 (1978
Any process changes or additions implemented at Petitioner's facility which would significantly impact the constituent concentrations of the waste must be reported to the EPA in accordance with Condition VI. of the exclusion language.
HSWA specifically requires the EPA to provide notice and an opportunity for public comment before granting or denying a final exclusion. Thus, the EPA will not make a final decision or grant an exclusion until it has addressed all timely public comments, including any at public hearings. Upon receipt and consideration of all comments, the EPA will publish its final determination as a final rule. Since this rule would reduce the existing requirements for
Because the EPA is proposing to issue this exclusion under the federal RCRA delisting regulations, only states subject to federal RCRA delisting provisions will be affected. This exclusion may not be effective in states which have received authorization from the EPA to make their own delisting decisions.
RCRA allows states to impose more stringent regulatory requirements than RCRA's under § 3009 of RCRA. These more stringent requirements may include a provision that prohibits a federally-issued exclusion from taking effect in the state. We urge Petitioners to contact the state regulatory authority to establish the status of its wastes under the state law.
The EPA has also authorized some states to administer a delisting program in place of the federal program, that is, to make state delisting decisions. Therefore, this exclusion does not apply in those states. If the Petitioner manages the wastes in any state with delisting authorization, the Petitioner must obtain delisting authorization or other determination from the receiving state before it can manage the waste as nonhazardous in that state.
Additional information about these statutes and Executive Orders can be found at
This proposed action is exempt from review by the Office of Management and Budget because it is a rule of particular applicability, not general applicability. The proposed action approves a delisting petition under RCRA for the petitioned waste at a particular facility.
This proposed action is not an Executive Order 13771 regulatory action because actions such as approval of delisting petitions under RCRA are exempted under Executive Order 13771
This proposed action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Because this rule is of particular applicability relating to a particular facility, it is not subject to the regulatory flexibility provision of the Regulatory Flexibility Act (5 U.S.C. 601
This proposed action does not contain any unfunded mandate as described in the Unfunded Mandates Reform Act (2 U.S.C. 1531-1538) and does not significantly or uniquely affect small governments. The action imposes no new enforceable duty on any state, local, or tribal governments or the private sector.
This proposed action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This proposed action does not have tribal implications as specified in Executive Order 13175. This proposed action applies only to a particular facility on non-tribal land. Thus, Executive Order 13175 does not apply to this action.
This proposed action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 13045 and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This proposed action's health and risk assessments using the Agency's Delisting Risk Assessment Software (DRAS), which considers health and safety risks to children, are described in section III.E above. The technical support document and the user's guide for DRAS are included in the docket.
This proposed action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 13211.
This proposed action does not involve technical standards as described by the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note).
Executive Order 12898 (59 FR 7629, Feb. 16, 1994) directs federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. The EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies,” (
The EPA believes that this proposed action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples. The EPA has determined that this proposed action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. The Agency's risk assessment, as described in section III.E above, did not identify risks from management of this material in an authorized, solid waste landfill (
This proposed action is exempt from the Congressional Review Act (5 U.S.C. 801
Environmental protection, Hazardous waste, Recycling, and Reporting and recordkeeping requirements.
For the reasons set out in the preamble, the EPA proposes to amend 40 CFR part 261 as follows:
42 U.S.C. 6905, 6912(a), 6921, 6922, 6924(y) and 6938.
Federal Communications Commission.
Proposed rule.
In this document, the Commission proposes requirements for Emergency Alert System (EAS) Participants to report compromises of their EAS equipment, communications systems, and services to the Commission. Additionally, this document proposes requirements for EAS Participants and Commercial Mobile Service (CMS) providers that participate in Wireless Emergency Alerts (WEA) to annually certify to having a cybersecurity risk management plan in place and to employ sufficient security measures to ensure the confidentiality, integrity, and availability of their respective alerting systems. This document also proposes requirements for participating CMS providers to take steps to ensure that only valid alerts are displayed on consumer devices. These requirements would further protect the nation's communications systems from cybersecurity threats. With this Notice of Proposed Rulemaking, the Commission seeks comment on the proposed rules and any suitable alternatives.
Comments are due on or before December 23, 2022 and reply comments are due on or before January 23, 2023.
You may submit comments, identified by PS Docket Nos. 15-94, 15-91, and 22-329, by any of the following methods:
•
•
Filings can be sent by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.
• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.
• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 45 L Street NE, Washington, DC 20554.
• Effective March 19, 2020, and until further notice, the Commission no longer accepts any hand or messenger delivered filings. This is a temporary measure taken to help protect the health and safety of individuals, and to mitigate the transmission of COVID-19.
For further information regarding Notice of Proposed Rulemaking, please contact James Wiley, Cybersecurity and Communications Reliability Division, Public Safety and Homeland Security Bureau, (202) 418-1678, or by email to
This is a summary of the Commission's Notice of Proposed Rulemaking (
This Notice of Proposed Rulemaking (
Comments should address: (a) whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission's burden estimates; (c) ways to enhance the quality, utility, and clarity of the information collected; (d) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology; and (e) way to further reduce the information collection burden on small business concerns with fewer than 25 employees. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we seek specific comment on how we might further reduce the information collection burden for small business concerns with fewer than 25 employees.
1. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in the
2. The
3. The
4. The proposed action is authorized pursuant to sections 1, 2, 4(i), 4(n), 301, 303(b), 303(g), 303(r), 303(v), 307, 309, 335, 403, 624(g), and 706 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(n), 301, 303(b), 303(g), 303(r), 303(v), 307, 309, 335, 403, 544(g), and 606; The Warning, Alert and Response Network (WARN) Act, WARN Act sections 602(a), (b), (c), (f), 603, 604, and 606, 47 U.S.C. 1202(a),(b),(c), (f), 1203, 1204 and 1206; the Wireless Communications and Public Safety Act of 1999, Pub. L. 106-81, 47 U.S.C. 615, 615a, 615b; Section 202 of the Twenty-First Century Communications and Video Accessibility Act of 2010, as amended, 47 U.S.C. 613.
5. The RFA directs agencies to provide a description of and, where feasible, an estimate of, the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).
6.
7. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 or less to delineate its annual electronic filing requirements for small exempt organizations. Nationwide, for tax year 2020, there were approximately 447,689 small exempt organizations in the U.S. reporting revenues of $50,000 or less according to the registration and tax data for exempt organizations available from the IRS.
8. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2017 Census of Governments indicate that there were 90,075 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 36,931 general purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,040 special purpose governments—independent school districts with enrollment populations of less than 50,000. Accordingly, based on the 2017 U.S. Census of Governments data, we estimate that at least 48,971 entities fall into the category of “small governmental jurisdictions.”
9.
10.
11. Based on Commission data as of November 2021, there were approximately 5,060 active licenses in the Broadband PCS service. The Commission's small business size standards with respect to Broadband PCS involve eligibility for bidding credits and installment payments in the auction of licenses for these services. In auctions for these licenses, the Commission defined “small business” as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” as an entity that, together with its affiliates and controlling interests, has had average annual gross revenues not exceeding $15 million for the preceding three years. Winning bidders claiming small business credits won Broadband PCS licenses in C, D, E, and F Blocks.
12. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small
13.
14. According to Commission data as of December 2021, there were approximately 4,211 active
15. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.
16.
17. The Commission's small business size standards with respect to WCS involve eligibility for bidding credits and installment payments in the auction of licenses for the various frequency bands included in WCS. When bidding credits are adopted for the auction of licenses in WCS frequency bands, such credits may be available to several types of small businesses based average gross revenues (small, very small and entrepreneur) pursuant to the competitive bidding rules adopted in conjunction with the requirements for the auction and/or as identified in the designated entities section in Part 27 of the Commission's rules for the specific WCS frequency bands.
18. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.
19.
20. According to Commission data as of December 2021, there were approximately 224 active 700 MHz Guard Band licenses. The Commission's small business size standards with respect to 700 MHz Guard Band licensees involve eligibility for bidding credits and installment payments in the auction of licenses. For the auction of these licenses, the Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. Pursuant to these definitions, five winning bidders claiming one of the small business status classifications won 26 licenses, and one winning bidder claiming small business won two licenses. None of the winning bidders claiming a small business status classification in these 700 MHz Guard Band license auctions had an active license as of December 2021.
21. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as
22.
23. According to Commission data as of December 2021, there were approximately 2,824 active Lower 700 MHz Band licenses. The Commission's small business size standards with respect to Lower 700 MHz Band licensees involve eligibility for bidding credits and installment payments in the auction of licenses. For auctions of Lower 700 MHz Band licenses the Commission adopted criteria for three groups of small businesses. A very small business was defined as an entity that, together with its affiliates and controlling interests, has average annual gross revenues not exceeding $15 million for the preceding three years, a small business was defined as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $40 million for the preceding three years, and an entrepreneur was defined as an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $3 million for the preceding three years. In auctions for Lower 700 MHz Band licenses seventy-two winning bidders claiming a small business classification won 329 licenses, twenty-six winning bidders claiming a small business classification won 214 licenses, and three winning bidders claiming a small business classification won all five auctioned licenses.
24. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.
25.
26. According to Commission data as of December 2021, there were approximately 152 active Upper 700 MHz Band licenses. The Commission's small business size standards with respect to Upper 700 MHz Band licensees involve eligibility for bidding credits and installment payments in the auction of licenses. For the auction of these licenses, the Commission defined a “small business” as an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years, and a “very small business” an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. Pursuant to these definitions, three winning bidders claiming very small business status won five of the twelve available licenses.
27. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.
28.
29. According to Commission data as December 2021, there were approximately 4,472 active AWS licenses. The Commission's small business size standards with respect to AWS involve eligibility for bidding credits and installment payments in the auction of licenses for these services. For the auction of AWS licenses, the Commission defined a “small business” as an entity with average annual gross revenues for the preceding three years not exceeding $40 million, and a “very small business” as an entity with average annual gross revenues for the preceding three years not exceeding $15 million. Pursuant to these definitions,
30. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.
31.
32. In light of the use of wireless frequencies by BRS and EBS services, the closest industry with a SBA small business size standard applicable to these services is Wireless Telecommunications Carriers (
33. According to Commission data as December 2021, there were approximately 5,869 active BRS and EBS licenses. The Commission's small business size standards with respect to BRS involves eligibility for bidding credits and installment payments in the auction of licenses for these services. For the auction of BRS licenses, the Commission adopted criteria for three groups of small businesses. A very small business is an entity that, together with its affiliates and controlling interests, has average annual gross revenues exceed $3 million and did not exceed $15 million for the preceding three years, a small business is an entity that, together with its affiliates and controlling interests, has average gross revenues exceed $15 million and did not exceed $40 million for the preceding three years, and an entrepreneur is an entity that, together with its affiliates and controlling interests, has average gross revenues not exceeding $3 million for the preceding three years. Of the ten winning bidders for BRS licenses, two bidders claiming the small business status won 4 licenses, one bidder claiming the very small business status won three licenses and two bidders claiming entrepreneur status won six licenses. One of the winning bidders claiming a small business status classification in the BRS license auction has an active licenses as of December 2021.
34. The Commission's small business size standards for EBS define a small business as an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $55 million for the preceding five (5) years, and a very small business is an entity that, together with its affiliates, its controlling interests and the affiliates of its controlling interests, has average gross revenues that are not more than $20 million for the preceding five (5) years. In frequency bands where licenses were subject to auction, the Commission notes that as a general matter, the number of winning bidders that qualify as small businesses at the close of an auction does not necessarily represent the number of small businesses currently in service. Further, the Commission does not generally track subsequent business size unless, in the context of assignments or transfers, unjust enrichment issues are implicated. Additionally, since the Commission does not collect data on the number of employees for licensees providing these services, at this time we are not able to estimate the number of licensees with active licenses that would qualify as small under the SBA's small business size standard.
35.
36. The SBA small business size standard for this industry classifies businesses having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms in this industry that operated for the entire year. Of this total, 2,964 firms operated with fewer than 250 employees. Thus, under this size standard, the majority of firms in this industry can be considered small. Additionally, according to Commission data as of December 2021, there were 4,477 active EBS licenses. The Commission estimates that the majority of these licenses are held by non-profit educational institutions and school districts and are likely small entities.
37.
38.
39.
40. The SBA small business size standards and U.S. Census Bureau data classify radio stations and television broadcasting separately and both categories may include both noncommercial and commercial stations. The SBA small business size standard for both radio stations and television broadcasting classify firms having $41.5 million or less in annual receipts as small. For Radio Stations, U.S. Census Bureau data for 2017 show that 1,879 of the 2,963 firms that operated during that year had revenue of less than $25 million per year. For Television Broadcasting, U.S. Census Bureau data for 2017 show that 657 of the 744 firms that operated for the entire year had revenue of less than $25,000,000. While the U.S. Census Bureau data does not indicate the number of non-commercial stations, we estimate that under the applicable SBA size standard the majority of noncommercial educational broadcast stations and public broadcast stations are small entities.
41. According to Commission data as of March 31, 2022, there were 4,503 licensed noncommercial educational radio and television stations. In addition, the Commission estimates as of March 31, 2022, there were 384 licensed noncommercial educational (NCE) television stations, 383 Class A TV stations, 1,840 LPTV stations and 3,231 TV translator stations. The Commission does not compile and otherwise does not have access to financial information for these stations that permit it to determine how many stations qualify as small entities under the SBA small business size standards. However, given the nature of these services, we will presume that all noncommercial educational and public broadcast stations qualify as small entities under the above SBA small business size standards.
42.
43. The Commission estimates that as of March 31, 2022, there were 4,508 licensed commercial AM radio stations and 6,763 licensed commercial FM radio stations, for a combined total of 11,271 commercial radio stations. Of this total, 11,269 stations (or 99.98%) had revenues of $41.5 million or less in 2021, according to Commission staff review of the BIA Kelsey Inc. Media Access Pro Database (BIA) on June 1, 2022, and therefore these licensees qualify as small entities under the SBA definition. In addition, the Commission estimates that as of March 31, 2022, there were 4,119 licensed noncommercial (NCE) FM radio stations, 2,049 low power FM (LPFM) stations, and 8,919 FM translators and boosters. The Commission however does not compile, and otherwise does not have access to financial information for these radio stations that would permit it to determine how many of these stations qualify as small entities under the SBA small business size standard. Nevertheless, given the SBA's large annual receipts threshold for this industry and the nature of these radio station licensees, we presume that all of these entities qualify as small entities under the above SBA small business size standard.
44. We note, however, that in assessing whether a business concern qualifies as “small” under the above definition, business (control) affiliations must be included. Our estimate, therefore, likely overstates the number of small entities that might be affected by our action, because the revenue figure on which it is based does not include or aggregate revenues from affiliated companies. In addition, another element of the definition of “small business” requires that an entity not be dominant in its field of operation. We are unable at this time to define or quantify the criteria that would establish whether a specific radio or television broadcast station is dominant in its field of operation. Accordingly, the estimate of small businesses to which the rules may apply does not exclude any radio or television station from the definition of a small business on this basis and is therefore possibly over-inclusive. An additional element of the definition of “small business” is that the entity must be independently owned and operated. Because it is difficult to assess these criteria in the context of media entities, the estimate of small businesses to which the rules may apply does not exclude any radio or television station from the definition of a small business on this basis and similarly may be over-inclusive.
45.
46.
47. The Commission estimates that as of March 31, 2022, there were 1,373 licensed commercial television stations. Of this total, 1,280 stations (or 93.2%) had revenues of $41.5 million or less in 2021, according to Commission staff review of the BIA Kelsey Inc. Media Access Pro Television Database (BIA) on June 1, 2022, and therefore these licensees qualify as small entities under the SBA definition. In addition, the Commission estimates as of March 31, 2022, there were 384 licensed noncommercial educational (NCE) television stations, 383 Class A TV stations, 1,840 LPTV stations and 3,231 TV translator stations. The Commission however does not compile, and otherwise does not have access to financial information for these television broadcast stations that would permit it to determine how many of these stations qualify as small entities under the SBA small business size standard. Nevertheless, given the SBA's large annual receipts threshold for this industry and the nature of these television station licensees, we presume that all of these entities qualify as small entities under the above SBA small business size standard.
48.
49.
50.
51.
52.
53.
54. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that 3,054 firms operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Based on this data, the majority of firms in this industry can be considered small under the SBA small business size standard. According to Commission data however, only two entities provide DBS service—DIRECTV (owned by AT&T) and DISH Network, which require a great deal of capital for operation. DIRECTV and DISH Network both exceed the SBA size standard for classification as a small business. Therefore, we must conclude based on internally developed Commission data, in general DBS service is provided only by large firms.
55. We expect the actions proposed in the
56. In assessing the cost of compliance with our proposed rule to create a cybersecurity risk management plan, we estimate the cost for each small EAS Participant and each Participating CMS Providers to be approximately $820. These costs are based on 10 hours of labor at $82 an hour and apply to all EAS Participants and Participating CMS Providers not just small entities. We anticipate however, that many small EAS Participants and Participating CMS Providers will not require 10 hours to develop or update a cybersecurity risk management plan tailored to the size of their organization. The cost for reporting an unauthorized access incident we believe would be similar to the cost of reporting a false alert, which the Commission has estimated to have a total cost of $11,600 per year across 290 EAS Participants. This total cost when apportioned to each EAS Participant comes out to approximately $40 per EAS Participant.
57. We estimate a $9.2 million one-time cost for all Participating CMS Providers, not just small providers, to update the WEA standards and software necessary to comply with our proposed rule that Participating CMS Providers transmit sufficient authentication information to allow mobile devices to present WEA alerts only if they come from valid base stations. This figure consists of approximately a $500,000 cost to update applicable WEA standards and approximately an $8.7 million cost to update applicable software. We quantify the cost of modifying standards as the annual compensation for 30 network engineers compensated at the national average for their field ($85,816/year; $41.26/hour), plus annual benefits ($26,775/year; 12.87/hour) working for the amount of time that it takes to develop a standard (one hour every other week for one year, 26 hours) for 12 distinct standards. We quantify the cost of modifying software as the annual compensation for a software engineer compensated at the national average for their field ($86,998/year), plus annual benefits ($27,143/year) working for the amount of time that it takes to develop software (one year) at each of the 76 CMS Providers that participate in WEA.
58. At this time the Commission cannot quantify the cost of compliance for small entities to comply with the other proposals or approaches on which it seeks comment in the
59. The RFA requires an agency to describe any significant, specifically small business alternatives that it has considered in reaching its proposed approach, which may include (among others) the following four alternatives: (1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for such small entities; (3) the use of performance, rather than design, standards; and (4) and exemption from
60. The Commission has taken steps to minimize the impact of the proposals in the
61. To further the Commission's objectives to promote EAS equipment operational readiness, in the
62. We seek comment on whether a compliance timeframe of 30 days from publication in the
63. Our approach to improving awareness of unauthorized access to EAS equipment, communications systems, and services relies on our belief that significant public safety benefits will accrue if EAS Participants were required to provide the Commission with notification that their EAS equipment, communications systems, and services have been accessed without authorization, even in the absence of a subsequent transmission of a false alert. The reporting requirement we proposed in the
64. The requirement for EAS Participants to report any incident of unauthorized access of its EAS equipment, communications systems, or services would be effective 60 days from publication in the
65. To further explore the impact of the cybersecurity risk management plan requirement proposed in the
66. The Commission also proposes to require that each plan include security controls sufficient to ensure the confidentiality, integrity, and availability (CIA) of the EAS. While we believe there are numerous methods to satisfy this aspect of the requirement, we have proposed to allow the requirement to be satisfied by providing evidence of the successful implementation of an established set of cybersecurity best practices, such as applicable Center for internet Security (CIS) Critical Security Controls or the Cybersecurity & Infrastructure Security Agency (CISA) Cybersecurity Baseline. We believe adopting this flexible approach will allow EAS Participants and Participating CMS Providers to develop a plan that is appropriate for their organization's size and available resources, while still ensuring that the plan results in ongoing and material improvements in EAS and WEA security. The Commission anticipates that this flexibility will reduce the costs imposed on small business EAS Participants and Participating CMS Providers, which will have different cybersecurity needs than larger EAS Participants and Participating CMS Providers, respectively. We do note, however, that to ensure that every EAS
67. The Commission proposes to require compliance with the requirement to implement a cybersecurity risk management plan and certification within twelve months of the publication in the
68. In the
69. The Commission expects to more fully consider the economic impact and alternatives for small entities following the review of comments filed in response to the
70. None.
71. We observe that, according to the Bureau's last nationwide EAS test report, an appreciable number of EAS Participants were unable to participate in testing due to equipment failure—despite advance notice that such test was to take place—suggesting that equipment failures are not addressed by EAS Participants as swiftly as reasonably possible and that more needs to be done to improve EAS operational readiness. Today, EAS Participants may continue operations for a period of 60 days despite having defective equipment that preclude their participation in EAS. We seek comment on whether this approach is effective at ensuring the operational readiness of EAS. How frequently does EAS equipment encounter defects that prevent it from receiving or retransmitting alerts? What are the most common types of defects that are experienced? What steps are necessary to repair these defects, and how often do they typically take to repair? Do EAS Participants take prompt steps to repair their EAS equipment, or do they typically take several days or weeks before seeking repairs? Do other EAS stakeholders, such as alert originators, have concerns about equipment failures preventing the transmission of emergency alerts to the public? We encourage commenters to highlight any specific incidences in which an EAS equipment defect prevented members of the public from being alerted to an emergency.
72. We seek comment on how to better promote the operational readiness of EAS equipment. For example, instead of requiring repairs within 60 days, would it serve the public interest to require EAS Participants to conduct repairs promptly and with reasonable diligence? Are all EAS Participants already doing so? If so, what are the reasons why some EAS Participants are not able to conduct repairs promptly and diligently? What factors should we consider when determining whether repairs are made promptly and with reasonable diligence? What barriers prevent equipment from being repaired promptly and what steps can we take to remove those barriers?
73. Would it improve EAS operational readiness and public safety in general to increase the situational awareness of the Commission, alert originators, and others about the occurrence of equipment defects that might prevent alerts from reaching the public? For example, would such an approach allow us to better enforce our operational readiness rules and identify persistent technical problems, and make contingency plans for alert delivery? If so, should we adopt an EAS equipment defect notification requirement? For example, should we require EAS Participants to report EAS equipment defects and submit a follow-up notification when the equipment is repaired? Within what timeframe should they perform that notification to ensure that stakeholders are aware of possible impacts on EAS (
74. We seek comment on any measures that the Commission could take to reduce burdens on EAS Participants if it were to take further
75. Section 11.45(b) of the Commission's rules requires that an EAS Participant notify the Commission by email within 24 hours of its discovery that it has transmitted or otherwise sent a false alert to the public, including details concerning the event. We believe that it would be in the public interest to strengthen this rule in view of the increasing threats that cyber attacks pose to EAS networks and equipment. Accordingly, we propose to revise this rule to further require that an EAS Participant report any incident of unauthorized access of its EAS equipment (
76. We observe that protecting EAS equipment alone is unlikely to be sufficient to protect the EAS from a cyber attack. Even without directly accessing an EAS Participant's EAS equipment, a bad actor could send a false alert or prevent a legitimate alert with lifesaving information from reaching the public by gaining unauthorized access to EAS Participants' communications systems and services. For this reason, we also propose to require that an EAS Participant report any incident of unauthorized access to any aspects of an EAS Participant's communications systems and services that potentially could affect their provision of EAS. This would include infrastructure that serves to prevent unauthorized access to EAS equipment, including firewalls and Virtual Private Networks. We seek comment on this proposal and on any suitable alternatives.
77. We believe the proposed rule is justified in light of the instances of false EAS alerts in recent years, caused by compromised EAS equipment being used to transmit a false message. As recounted above, we are aware of several situations in the past decade in which bad actors were either capable of obtaining, or actually obtained unauthorized access to EAS equipment. We seek comment on these views. Are there any other past or present security incidents involving EAS about which the Commission should be aware? Does unauthorized access to EAS equipment provide bad actors with the ability to disrupt EAS Participants' regularly scheduled programming, which has the potential to inflict financial harm in relation to their advertisers and reputational harm with their audiences? Are there any other kinds of harms resulting from unauthorized access to EAS equipment that the Commission should consider?
78. We believe significant public safety benefits would accrue if EAS Participants were required to provide the Commission with notification that their EAS equipment, communications systems, or services have been accessed without authorization, even in the absence of a subsequent transmission of a false alert. This view is based on our observation that, after a system is compromised, many attackers will position themselves to attack connected systems in several different ways. For example, we have observed that it is characteristic of some cyber attacks that an attacker will start by compromising one device and then, prior to launching a specific attack, spend time and effort to identify and compromise other devices in the network, potentially using the initially comprised device as an access point to other devices. The Commission could use the proposed notifications to work with providers and other government agencies to resolve an equipment compromise before the compromise is actually exploited to cause false EAS transmissions in at least some instances. We further believe that the Commission could leverage information on the frequency and nature of equipment compromise to better understand the prevalence and trends associated such attacks across the nation. The Commission and its government partners would thus be better apprised of the risks posed to EAS and in a position to use this information to inform further measures that might be necessary to secure EAS.
79. We seek comment on these views, including detailed information as to the associated costs and benefits of the proposed approach. For example, what would be a reasonable estimate of the financial harm that such a cyber attack would inflict upon an EAS Participant, and how should such estimates be calculated? We believe the cost of reporting an unauthorized access incident would tend to be similar to the cost of reporting a false alert, which the Commission has estimated to have a total cost of $11,600 per year across all EAS Participants. We seek comment on that estimate. Are EAS Participants already conducting investigations and gathering information about suspected incidents of unauthorized access to EAS equipment, communications systems, and services? Are there less costly alternatives to an unauthorized access reporting requirement that would achieve similar or greater benefits? We believe that the marginal costs of an unauthorized access reporting requirement are likely to be low, as the requirement parallels the requirements of an upcoming CISA rulemaking. Specifically, CISA is required by the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA) to adopt rules requiring critical infrastructure sector entities to report cyber incidents, but allows the requirement to be satisfied by reporting substantially similar information to another federal agency in a similar timeframe. We seek comment on that belief.
80. We propose to define “unauthorized access” to EAS equipment, communications systems, and services for the purposes of today's proposal to refer to any incident involving either remote or local access to EAS equipment, communications systems, or services by an individual or other entity that either does not have permission to access the equipment or exceeds their authorized access. We seek comment on this definition. For example, does this proposed definition mirror the methods that have been, and are likely to be, used by cyber-attackers to infiltrate EAS? We seek comment on whether it is appropriate to require that
81. We seek comment on the kinds of information that should be included in reports of unauthorized access. We propose that reports include, to the extent it is applicable and available at the time of reporting, the date range of the incident, a description of the unauthorized access, the impact to the EAS Participant's EAS operational readiness, a description of the vulnerabilities exploited and the techniques used to access the device, identifying information for each actor responsible for the incident, and contact information for the EAS Participant. We believe this information is necessary to understand the unauthorized access incident, resolve it before the compromise is actually exploited to send a false alert, and harmonize our requirements with those of other federal agencies. We seek comment on the proposed content of these reports and whether it should be modified. We propose that the contents of these reports be treated as presumptively confidential and only shared on a confidential basis with other Federal agencies and state government agencies that agree to protect them to the same extent and in the same manner as the Commission would and, to the extent that the policies or regulations of those agencies are stricter, to the same extent and in the same manner as they would if they had collected the information themselves. We also propose to allow disclosure by the Commission, or by parties with whom the Commission has shared the notifications, of anonymized information about breaches that might be useful for industry, security researchers, policymakers, and the general public. We seek comment on this approach to cyber incident information sharing.
82. We seek comment on how these reports should be submitted to the Commission. Should they be submitted to the FCC Operation Center by email, in similar fashion to the false alert reports that EAS Participants are already required to file with the Commission? Should these reports be submitted in NORS to better capture the required contents in clearly defined fields and more easily facilitate sharing with federal partners? Or should we develop a new electronic database to collect the content of the reports? Are there other approaches we should consider? What are the costs and benefits associated with each approach? We seek comment on whether Participating CMS Providers should also be required to report incidents of unauthorized access to their WEA systems, or services. Similar to EAS, we believe that such a requirement would allow the Commission and its government partners to better identify and evaluate risks posed to EAS and inform further measures that might be necessary to secure WEA. Should reports be required in the same timeframe and with the same content as proposed for EAS? Are there any differences between EAS and WEA that would warrant differing unauthorized access reporting requirements for WEA? If so, what are those differences and how should the requirements be modified to reflect them?
83. As discussed above, the EAS has faced cybersecurity risks for more than a decade, with PSHSB regularly advising EAS Participants to follow cybersecurity best practices and take other steps to improve their cybersecurity posture. Despite these admonitions, however, we have not observed meaningful security improvements. For example, PSHSB has frequently advised EAS Participants to update their EAS software to ensure that they have installed the most recent security patches, including one such round of outreach in 2020 after the discovery that certain EAS equipment was potentially vulnerable to IP-based attacks. However, in filings related to the Nationwide EAS Test in August 2021, the Bureau observed that more than 5,000 EAS Participants were using outdated software or using equipment that no longer supported regular software updates. In light of these failures, we believe the Commission should take action to ensure the security of EAS.
84. We propose to require EAS Participants to submit an annual certification attesting that they have created, updated, and implemented a cybersecurity risk management plan. The cybersecurity risk management plan would describe how the EAS Participant employs their organizational resources and processes to ensure the confidentiality, integrity, and availability of the EAS. The plan must discuss how the EAS Participant identifies the cyber risks that they face, the controls they use to mitigate those risks, and how they ensure that these controls are applied effectively to their operations. We believe that this certification requirement would improve the overall security of EAS by ensuring that EAS Participants are regularly taking steps to address security threats as part of their organization's day-to-day strategic and operational planning. We also believe the creation and implementation of cybersecurity risk management plans would help to ensure EAS operational readiness and eliminate false alerts, which divert public safety and other government resources from other important activities, impose costs on EAS Participants that have to deal with many of the consequences and, ultimately, desensitize the public to legitimate alerts. We seek comment on this proposal. Do stakeholders agree this proposal would improve the security of the EAS? Are there other benefits that may accrue from the creation and implementation of cybersecurity risk management plans by EAS Participants? Is an annual certification the right frequency with which to file certifications, or are there circumstances
85. We propose to afford each EAS Participant flexibility to structure its plan in a manner that is tailored to its organization, provided that the plan demonstrate that the EAS Participant is taking affirmative steps to analyze security risks and improve its security posture. While we believe there are many ways for EAS Participants to satisfy this requirement, we propose that EAS Participants can successfully demonstrate that they have satisfied this requirement by structuring their plans to follow an established risk management framework, such as the National Institute of Standards and Technology (NIST) Risk Management Framework or the NIST Cybersecurity Framework. We believe this flexible approach would allow EAS Participants to develop a plan that is appropriate for their organization's size and available resources, while still ensuring that the plan results in ongoing and material improvements in EAS security. We also anticipate that this requirement would reduce the costs imposed on smaller EAS Participants, which may have different cybersecurity needs than larger EAS Participants. We seek comment on this proposal. Alternatively, should we require EAS Participants to structure their plans to follow the NIST Risk Management Framework or the NIST Cybersecurity Framework? If so, should we require EAS Participants to follow the current version of each framework (
86. We propose that each cybersecurity risk management framework include security controls sufficient to ensure the confidentiality, integrity, and availability (CIA) of the EAS. We expect that reasonable security measures will include measures that are commonly the subject of best practices. While we believe there are potentially many ways for EAS Participants to satisfy this aspect of the requirement, we propose that EAS Participants will have satisfied it if they demonstrate they have successfully implemented an established set of cybersecurity best practices, such as applicable CIS Critical Security Controls or the CISA Cybersecurity Baseline. To ensure that every EAS Participant implements a baseline of security controls, however, we propose to require that each plan include security measures that address changing default passwords prior to operation, installing security updates in a timely manner, securing equipment behind properly configured firewalls or using other segmentation practices, requiring multifactor authentication where applicable, addressing the replacement of end-of-life equipment, and wiping, clearing, or encrypting user information before disposing of old devices. We expect that compliant cybersecurity risk management plans will not be limited to only these specific measures, as plans will vary based on individual providers' needs and circumstances and will need regular updates to keep up with an evolving threat environment. We seek comment on these proposed rules. Are there other specific security measures that we should require EAS Participants to implement? For example, should we require EAS Participants to conduct network security audits or vulnerability assessments to identify potential security vulnerabilities? If so, how often should they be conducted? Should we require EAS Participants to report to the Commission when their network audits, network vulnerability assessments, or penetration testing reports reveal critical vulnerabilities? If so, how should we define a “critical vulnerability” for this purpose? Should we require EAS Participants to implement Incident Response Plans that describe how the procedures that EAS Participants would follow when respond to an ongoing cybersecurity incident? Should we require EAS Participants to conduct cybersecurity training for their employees or contractors and if so, what should the contents of that training be? What kinds of security measures have EAS Participants already implemented to protect the EAS, and how effective are they at mitigating cybersecurity risks? Should we require EAS Participants to keep records that demonstrate how they have implemented each of the baseline security controls? If so, what specific types of information should the records include and for how long should they be kept? Have EAS Participants identified unsuccessful attempts to access their systems, and if so, what specific security measures best thwarted those attempts?
87. Does this approach strike the appropriate balance between improving EAS security, complementing EAS Participants' existing cybersecurity activities, and reducing burdens on small EAS Participants? If not, how should this requirement be modified to achieve that balance? We seek comment on whether this approach grants too much flexibility and will not result in improvements to EAS security. We also seek comment on alternative approaches that would be effective at improving EAS security. For example, should we require EAS Participants to address a specified list of cybersecurity subject matters in their risk management plans? Instead of requiring the use of a risk management plan, should we require EAS Participants to take specific steps to secure their EAS equipment? If so, could such a requirement be drafted in a way to encourage EAS Participants to continually examine and improve their cybersecurity posture, rather than merely check items off a list? Is our proposed certification requirement too burdensome on small EAS Participants? If so, what would be a more cost-effective way to promote EAS security for small EAS Participants?
88. We observe that protecting EAS equipment alone is unlikely to be sufficient to protect the EAS from a cyber attack. In addition to the risk of a bad actor sending a false alert, a bad actor could attack other elements of an EAS Participant's systems or service as a way to prevent a legitimate alert with lifesaving information from reaching the public. For this reason, we propose to require that the cybersecurity risk management plan address not only the security of EAS equipment, but also the security of all aspects of an EAS Participant's communications systems and services that potentially could affect their provision of EAS. We seek comment on this requirement. Are there alternative requirements that we should consider to ensure that bad actors cannot prevent the transmission of legitimate alerts (or engage in the transmission of false ones)?
89. We seek comment on whether there are industry groups, cybersecurity organizations, or other organizations that may be positioned to help EAS Participants create, implement, and maintain their cybersecurity risk management plan. What kinds of resources do these organizations offer, and how can EAS Participants make use of them? For example, are there organizations that offer, or that would be able to begin offering, authoritative sources of cybersecurity information and expertise? Are there organizations that can support EAS Participants by offering cybersecurity training, risk management plan templates, or otherwise promote the cybersecurity? If so, to what extent can these
90. We propose that EAS Participants certify to creating, annually updating, and implementing a cybersecurity risk management plan by checking a box as part of its annual filing of EAS Test Reporting System Form One. We seek comment on whether this is the most efficient way to implement a certification requirement for EAS Participants. If not, how should the certification be implemented? While the Commission does not intend to review each individual plan for sufficiency, we propose that the cybersecurity risk management plan be made available to the Commission upon request so that the Commission may review a specific plan as needed or proactively review a sample of EAS Participants' plans to ensure that they are sufficient to ensure the confidentiality, integrity, and availability of the EAS. In such circumstances, cybersecurity risk management plans would be treated as presumptively confidential. We propose to delegate to the Bureau the authority to request review of such cybersecurity risk management plans and to evaluate them for sufficiency. We seek comment on this approach to evaluating plans. For how long we should require EAS Participants to retain prior versions of their cybersecurity risk management plans to enable the Bureau's review?
91. We propose that the filing of, and subsequent compliance with, a cybersecurity risk management plan would not serve as a safe harbor or excuse or any other diminishment of responsibility for negligent security practices. We believe that allowing the filing of and compliance with a plan to have such an effect could create a perverse incentive. EAS Participants must remain constantly vigilant in preventing intrusions and can only satisfy that responsibility by acting reasonably in all circumstances. Any negligence in protecting the confidentially, integrity, and availability of EAS that results in transmission of false alerts or non-transmission of valid EAS messages would establish a violation of that duty, regardless of the content of the plan. Furthermore, we propose that an EAS Participant's failure to sufficiently develop or implement their plan, would be treated as a violation of the proposed rules. We seek comment on the criteria or indicia that we should consider when determining whether a plan is insufficient to mitigate cyber risk. We also seek comment on any measures that the Commission should take to verify whether EAS Participants have implemented of their plans.
92. We believe that the benefits of this proposal outweigh the costs. While we believe that it is impossible to quantify the precise dollar value of improvements to the public's safety, life, and health, as a general matter, we nonetheless believe that very substantial public safety benefits will result from the rules we propose today: EAS will be better able to ensure that real alerts with lifesaving information are successfully delivered to the public and false alerts are prevented in order to preserve public trust and better ensure that the public takes appropriate action during real emergencies. As a consequence, we anticipate that the rule changes we adopt today will yield substantial life-saving benefits. Independent of that analysis, the Commission has previously found that “a foreign adversary's access to American communications networks could result in hostile actions to disrupt and surveil our communications networks, impacting our nation's economy generally and online commerce specifically, and result in the breach of confidential data.” Consistent with the Commission's past analysis, our national gross domestic product was nearly $23 trillion last year, adjusting for inflation. Accordingly, if creating and implementing a cybersecurity risk management plan prevents even a 0.005% disruption to our economy, we believe our proposed requirement would generate $1.15 billion in benefits. Likewise, the digital economy accounted for $3.31 trillion of our economy in 2020, and so we believe preventing a disruption of even 0.05% would produce benefits of $1.66 billion. As a check on our analysis, consider the impact of existing malicious cyber activity on the U.S. economy: $57 billion to $109 billion in 2016. Given the incentives and documented actions of hostile nation-state actors, reducing this activity (or preventing an expansion of such damage) by even 1% would produce benefits of $0.57 billion to $1.09 billion. Given this analysis, we believe the benefits of our rule to the American economy, commerce, and consumers are likely to significantly and substantially outweigh the costs of the proposed certification requirement. We seek comment on this analysis. Is there a more appropriate way to quantify these benefits? Are there any additional ways in which the proposed rules would benefit the public that the Commission should consider?
93. We estimate that the overall cost of our proposed cybersecurity risk management plan requirement will be approximately $21 million. We believe that EAS Participants will, on average, require 10 hours annually to initially draft a plan and then update the plan and submit their certification annually. When developing this average we anticipate that many large EAS Participants already have cybersecurity risk management plans and will incur only
94. We propose to require Participating CMS Providers to certify that they are creating, annually updating, and implementing a cybersecurity risk management plan. As discussed above, WEA also faces security risks related to the transmission of false alerts and compromise of a Participating CMS Providers' systems could disrupt the transmission of a legitimate WEA message. Are there additional cybersecurity risks to WEA about which we should be aware? To what extent do Participating CMS Providers already have cybersecurity risk management plans? We believe that the approach we propose above in the context of EAS—wherein we would afford flexibility for providers to assess what content should be in their cybersecurity risk management plans while proposing that it demonstrate how the provider identifies the cyber risks that they face, the controls they use to mitigate those risks, and how they ensure that these controls are applied effectively to their operations—lends itself to WEA as well. We seek comment on this tentative conclusion. Are there any fundamental differences in the transmission of WEA alerts or the threats that WEA faces that would require a different approach to ensuring WEA's security? We seek comment on the least burdensome means by which Participating CMS Providers could submit their certification to the Commission, including via the Commission's Electronic Comment Filing System, a designated Commission email address, or a WEA-specific database designed for this purpose.
95. As with the EAS, we propose that a cybersecurity risk management plan
96. We believe that the benefits of this proposal for WEA outweighs the costs. As discussed above for EAS, we believe that the rules we propose today would better ensure that real WEA alerts with lifesaving information are successfully delivered to the public and false alerts are prevented in order to preserve public trust and better ensure that the public takes appropriate action during real emergencies. We estimate that the overall cost of our proposed cybersecurity risk management plan requirement will be approximately $62,320. We anticipate that many large Participating CMS Providers already have cybersecurity risk management plans and will incur only
97. We seek comment on whether there are other categories of communications service providers (
98. False alerts, such as the false ballistic missile alert that the Hawaii Emergency Management Agency accidentally sent during a training exercise in 2018, can cause panic, confusion, and damage the credibility of WEA. While that false alert was sent accidentally, bad actors could potentially exploit known WEA vulnerabilities to intentionally send false alerts to the public. The Commission's rules require Participating CMS Providers' network infrastructure to authenticate interactions with mobile devices and require mobile devices to authenticate interactions with CMS Provider infrastructure. In practice, however, the security handshake between Participating CMS Providers and mobile devices does not include a process for mobile devices to ensure that the base station to which it attaches is valid. As a result, mobile devices that are not actively engaged with a valid base station are vulnerable to receiving and presenting false alerts. This threat exists when a mobile device attempts authentication with the provider, switches base stations, or returns to active from idle mode.
99. Accordingly, we propose to require Participating CMS Providers transmit sufficient authentication information to allow mobile devices to present WEA alerts only if they come from valid base stations. Ongoing work in international standards bodies suggests that Participating CMS Providers could achieve this outcome by transmitting sufficient authentication information to allow mobile devices to authenticate either the alert or the base station itself. For example, Participating CMS Providers could provide for authentication of the base station using a unique identifier or an encryption key. To what extent do Participating CMS Providers already uniquely identify legitimate base stations with a selection of base station characteristics to defend against denial-of-service attacks and fraud (
100. We seek comment on the trade-offs attendant to available technological approaches to protecting the public from false alerts. Could implementation of these approaches affect the ability of non-service initialized WEA-capable mobile devices, SIM-less WEA-capable mobile devices, or mobile devices that are no longer contractually associated with a CMS Provider to receive WEA alerts depending on the handset technology or generation of wireless network used? If so, how could the
101. We estimate that Participating CMS Providers would incur a $14.5 million one-time cost to update the WEA standards and software necessary to comply with this requirement. This figure consists of approximately a $814,000 cost to update applicable WEA standards and approximately a $13.7 million cost to update applicable software. We quantify the cost of modifying standards as the annual compensation for 30 network engineers compensated at the national average for their field ($120,650/year; $58/hour), plus annual benefits ($60,325/year; 29/hour) working for the amount of time that it takes to develop a standard (one hour every other week for one year, 26 hours) for 12 distinct standards. We quantify the cost of modifying software as the annual compensation for a software developer compensated at the national average for their field ($120,990/year), plus annual benefits ($60,495/year) working for the amount of time that it takes to develop software (one year) at each of the 76 CMS Providers that participate in WEA. We seek comment on these cost estimates and the underlying cost methodology we are using. We also seek comment on any other costs and benefits that would result from this proposal. Incidents of false WEA alerts can cause significant confusion and diminish the public's trust in emergency alerts. For example, what harms could arise if an invalid base station sends a false alert to attendees to a public event, such as a parade or sporting event? For each technological approach considered, we urge commenters to address its effectiveness and cost of implementation, any additional latency that the measure could introduce into the delivery of WEA alerts, and the potential for the security measure to result in the suppression of legitimate alert content.
102. Pursuant to the WARN Act, CMS Providers' participation in WEA is voluntary, but CMS Providers that elect to participate in WEA must comply with all the WEA rules. The WEA rules provide that WEA functionality, both in Participating CMS Providers' networks and in mobile devices, “are dependent upon the capabilities of the delivery technologies implemented by a Participating CMS Provider” and certain WEA protocols “are defined and controlled by each Participating CMS Provider.” The inclusion of these statements may create the mistaken impression that Participating CMS Providers' compliance with the rules that follow, including the base station authentication rules we propose today, would be conditioned on the Participating CMS Providers' delivery technology. Emergency management agencies expect WEA to work as intended and when needed, and this language unintentionally could create uncertainties about the quality of WEA service that Participating CMS Providers offer. For these reasons, the Commission proposed to remove this language from the WEA rules in 2016. T-Mobile, ATIS, and CTIA, the only three commenters addressing this proposal, urged the Commission not to adopt it because “the rules should maximize the technological flexibility of CMS Providers participating in WEA.” In the ten years since WEA's deployment, however, Participating CMS Providers have coalesced around cell broadcast as the wireless technology used to transmit WEA alerts to capable mobile devices, and ATIS has standardized system performance.
103. Accordingly, we seek to refresh the record on our proposal to remove these statements from the WEA rules. We believe these provisions introduce confusion and are unnecessary, particularly as we do not expect that any Participating CMS Provider would need to make changes to their WEA service as a result of this proposed amendment. We seek comment on this proposal, particularly from any CMS Provider that would need to make changes to their WEA offerings in the event that the rules were so amended.
104. The Commission, as part of its continuing effort to advance digital equity for all, including people of color, persons with disabilities, persons who live in rural or Tribal areas, and others who are or have been historically underserved, marginalized, or adversely affected by persistent poverty or inequality, invites comment on any equity-related considerations and benefits (if any) that may be associated with the proposals and issues discussed herein. Specifically, we seek comment on how our proposals may promote or inhibit advances in diversity, equity, inclusion, and accessibility, as well the scope of the Commission's relevant legal authority.
105.
106.
107.
108.
109.
110. Accordingly,
Communications common carriers, Radio.
Radio, Television.
For the reasons discussed in this preamble, the Federal Communications Commission proposes to amend 47 CFR parts 10 and 11 as follows:
47 U.S.C. 151, 154(i) and (o), 201, 303(r), 403, and 606, 1202(a), (b), (c), (f), 1203, 1204, and 1206.
This section specifies the general functions that a Participating CMS Provider is required to perform within its infrastructure.
(a) Distribution of Alert Messages to mobile devices.
(b) Authentication of interactions with mobile devices, including the transmission of sufficient authentication information to allow mobile devices to only present WEA alerts from valid base stations.
(c) Reference Points D & E. Reference Point D is the interface between a CMS Provider gateway and its infrastructure. Reference Point E is the interface between a provider's infrastructure and mobile devices including air interfaces.
(a) Each participating CMS Provider shall submit a certification to the Commission that it has created, annually updated, and implemented a cybersecurity risk management plan. The cybersecurity risk management plan shall describe how the Participating CMS Provider employs its organizational resources and processes to ensure the confidentiality, integrity, and availability of WEA. The plan shall discuss how the Participating CMS Provider identifies the cyber risks that it faces, the controls it uses to mitigate those risks, and how it ensures that these controls are applied effectively to its operations. The plan shall address the security of all aspects of the Participating CMS Provider's communications systems and services that potentially could affect its provision of WEA messages. The plan shall be made available to the Commission upon request.
(b) Participating CMS Providers shall employ sufficient security controls to ensure the confidentially, integrity, and availability of the EAS. In furtherance of this requirement, the cybersecurity risk management plan shall address, but not be limited to, the following security controls:
(1) Changing default passwords prior to operation;
(2) Installing security updates in a timely manner;
(3) Securing equipment behind properly configured firewalls or using other segmentation practices;
(4) Requiring multifactor authentication where applicable;
(5) Addressing the replacement of end-of-life equipment; and
(6) Wiping, clearing, or encrypting user information before disposing of old devices.
(c) Participating CMS Providers shall take reasonable measures to protect the confidentiality, integrity, and availability of EAS to avoid the transmission of false alerts or non-transmission of valid Alert Messages;
Mobile devices are required to perform the following functions:
47 U.S.C. 151, 154 (i) and (o), 303(r), 544(g), 606, 1201, 1206.
(d) Annual EAS Security Certification.
(1) The identifying information required by the ETRS as specified in § 11.61(a)(3)(iv) shall include a Certification to the Commission that the EAS Participant has created, annually updated, and implemented a cybersecurity risk management plan. The cybersecurity risk management plan shall describe how the EAS Participant employs its organizational resources and processes to ensure the confidentiality, integrity, and availability of the EAS. The plan shall discuss how the EAS Participant identifies the cyber risks that its faces, the controls it uses to mitigate those risks, and how it ensures that these controls are applied effectively to their operations. The plan shall address the security of all aspects of an EAS Participant's communications systems and services that potentially could affect its provision of EAS messages. The plan shall be made available to the Commission upon request.
(2) EAS Participants shall employ sufficient security controls to ensure the confidentially, integrity, and availability of the EAS. In furtherance of this requirement, the cybersecurity risk management plan shall address, but not be limited to, the following security controls:
(i) Changing default passwords prior to operation;
(ii) Installing security updates in a timely manner;
(iii) Securing equipment behind properly configured firewalls or using other segmentation practices;
(iv) Requiring multifactor authentication where applicable;
(v) Addressing the replacement of end-of-life equipment; and
(vi) Wiping, clearing, or encrypting user information before disposing of old devices.
(3) EAS Participants shall take reasonable measures to protect the confidentiality, integrity, and availability of EAS to avoid the transmission of false alerts or non-transmission of valid EAS messages; failure to do so shall be, in addition to a violation of any specific provisions of this section, § 11.45(a), or § 10.520(d) of this chapter, an independent breach of this duty.
(c) No later than seventy-two (72) hours after an EAS Participant knows or should have known that its EAS equipment, or communications systems, or services that potentially could affect their provision of EAS, have been accessed in an unauthorized manner, the EAS Participant shall provide notification to the Commission identifying, if applicable, the date range of the incident, a description of the unauthorized access, the impact to the EAS Participant's EAS operational readiness, a description of the vulnerabilities exploited and the techniques used to access the device, identifying information for each actor responsible for the incident, and contact information for the EAS Participant. When one event or set of events gives rise to obligations under both paragraphs (b) and (c) of this section, an EAS Participant remains subject to each requirement individually. The Participant may elect to send a single notification to the Commission within 24 hours providing all the information described in both paragraphs or separate notification to the Commission within 24 hours and 72 hours.
Fish and Wildlife Service, Interior.
Request for new information.
We, the U.S. Fish and Wildlife Service (Service), notify the public that we are requesting new information to update the Species Status Assessment (SSA) for the North American Wolverine (
In order to fully consider and incorporate new information, the Service requests submittal of new information by close of business December 23, 2022. Information submitted electronically using the Federal eRulemaking Portal (see
(1)
(2)
We request that you send new information only by the methods described above. We will post all new information received on
Jodi Bush, Deputy Assistant Regional Director, Ecological Services, Region 1, U.S. Fish and Wildlife Service, 911 Northeast 11th Avenue, Portland, Oregon 97232; telephone: 503-231-2256; email:
On February 4, 2013, we published a proposed rule to list the distinct population segment (DPS) of wolverine occurring in the contiguous United States as a threatened species under the Act, with a proposed rule under section 4(d) of the Act that outlined the prohibitions considered necessary and advisable for the conservation of the wolverine (78 FR 7864; hereafter referred to as the “2013 proposed rule”). Please refer to the 2013 proposed rule and the 2018 Species Status Assessment (SSA) for the North American Wolverine (
Please refer to the 2013 proposed rule for a detailed description of Federal actions concerning the wolverine prior to 2013. On October 31, 2013 (78 FR 65248), we reopened the comment period on the 2013 proposed rule. On February 5, 2014 (79 FR 6874), we extended our final determination date and reopened the comment period on the 2013 proposed rule. On August 13, 2014 (79 FR 47522), we withdrew the 2013 proposed rule based on our conclusion that the factors affecting the DPS were not as significant as believed at the time of publication of the proposed rule. That 2014 withdrawal decision was challenged and ultimately vacated by court order in 2016 (
On October 13, 2020 (85 FR 64618), the Service again withdrew the 2013 proposed rule to list the DPS of the North American wolverine occurring in the contiguous United States as a threatened species under the Act. The 2020 withdrawal decision was based on our conclusion that the factors affecting the species as identified in the 2013 proposed rule were not as significant as believed at the time of publication of the proposed rule. We also found that the North American wolverines occurring in the contiguous United States did not qualify as a DPS.
The Center for Biological Diversity and WildEarth Guardians filed lawsuits in the District Court for the District of Montana challenging the Service's 2020 decision to withdraw the proposal to list the North American wolverine DPS. The cases were consolidated, and the State of Idaho's motion to intervene was granted. On February 4, 2022, the Service filed a motion asking the court to voluntarily return (remand) the 2020 withdrawal decision to the Service to allow the Service to reevaluate it; the Service also requested that the withdrawal decision remain in effect pending that reevaluation. On May 26, 2022, the court granted the Service's request for a voluntary remand of the 2020 withdrawal decision, but the court decided to vacate the withdrawal decision.
The court's action returns the listing process relative to the wolverine to the proposed rule stage. Therefore, the Service notifies the public that the February 4, 2013, proposed rule to list the DPS of wolverine occurring in the contiguous United States as threatened under the Act (78 FR 7864) has been reinstated. For purposes of consultation under section 7 of the Act, the wolverine, as of May 26, 2022, is again a species proposed for listing and subject to conferencing requirements.
We will be updating the SSA for the North American wolverine to include any new information not available as of the report published on March 1, 2018. We will use the updated SSA as the scientific foundation to aid in our reevaluation of whether the DPS is valid pursuant to our 1996 DPS policy (61 FR 4722), and if so, whether the DPS meets the definition of an endangered or threatened species under the Act, or whether the species is not warranted for listing. Per the court order, the Service is to make a final listing determination within 18 months of the court's judgment,
We are seeking information that has become available since March 1, 2018, regarding the wolverine. We will consider information from all interested parties. We are particularly interested in specific information concerning:
(1) Biological, commercial trade, or other relevant data concerning any threats (or lack thereof) to wolverine, and regulations that may be addressing those threats.
(2) the historical and current status, range, distribution, and population size of this species, including the locations of additional populations of wolverine.
(3) the biological or ecological requirements for wolverine, as well as ongoing conservation measures or efforts for the species and its habitat.
(4) Current or planned activities in the areas occupied by wolverine and possible impacts of these activities on this species.
(5) the amount and distribution of wolverine habitat, including den sites.
(6) the impacts of small population size and genetic diversity on the wolverine.
(7) the projected and reasonably likely impacts of climate change on the wolverine and its habitat, including the
(8) population connectivity between Canada and the lower 48 contiguous States of the United States and information on differences in regulations governing wolverine management, or wolverine conservation status, in Canada and the lower 48 contiguous States.
Please note that we are not requesting any additional public comments on the proposed listing rule published in 2013 (78 FR 7864). Instead, we are seeking only new information to update the SSA for the North American wolverine that was published on March 1, 2018. If you submitted comments or information on the proposed rule (78 FR 7864) during the initial comment periods from February 4, 2013, to May 6, 2013, from October 31, 2013, to December 2, 2013, from February 5, 2014, to May 6, 2014, or from October 18, 2016, to November 17, 2016, please do not resubmit them. Any such comments have been incorporated as part of the public record of the proposed rule, and we will fully consider them in the preparation of our final determination. Our final determination will take into consideration all written comments and any additional information we received during all comment periods or in response to this document. Our final determination may again be a withdrawal of the 2013 proposed rule; it may be a determination to finalize the 2013 proposed rule; or our final listing determination may differ from the proposed rule. If, after considering all new information, we reaffirm that the wolverine DPS is a listable entity and that it meets the definition of a threatened or endangered species under section 4 of the Act, we may decide it is appropriate to repropose the species for listing. At that time, we would provide an opportunity for public comment on an updated proposed rule.
You may submit new information concerning the update to the status assessment by one of the methods listed in
If you submit information via
Information and materials we receive will be available for public inspection on
The primary authors of this document are staff members of the Species Assessment Team, U.S. Fish and Wildlife Service.
The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; request for comments.
NMFS issues a proposed rule to implement Amendment 124 to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (BSAI FMP) and Amendment 112 to the Fishery Management Plan for Groundfish of the Gulf of Alaska (GOA FMP). First, this proposed rule would amend regulations for the Individual Fishing Quota (IFQ) and Community Development Quota (CDQ) Programs for pot gear configurations, pot gear tending and retrieval requirements, pot limits, and associated recordkeeping and reporting requirements. These changes would increase operational efficiency and flexibility for IFQ holders and CDQ groups. Second, this proposed rule would authorize jig gear as a legal gear type for harvesting sablefish IFQ and CDQ, increasing opportunities for entry-level participants. Third, this proposed rule would temporarily remove the Adak community quota entity (CQE) residency requirement for a period of five years. These actions are intended to promote the goals and objectives of the Northern Pacific Halibut Act of 1982, the Magnuson-Stevens Fishery Conservation and Management Act, the BSAI FMP, GOA FMP, and other applicable laws.
Submit comments on or before December 23, 2022.
You may submit comments on this document, identified by NOAA-NMFS-2022-0092, by any of the following methods:
•
•
Electronic copies of the Environmental Assessment and the Regulatory Impact Review (herein
Written comments regarding the burden-hour estimates or other aspects of the collection-of-information requirements contained in this proposed rule may be submitted to NMFS at the above address and to
Abby Jahn, 907-586-7228.
NMFS manages the groundfish fisheries of the BSAI under the BSAI FMP and of the GOA under the GOA FMP. The North Pacific Fishery Management Council (Council) prepared, and the Secretary of Commerce (Secretary) approved, the BSAI FMP and GOA FMP under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801
The International Pacific Halibut Commission (IPHC) and NMFS manage fishing for Pacific halibut (
Under the authority of the BSAI FMP, GOA FMP, and the Halibut Act, the Council recommended and NMFS established regulations that implemented the IFQ Program. The IFQ Program allocates sablefish and halibut harvesting privileges among U.S. fishermen. NMFS manages the IFQ Program pursuant to regulations at 50 CFR part 679 and 50 CFR part 300 under the authority of section 773c of the Halibut Act and section 303(b) of the Magnuson-Stevens Act. This proposed rule would implement Amendment 124 to the BSAI FMP and Amendment 112 to the GOA FMP. The Council recommended Amendment 124 and Amendment 112 to amend provisions of the BSAI FMP and GOA FMP applicable to the sablefish IFQ fisheries. FMP amendments and regulations developed by the Council may be implemented by NMFS only after approval by the Secretary of Commerce. Similarly, halibut fishery regulations developed by the Council may only be implemented by NMFS after approval of the Secretary of Commerce.
The following sections of this preamble describe (1) background information on the IFQ Program, CDQ Program, CQE Program, the Medical Transfer Provision, specific provisions of Amendment 101 to the GOA FMP, and halibut retention; (2) the need for this proposed rule; and (3) the specific provisions that would be implemented by this proposed rule.
Commercial halibut and sablefish fisheries in the GOA and BSAI are managed primarily under the IFQ Program. The IFQ Program was implemented in 1995 (58 FR 59375, November 9, 1993). The intent of the IFQ Program was to resolve conservation and management problems that arose from an open access fishery. The trawl sablefish fishery is not managed under the IFQ Program. This proposed rule does not modify regulations applicable to the trawl sablefish fishery.
Under the IFQ Program, access to non-trawl sablefish and halibut fisheries is limited to those persons holding quota share (QS). As an exclusive, revocable privilege, QS allows the holder to harvest a specific percentage of either the total allowable catch (TAC) in the sablefish fishery or the annual commercial catch limit in the halibut fishery. Issuance of QS was originally based on participation in the fisheries during historical qualifying periods, and QS is designated for geographic harvest areas, vessel operation type (
Allocation of QS is distributed on an annual basis through the issuance of an IFQ permit. An annual IFQ permit authorizes the permit holder to harvest a specified amount of the IFQ species in a regulatory area from a specific operation type and vessel category. IFQ is expressed in pounds and is based on the amount of quota share held in relation to the total quota share pool for each regulatory area with an assigned catch limit.
The Western Alaska Community Development Program (CDQ Program) was implemented in 1992 (57 FR 54936, November 23, 1992). Subsequently, the Magnuson-Stevens Act was amended to include provisions specific to the CDQ Program. The purposes of the CDQ Program are (1) to provide eligible western Alaska villages with the opportunity to participate and invest in fisheries in the BSAI management area; (2) to support economic development in western Alaska; (3) to alleviate poverty and provide economic and social benefits for residents of western Alaska; and (4) to achieve sustainable and diversified local economies in western Alaska (16 U.S.C. 1855(i)(1)(A)).
The CDQ Program consists of six different non-profit managing organizations (CDQ groups) representing different geographical regions in Alaska. The CDQ Program receives annual allocations of TAC for a variety of commercially valuable species in the BSAI groundfish, crab, and halibut fisheries, which are in turn allocated among the CDQ groups. CDQ groups use their allocations of halibut to provide opportunities for small vessel fishing by residents of their member communities. Section 4.3.1 of the Analysis (available as indicated in the
The CQE Program was implemented in 2004 (69 FR 23681, April 30, 2004). The purpose of the CQE Program was to improve the ability for rural coastal communities to maintain long-term opportunities to access the halibut and sablefish resources for the GOA. The CQE Program was later amended under Amendment 102 to the BSAI FMP to include eligible communities in Area 4B and the Aleutian Islands after the Council received a proposal from the Adak Community Development Corporation (ACDC) to develop a CQE Program specific to the Aleutian Islands for opportunities to access halibut and sablefish resources (79 FR 8870, February 14, 2014). The final rule implementing Amendment 102 allowed an Aleutian Islands CQE to purchase halibut CV QS assigned to Area 4B and sablefish QS assigned to the Aleutian Islands. Limitations on leasing IFQ derived from QS were established for either eligible community residents of Adak or non-residents for a period of five years. The Council recommended limiting the authority for an Aleutian Islands CQE to lease IFQ to non-CQE residents after five years to provide adequate time to accrue benefits to the community of Adak through deliveries, provide crew opportunities for residents, and earn revenue that could assist the purchase of additional QS. The intent of the time limitation was to explicitly tie the potential long-term benefits of QS held by an Aleutian Islands CQE to the residents of Adak. The limitation ended March 17, 2019 and the Adak CQE was required to lease the annual IFQ derived from QS only to eligible community residents of Adak.
In February 2021, the Council requested an emergency rule to suspend the residency requirements applicable to the Adak CQE Program for the 2021 fishing year. The Secretary of Commerce denied the request for emergency action because it did not meet the emergency criteria described at section 305(c) of the Magnuson-Stevens Act. In the denial letter, it was noted that a longer-term management solution would be the best approach to address the ongoing challenges and impacts on the community of Adak. As a result, the Council recommended this proposed rule to remove the residency requirement for an additional period of five years with the intent of creating more opportunities for the Adak CQE to fully harvest its allocation. Sections 4.3.3 and 4.3.4 of the Analysis provide additional detail on the history of the CQE Program.
The IFQ and CDQ fisheries are prosecuted in accordance with catch limits and managed in separate geographic areas of harvest. This proposed rule would implement provisions that affect IFQ halibut and sablefish in the GOA and IFQ and CDQ halibut and sablefish in the BSAI. Sablefish IFQ regulatory areas are defined and shown in Figure 14 to 50 CFR part 679 and section 1.3 of the Analysis. The sablefish IFQ areas in the GOA are the Southeast Outside District of the GOA (SEO), West Yakutat District of the GOA (WY), Central GOA (CGOA), and Western GOA (WGOA).
The halibut IFQ areas are consistent with IPHC regulatory areas and are shown in Figure 15 to part 679 in the Code of Federal Regulations and section 1.3 of the Analysis. These areas encompass different geographic ranges than the sablefish IFQ regulatory areas, and their boundary lines do not coincide except at the border between the United States and Canada. For the halibut IFQ areas, Area 2 is composed of Area 2A (Washington, Oregon, and California); Area 2B (British Columbia); and Area 2C (Southeast Alaska). Area 3 is composed of Area 3A (Central Gulf of Alaska) and Area 3B (Western Gulf of Alaska). Area 4 (BSAI) is composed of Areas 4A, 4B, 4C, 4D and 4E. The IPHC combines Areas 4C, 4D, and 4E into Area 4CDE for purposes of establishing a commercial fishery catch limit. Area 4CDE, Area 4B, and portions of Area 4A roughly correspond to the Bering Sea and Aleutian Islands Area defined in the BSAI FMP. A portion of Area 4A also includes part of the Western Regulatory Area of the GOA, as defined in the GOA FMP.
Since 1998, the temporary transfer, or leasing, of CV IFQ has generally been prohibited with a few narrow exceptions, including a medical transfer provision. The medical transfer provision was initially implemented in 2007 (72 FR 44795, August 9, 2007) and allows a QS holder, not otherwise qualified to hire a master (50 CFR 679.42(i)(1)), to temporarily transfer their annual IFQ to another individual if the QS holder or an immediate family member have a temporary medical condition that prevents them from fishing. An applicant for a temporary medical transfer must have the medical declaration block of the application signed by a healthcare provider describing the medical condition and health risks affecting the applicant, or the applicant's immediate family member, and their inability to participate in the IFQ fishery for which they hold QS. Original issues of QS are a “grandfathered” exception to the transfer prohibition, thus receive no benefit from the medical transfer provision.
The medical transfer provision was not included in the original design of the IFQ Program because the Council prioritized the policy objective of maintaining a fishing fleet primarily consisting of owner-operators by narrowly restricting transfer provisions. The medical transfer provision is intended to provide a mechanism for QS holders who are experiencing a medical condition that would temporarily prevent them from fishing during a season to transfer their annual IFQ to another individual. The provision was not intended to create an avenue for those chronically unable to participate in the fishery to maintain the benefits of IFQ harvests or otherwise facilitate non-medical transfers of IFQ. To reduce the long-term usage of the medical provision, the Council and NMFS limited the number of instances that QS holders may use the provision for any medical condition. Since March 16, 2020, NMFS cannot approve a medical transfer if the QS holder was granted a medical transfer in any three of the previous seven years for a medical condition.
For more information about the IFQ Program, refer to section 4.3.1 of the Analysis.
This section provides relevant background information on provisions implemented under Amendment 101 to the GOA FMP that are proposed to be changed or updated by this action. Amendment 101 to the GOA FMP (81 FR 95435, December 28, 2016) authorized the use of longline pot gear in the GOA sablefish IFQ fishery, established precautionary management measures to accompany authorization, and required vessel operators to comply with current retention requirements under the IFQ Program. The Council's intent in authorizing longline pot gear was to minimize whale depredation of hooked sablefish. The Council recommended a precautionary approach to minimize gear conflicts and grounds preemption specific to each GOA area. The Council limited the use of pot gear to the longline pot configuration and only authorized this new gear type for use in the sablefish IFQ fishery. Overall, the approach was influenced by public testimony, the physical nature of the sablefish fishing grounds in the GOA, and the composition of the sablefish IFQ
The final rule implementing Amendment 101 established a 120 pot limit in the SEO and WY, and a 300 pot limit in the CG and WG regulatory areas. The purpose of establishing pot limits was to control vessel fishing effort and limit the total amount of fishing grounds that a vessel can use at a given time. The Council considered the physical nature of the fishing grounds and how many pots vessel operators could feasibly deploy. It was determined that smaller pot limits were appropriate in the SEO and WY districts because these areas have spatially concentrated fishing grounds.
The final rule implementing Amendment 101 assigned gear retrieval and tending requirements specific to each GOA area. Regulations at 679.42(l)(5)(iii) describe gear retrieval requirements as “retrieve and remove” and gear tending requirements as “redeploy or remove.” This proposed rule uses the terms retrieval and tending throughout this preamble. The final rule implementing Amendment 101 established a gear retrieval requirement for CVs in the SEO district where vessel operators are required to retrieve gear when the vessel makes an IFQ landing. Other requirements established included a five-day tending requirement for CPs in the SEO district, a five-day tending requirement in the WY district and CG regulatory area, and a seven-day tending requirement in the WG regulatory area. The preamble to the proposed rule for Amendment 101 stated that SEO and WY districts are constrained to a narrow area on the edge of the continental shelf and there are more permit holders than other areas. These factors concentrate fishing effort and gear to a smaller area than the CG and WG. Notably, the Council recommended a longer time period for gear tending in the WG regulatory area because it is the largest area and there are fewer sablefish IFQ holders relative to other areas.
As described above, currently the regulations at 679.42(l)(5)(iii) include gear retrieval and tending requirements, which are grouped together as “gear retrieval” requirements despite the difference in operation for either requirement. In its April 6, 2022 motion, the Council recommended that the gear retrieval requirements be modified to seven days for the CG and five days for the SEO. This recommendation would not otherwise change the CG's current gear tending requirement. In the Council motion, there is no mention of changing the SEO District gear retrieval requirement to a gear tending requirement. However, the Council members' remarks on the record at the April 2022 meeting show that the Council clearly intended to recommend just that. During these remarks, the Council explained that changing to a gear tending requirement would allow CVs to leave gear in the water when making an IFQ landing in the SEO and expressed that this change was needed to increase flexibility for the IFQ sablefish pot gear fleet. Additionally, the Council's motion rejected an option that would have removed the gear tending and gear retrieval requirements altogether. The Council instead recommended the more modest modifications to provide participants with some additional flexibility while still limiting the potential for preemption of the fishing grounds.
Gear marking requirements for vessel operators using longline pot gear in the GOA were also included in the final rule implementing Amendment 101. The final rule required a vessel operator to use four or more buoys, a flag mounted on a pole, and a radar reflector to mark each end of a longline pot set. The purpose of these requirements was to enhance visibility of longline pot gear and improve vessel safety by preventing gear conflicts between vessels using hook-and-line gear and those using longline pot gear. Since implementation of Amendment 101, many vessels have switched from using hook-and-line gear to longline pot gear in the GOA. As described in sections 4.5.2 and 4.5.7 of the Analysis, these gear marking requirements are unnecessary to prevent gear conflicts and burdensome to the operation strategy for longline pot gear users.
In recommending Amendment 101, the Council indicated its intent to monitor interactions between longline pot and hook-and-line gear in the GOA sablefish IFQ fishery and to determine whether changes to regulatory provisions were needed. In 2021, The Council reviewed the GOA Sablefish Pots Review, which analyzed four years of fishery data and the efficacy of a suite of fishery management measures for the IFQ sablefish fishery. The review and public testimony highlighted that some gear provisions such as pot limits, gear retrieval, and tending requirements implemented under Amendment 101 were either too restrictive or not serving their intended purpose. As a result, the Council initiated analysis of an IFQ Omnibus action. Refer to sections 1.2 and 2.4 of the Analysis for a further discussion on the history and fishery impacts of Amendment 101.
Sablefish IFQ fishermen who also hold halibut IFQ are required to retain halibut that are 32 inches or greater in length (legal size) harvested in the BSAI and GOA sablefish IFQ fishery, provided they have unused halibut IFQ. This regulation was implemented with the IFQ Program in 1995 and is intended to promote full utilization of halibut by reducing discards of halibut caught incidentally in the sablefish IFQ fishery. Many IFQ fishermen hold both sablefish and halibut IFQ, and the two species can overlap in some fishing areas (58 FR 59375, November 9, 1993). In 2016, the IPHC recommended annual management measures that authorized longline pot gear as a legal gear type to retain halibut, provided NMFS implemented regulations to authorize longline pot gear in the sablefish IFQ fishery (81 FR 14000, March 16, 2016). In addition to authorizing longline pot gear in the sablefish IFQ fishery and the other provisions described in the preceding section, Amendment 101 also included halibut retention requirements that aligned Federal regulations with the provisions in the 2016 IPHC annual management measures. The purpose of requiring retention of incidentally caught halibut was to avoid discard, and therein discard mortality, of halibut.
As required by Federal regulations, each groundfish pot must include tunnel openings no wider than nine-inches to prevent certain non-target species, such as halibut, from entering the pot. Amendment 118 to the BSAI FMP (85 FR 840, January 8, 2020) implemented regulations requiring vessel operators to retain IFQ or CDQ halibut when using pot gear when an IFQ or CDQ permit holder on board the vessel has unused halibut IFQ or CDQ for the IFQ regulatory area fished in the IFQ vessel category. Amendment 118 also added an exception to the requirement for a tunnel opening of no wider than nine inches. The exception created by Amendment 118 applies to groundfish pots when there is halibut IFQ or CDQ on board, and when fishing for halibut or sablefish IFQ or CDQ in the BSAI. If the tunnel opening requirement remained in effect, the ability to harvest halibut IFQ or CDQ using pots would have been limited because the opening would be too small for legal halibut.
In developing this proposed rule, the Council and NMFS carefully considered existing regulations and retention requirements across the BSAI and GOA.
Pots used to fish for groundfish must have biodegradable panels to avoid ghost fishing. Collapsible slinky pots are an emerging pot type in pot fisheries, particularly for longline pot fisheries, which meet the existing definition for pot gear as specified in paragraph 15 of the definition for “Authorized fishing gear” at § 679.2. Currently, each pot, including collapsible slinky pots, must have a biodegradable panel as described in paragraph (15)(i) of the definition for “Authorized fishing gear.” However, collapsible slinky pots are prone to premature failure under this configuration (see Analysis section 4.5). This proposed rule would provide additional options for the permissible placement of the biodegradable panel on collapsible slinky pots so vessel operators in the IFQ and CDQ fisheries could choose the configuration that works best for their operation.
The final rule implementing the IFQ Program excluded jig gear from allowable gear types for the sablefish fixed gear fishery. The intent of the IFQ Program was not to change the sablefish TAC allocation scheme or require additional FMP amendments for allocation among gear types. As a result, the final rule defined the allocation categories as “hook-and-line and pot gear” and “trawl gear,” excluding jig gear from allowable fixed gear types for sablefish IFQ and CDQ fisheries.
For this proposed rule, the Council recommended regulatory revisions to authorize jig gear as an authorized fishing gear type in the GOA sablefish IFQ fisheries and the BSAI sablefish IFQ and CDQ fisheries. These proposed revisions would not change the allocation scheme but would change the naming conventions for TAC allocation categories. For alignment and clarity with Federal regulations, NMFS is updating the FMP language as well. The Council's intent is to increase entry-level opportunities and increase flexibility for QS holders. This is because jig gear is a smaller investment than other gear types and does not require significant vessel retrofits as with other gear. Additionally, jig gear is already an authorized gear type for the harvest of halibut IFQ and CDQ and this action would further align the authorized gear types in the halibut and sablefish IFQ fisheries.
Amendment 112, Amendment 124, and this proposed rule are intended to increase operational efficiency and reduce administrative burden for IFQ Program and CDQ Program participants. First, this proposed rule would expand available options for placement of a biodegradable panel specific to collapsible slinky pots used to fish for halibut IFQ or CDQ, or sablefish IFQ or CDQ. Second, this proposed rule would create an exemption from the requirement to comply with a nine-inch tunnel opening when a vessel begins a trip with unfished halibut IFQ on board and when those vessels are fishing for IFQ halibut and IFQ sablefish in the GOA. Third, this proposed rule would revise regulatory specifications for gear marking, pot limits, gear tending, and gear retrieval to implement the intended purposes of Amendment 101. Fourth, this proposed rule would authorize jig gear for the harvest of sablefish IFQ and CDQ in the BSAI and sablefish IFQ in the GOA in order to provide additional opportunity for entry-level participants. Fifth, this proposed rule would remove the Adak residency requirement for a period of five years in order to provide opportunity for the Adak CQE to fully harvest its IFQ. Lastly, this proposed rule would update regulations for clarity by revising recordkeeping and reporting requirements for groundfish logbooks (including IFQ species), and would improve operational efficiency by modifying the IFQ Program medical transfer provision and allowing electronic submission for IFQ and CQE Program application forms.
This proposed rule would revise regulations at 50 CFR part 679. This section describes the proposed changes to current regulations to implement Amendment 124 to the BSAI FMP and Amendment 112 to the GOA FMP, as well as additional regulations recommended by the Council and NMFS.
This proposed rule would amend regulations at § 679.2 to allow for the biodegradable panel to be placed anywhere on the mesh of a collapsible slinky pot. The panel must be at least 18 inches (45.72 cm) in length and use untreated cotton thread of no larger size than No. 30 (
These changes are limited to slinky pots in the IFQ and CDQ fisheries. The proposed rule would not affect pot gear used in non-IFQ or non-CDQ groundfish fisheries, which remain subject to the existing biodegradable panel placement requirements in the definition for “Authorized fishing gear” in paragraph (15)(i). Likewise, rigid pot gear used in the IFQ and CDQ fisheries remain subject to the requirements in the definition for “Authorized fishing gear” in paragraph (15)(i).
Pots used in the sablefish IFQ fishery are required to have tunnel openings no wider than nine inches, which are intended to exclude halibut. An exception to this requirement already applies in the BSAI when fishery participants use pots and also have unused halibut IFQ onboard. The current exception in the BSAI can be used even if no sablefish IFQ is onboard. This proposed rule would add an exception in the GOA to the nine-inch tunnel opening requirement only where there is an IFQ or CDQ permit holder onboard who has both unused halibut IFQ and unused sablefish IFQ onboard. Specifically, this proposed rule would apply the exemption at § 679.2 under the definition of “Authorized fishing gear” at paragraph (15)(iii) when there is IFQ halibut onboard a vessel and the harvester is fishing for IFQ sablefish with longline pot gear in the GOA in accordance with § 679.42(l). No change would be made to the exception for the BSAI nor to the BSAI halibut and sablefish pot gear requirements described at § 679.42(m).
This proposed rule would revise regulations at § 679.24(a)(3) to modify the requirements for marking of longline pot gear deployed to harvest IFQ sablefish in the GOA. This change was recommended because elements of the existing marking requirements are unnecessary and burdensome for vessel operations. This proposed rule would remove the requirement that each end of a set of longline pot gear have a cluster of four or more marker buoys, a flag
This proposed rule would modify § 679.42(l)(5)(ii) for longline pot gear limits in the WY District GOA. Namely, the maximum number of pots that a vessel operator may deploy would be increased from 120 to 200 when harvesting IFQ sablefish in the WY District of the GOA. This proposed rule would not modify the maximum number of pots permitted in the SEO District or CGOA and WGOA regulatory areas.
Additionally, this proposed rule would modify IFQ fisheries prohibitions at § 679.7(f) and gear tending and retrieval requirements at § 679.42(l)(5)(iii) for longline pot gear in the GOA. First, this proposed rule would add cross references to § 679.42(l)(5)(iii) in the prohibitions at § 679.7, including paragraph (f)(21) for CVs in the SEO District, paragraph (f)(22) for CPs in the SEO District, paragraph (f)(23) for CVs or CPs in the WY District and the CG regulatory area, and paragraph (f)(24) for CVs or CPs in the WG regulatory area. These changes are proposed for consistency and ease of navigation between regulations for longline pot gear in the GOA and prohibitions for IFQ fisheries.
Second, this proposed rule would modify regulations at § 679.42(l)(5)(iii)(A) for CV operators in the SEO District, by replacing retrieval requirements (
This proposed rule would revise regulations at §§ 679.2, 679.20, and 679.24 to authorize jig gear in the IFQ and CDQ sablefish fisheries in the BSAI and the IFQ sablefish fishery in the GOA consistent with Amendments 124 and 112. Jig gear is defined at § 679.2 in paragraph (8) of the definition for “Authorized fishing gear.” Authorization of jig gear for the aforementioned fisheries would not require the definition of jig gear to be changed. Instead, this proposed rule would add “jig gear” to the definition of “Fixed gear,” in paragraph (4)(ii) under “Authorized fishing gear” at § 679.2, to specify that jig gear may be used to harvest sablefish IFQ and CDQ from any BSAI reporting area. No GOA-specific changes are required. The definition of “Fixed gear,” defined at § 679.2 in paragraph (4)(i) under the definition “Authorized fishing gear,” currently includes all “longline gear,” used to harvest sablefish in the GOA. “Longline gear” is already defined to include “jig gear.”
This proposed rule would also revise regulations at § 679.20(a)(4)(iii)(A) for the Bering Sea subarea, § 679.20(a)(4)(iv)(A) for the Aleutian Islands subarea, and § 679.20(b)(1)(i) for the nonspecified reserve. This change would replace the phrase “hook-and-line and pot gear” with “fixed gear” for consistency with the definition of “Fixed gear” defined at § 679.2 in paragraph (4)(ii) of the definition “Authorized fishing gear.” This proposed rule would not change the percent of the TAC allocated to the sablefish IFQ fishery in the BSAI. NMFS would continue to allocate 50 percent of the sablefish TAC in the Bering Sea subarea and 75 percent of the sablefish TAC in the Aleutian Islands subarea to the sablefish IFQ fishery.
This proposed rule would add “jig gear” to § 679.24 where gear restrictions for sablefish are found. Specifically, this proposed rule would add “jig gear” to § 679.24(c)(2)(i)(A) and (B) so that jig gear is an authorized gear type for the Eastern GOA regulatory area and permitted when directed fishing for IFQ sablefish. This proposed rule would also add “jig gear” to § 679.24(c)(3) and (4) so that sablefish is not considered a prohibited species for vessel operators using jig gear in the Central GOA, Western GOA, or BSAI. This proposed rule would also make two grammatical corrections to the list of permissible gear types in the Eastern GOA regulatory area at § 679.24(c)(2)(i)(A) and (B) and § 679.24(c)(4), changing “and” to “or” to clarify that at least one of the listed gear types must be used, but all gear types need not be used simultaneously.
This proposed rule would revise regulations at § 679.42 for sablefish and halibut QS use specific to eligible community residents of Adak, Alaska. This proposed rule would revise the date specified at § 679.42(e)(8)(ii) and (f)(7)(ii) from March 17, 2019, to five years after the effective date of this final rule. The regulatory changes at § 679.42(e)(8)(ii) would apply only to a CQE in the Aleutian Islands subarea for sablefish QS. The regulatory changes at § 679.42(f)(7)(ii) would only apply to a CQE in IFQ regulatory Area 4B for halibut QS.
This proposed rule would modify § 679.21(a)(5), which currently references sablefish as a prohibited species via a cross-reference to § 679.24(c)(2)(ii). Because § 679.24(c)(2)(ii) only pertains to the Eastern GOA regulatory area, the proposed rule would change the cross reference to § 679.24(c)(2) to clarify that sablefish is a prohibited species for the western GOA, central GOA, and the BSAI, as well as the Eastern GOA, per § 679.24(c)(2) through (4). This fix would not modify prohibited species bycatch management or gear restrictions for sablefish but rather correct the cross reference to include all four areas.
This proposed rule would also revise regulations at § 679.42 to exclude medical transfers approved in 2020, 2021, or 2022 from the use restriction detailed at § 679.42(d)(2)(iv)(C). Specifically, this proposed rule would add paragraph (d)(2)(iv)(C)(
Additionally, this proposed rule would revise regulations at § 679.5 specific to the longline and pot gear catcher vessel daily fishing logbook (DFL) and the catcher processor daily
The proposed rule would revise regulations relevant to the CQE Program at §§ 679.4, 679.41, and 679.5. Those regulations require CQEs to submit certain information to the Regional Administrator and imply that information must be submitted by mail because only a mailing address is listed. This proposed rule would revise §§ 679.4(k)(10)(vi)(A) and (D), 679.41(l)(3), and 679.5(t)(2) to remove the address for the Regional Administrator and change the word “sent” to “submitted” in § 679.4(k)(10)(vi)(D) to allow for additional submission methods. As a result, no submission method would be included in regulations and, instead, NMFS would provide this information on forms and on the NMFS Alaska Region website at
NMFS is issuing this proposed rule pursuant to 304(b)(1)(A) and 305(d) of the Magnuson-Stevens Act. Section 304(b)(1)(A) authorizes NMFS to implement FMPs and regulatory amendments. Pursuant to Magnuson-Stevens Act section 305(d), this action is necessary to carry out the amendments to the BSAI FMP and the GOA FMP. The NMFS Assistant Administrator has determined this proposed rule is consistent with the Council's recommendations and NMFS regulatory amendments, the BSAI FMP, the GOA FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.
Regulations governing the U.S. fisheries for Pacific halibut are developed by the IPHC, the Council, and the Secretary of Commerce. Section 5 of the Halibut Act (16 U.S.C. 773c) allow the Regional Council having authority for a particular geographical area to develop regulations governing the allocation and catch of halibut in U.S. Convention waters as long as those regulations do not conflict with IPHC regulations. The proposed action is consistent with the Council's authority under the Halibut Act to implement management measures for the halibut IFQ fishery and does not conflict with IPHC regulations.
This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
NMFS prepared an analysis (“Analysis”) to assess the cost and benefits of available regulatory alternatives and considers all quantitative and qualitative measures. A copy of the Analysis is available from NMFS as indicated in the
The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities. NMFS requests comments on this certification for this proposed rule. The factual basis for this determination is as follows:
This proposed rule would modify IFQ Program regulations for IFQ and CDQ pot gear fisheries, including expanded flexibilities for the configuration of the biodegradable panel and tunnel opening exceptions for pots used to harvest IFQ and CDQ. This proposed rule would reduce the number of marker buoys and eliminate flagpole and radar reflector requirements for pot gear, modify gear tending and gear retrieval requirements, and increase pot limits. This proposed rule would authorize jig gear as a legal gear type for harvesting sablefish IFQ and CDQ, expanding fishing opportunities for entry-level participants. Lastly, the proposed action would temporarily remove the Adak CQE residency requirement for an additional five years and modify recordkeeping and reporting requirements to improve operational efficiency. A discussion of the potential impacts of the proposed action is further discussed in sections 4.7 and 4.8 of the Analysis.
Entities that would be directly regulated by this proposed rule include all vessel operators that harvest halibut and sablefish, including IFQ, CDQ, or CQE Program participants. In 2020, the most recent year with vessel revenue data available, 773 vessel operators participated in the BSAI IFQ or CDQ and GOA IFQ fixed gear halibut and sablefish fisheries. Of these vessel operators, 752 are considered small entities and 21 are considered large entities. Vessel operators are an estimate based on the number of unique vessels. Vessel operators are used as the unit for directly regulated small entities because there is no way to estimate revenue using individual QS holders. Direct impacts would be expected to be positive and beneficial for vessel operators who participate in the IFQ, CDQ, or CQE Programs because the intent of this action is to reduce regulatory burden and increase flexibility to allow for innovation in pot gear configurations and individual operations on the fishing grounds. Direct impacts are expected to be positive and beneficial for vessel operators who participate in the CQE Program because the intent of removing the residency requirement for an additional period of five years is to provide more opportunity for the Adak CQE to fully harvest its allocation.
This action does not place any new regulatory burden on vessel operators; instead, this action increases flexibility and operational efficiency. For these reasons, this action is not expected to have an adverse economic impact on a substantial number of small entities, an initial regulatory flexibility analysis is not required, and none has been prepared.
This proposed rule contains collection of information requirements subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). This proposed rule would revise existing collection-of-information requirements for OMB Control Number 0648-0665 (Alaska CQE Program) and revise and extend for 3-years existing collection-of-information requirements for 0648-0353 (Alaska Region Gear Identification Requirements). The existing collection-of-information requirements would continue to apply under 0648-0213 (Alaska Region Logbook and Activity Family of Forms); 0648-0272 (Alaska Pacific Halibut & Sablefish Fisheries: IFQ); and 0648-0515 (Alaska Interagency Electronic Reporting System). The proposed changes to the collections are described below. The public reporting burdens for the information collection requirements provided below includes the time for
NMFS proposes to revise and extend by three years the existing requirements for OMB Control Number 0648-0353. This collection contains gear identification requirements for the groundfish fisheries in the Exclusive Economic Zone off Alaska. This collection would be revised to reduce the number of marker buoys required for longline pot gear deployed to fish IFQ sablefish in the GOA because this proposed rule would remove requirements for the vessel owner to use four or more marker buoys, a flag mounted on a pole, and a radar reflector to mark each end of a longline set. Removing these requirements would decrease the burden for harvesters and increase operational efficiency. The number of respondents would not change. Public reporting burden is estimated to average 15 minutes or less per individual response to collect the information and paint it on a buoy. Subject to public comment, no changes are made to the estimated burden as the estimate allows for differences in the time needed to mark buoys. The estimated total number of respondents for this collection is 895; the estimated total annual burden hours are 1,460 hours; and the estimated total annual cost to the public for recordkeeping and reporting costs is $13,425.
This information collection is revised to modify the text on the Application for CQE to Transfer IFQ to an Eligible Community Resident or Non-Resident because this proposed rule would remove the residency requirement for the Adak CQE for five years.
This proposed rule also would revise regulations for the CQE annual report, the CQE LLP authorization letter, the Application for Nonprofit Corporation to be Designated as a CQE, and the Application for a CQE to Receive a Non-trawl Groundfish LLP License to provide additional methods for the public to submit the information as the agency moves toward electronic submission.
These revisions do not affect the number of respondents, anticipated responses, or burden hours or costs. The public reporting burden per individual response is estimated to average 2 hours for the Application for CQE to Transfer IFQ to an Eligible Community Resident or Non-Resident, 200 hours for the Application for Nonprofit Corporation to be Designated as a CQE, 40 hours for the CQE Annual Report, 20 hours for the Application for a CQE to Receive a Non-trawl Groundfish LLP License, and 1 hour for the CQE License Limitation Program Authorization letter.
Public comment is sought regarding: whether these proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Submit comments on these or any other aspects of the collection of information to NMFS Alaska Region at the
Notwithstanding any other provisions of the law, no person is required to respond to and no person shall be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.
Alaska, Fisheries, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, NMFS proposes to amend 50 CFR part 679 as follows:
16 U.S.C. 773
(4) * * *
(ii) For sablefish harvested from any BSAI reporting area, all hook-and-line gear, jig gear, and all pot gear.
(15)
(i) * * *
(A)
(B) [Reserved]
(iii)
The revisions read as follows:
(c) * * *
(1) * * *
(ii)
(3) * * *
(i) * * *
(A) * * *
(
(B) * * *
(
(iv) * * *
(A) * * *
(
(f) * * *
(21) Fail to redeploy or remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher vessel within five days of deploying the gear to fish IFQ sablefish in the Southeast Outside District of the GOA in accordance with § 679.42(l)(5)(iii)(A).
(22) Fail to redeploy or remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher/processor within five days of deploying the gear to fish IFQ sablefish in the Southeast Outside District of the GOA in accordance with § 679.42(l)(5)(iii)(B).
(23) Fail to redeploy or remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher vessel or a catcher/processor within five days of deploying the gear to fish IFQ sablefish in the West Yakutat District of the GOA, and within seven days of deploying the gear to fish IFQ sablefish in the Central GOA regulatory area, in accordance with § 679.42(l)(5)(iii)(C) and (E).
(24) Fail to redeploy or remove from the fishing grounds all deployed longline pot gear that is assigned to, and used by, a catcher vessel or a catcher/processor within seven days of deploying the gear to fish IFQ sablefish in the Western GOA regulatory area in accordance with § 679.42(l)(5)(iii)(D).
(a) * * *
(4) * * *
(iii) * * *
(A)
(iv) * * *
(A)
(b) * * *
(1) * * *
(i)
(a) * * *
(5)
(a) * * *
(3) Each end of a set of longline pot gear deployed to fish IFQ sablefish in the GOA must have one hard buoy ball attached and marked with the capital letters “LP” in accordance with paragraph (a)(2) of this section.
(c) * * *
(2) * * *
(i) * * *
(A) No person may use any gear other than hook-and-line, longline pot, jig, or trawl gear when fishing for sablefish in the Eastern GOA regulatory area.
(B) No person may use any gear other than hook-and-line gear, longline pot gear, or jig gear to engage in directed fishing for IFQ sablefish.
(3)
(4)
(d) * * *
(2) * * *
(iv) * * *
(C) Except as provided for in paragraph (d)(2)(iv)(C)(
(
(
(e) * * *
(8) * * *
(ii) In the Aleutian Islands subarea may lease the IFQ resulting from that QS to any person who has received an approved Application for Eligibility as described in § 679.41(d) prior to [
(f) * * *
(7) * * *
(ii) In IFQ regulatory Area 4B may lease the IFQ resulting from that QS to any person who has received an approved Application for Eligibility as described in § 679.41(d) prior to [
(l) * * *
(5) * * *
(ii) * * *
(B) In the West Yakutat District of the GOA, a vessel operator is limited to deploying a maximum of 200 pots.
(iii) * * *
(A) In the Southeast Outside District of the GOA, a catcher vessel operator must redeploy or remove from the fishing grounds all longline pot gear that is assigned to the vessel and deployed to fish IFQ sablefish within five days of deploying the gear.
(C) In the West Yakutat District of the GOA, a vessel operator must redeploy or remove from the fishing grounds all longline pot gear that is assigned to the vessel and deployed to fish IFQ sablefish within five days of deploying the gear.
(E) In the Central GOA regulatory area, a vessel operator must redeploy or remove from the fishing grounds all longline pot gear that is assigned to the vessel and deployed to fish IFQ sablefish within seven days of deploying the gear.
The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments are requested regarding: whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; ways to enhance the quality, utility and clarity of the information to be collected; and ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques and other forms of information technology.
Comments regarding this information collection received by December 23, 2022 will be considered. Written comments and recommendations for the proposed information collection should be submitted within 30 days of the publication of this notice on the following website
An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.
Woodsy Owl is America's symbol for the conservation of the environment. The public service campaign slogans associated with Woodsy Owl are “Give a Hoot, Don't Pollute” and “Lend a Hand, Care for the Land.” The mission statement of the Woodsy Owl's conservation campaign is to help young children discover the natural world and join in life-long actions to care for that world.
Each land exchange requires preparation of an Agreement to Initiate as required by title 36 Code of Federal Regulations (CFR), part 254, subpart A—section 254.4—Agreement to Initiate. The Agreement to Initiate document specifies the preliminary and non-binding intentions of the non-Federal land exchange party and the Forest Service in pursuing a land exchange. The Agreement to Initiate can contain such information as the description of properties being considered in the land exchange, an implementation schedule of action items, identification of the party responsible for each action item, as well as target dates for completion of each action item.
As the exchange proposal develops, the Forest Service and the non-Federal land exchange party may enter into a binding Exchange Agreement, pursuant to Title 36 CFR part 254, subpart A, section 254.14—Exchange Agreement. The Exchange Agreement documents the conditions that must be met to complete the exchange. The Exchange Agreement can contain information such as identification of parties, description of lands and interests to be exchanged, identification of all reserved and outstanding interest, and all other terms and conditions necessary to complete the exchange.
The program offers the additional benefit of aiding the Agency's recruitment program by allowing interested persons to observe and participate in innovative intern-type programs. This access also provides the Agency with an opportunity to showcase the quality of the law enforcement program and services.
On June 5, 2013, the Department issued a final rule to update, rename, and relocate the administrative appeal regulations governing occupancy or use of NFS lands and resources to a new part 214 entitled “Post-decisional Administrative Review Process for Occupancy or Use of National Forest System Lands and Resources” (78 FR 33705). The new part 214 shortens the appeal process, the appeal period, and reduces the cost to the appellant and government of processing the appeal.
Rural Business-Cooperative Service, USDA.
Notice.
This notice is given to invite applications for grants under the Rural Business Development Grant (RBDG) Program for fiscal year (FY) 2023, subject to the availability of funding. This notice is being issued prior to passage of a FY 2023 Appropriations Act in order to allow applicants sufficient time to leverage financing, prepare and submit their applications, and give the Agency time to process applications within FY 2023. Based on FY 2022 appropriated funding, the Agency estimates that approximately $46,000,000 will be available for FY 2023. Successful applications will be selected by the Agency for funding and subsequently awarded to the extent that funding may ultimately be made available through appropriations. An announcement on the website at
Complete applications may be submitted in paper or electronic format and must be received by 4:30 p.m. local time on February 28, 2023, in the USDA Rural Development (RD) State Office for the State where the project is located. A list of the USDA RD State Offices can be found at:
This funding announcement will also be announced on
Lisa Sharp at
• Assisting rural communities to recover economically through more and better market opportunities and through improved infrastructure.
• Ensuring all rural residents have equitable access to RD programs and benefits from RD funded projects.
• Reducing climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities.
1.
Business opportunity projects must be in compliance with eligible uses as stated in 7 CFR 4280.417(a)(1) (eCFR:: 7 CFR 4280.417—Project eligibility) that include the establishment of business support centers or providing funds for job training and leadership development in rural areas. Business opportunity projects must be consistent with any local and area-wide strategic plans for community and economic development, coordinated with other economic development activities in the project area, and consistent with any RD State Strategic Plan.
Business enterprise projects must be in compliance with eligible uses as stated in 7 CFR 4280.417(a)(2) (eCFR: 7 CFR 4280.417—Project eligibility.) and are to be used to finance or develop small and emerging businesses in rural areas. Enterprise grant purposes include projects for the acquisition and development of land, access streets and roads, the conversion or modernization of buildings, capitalization of revolving loan funds and the purchase of machinery and equipment for businesses located in a rural area.
2.
Set-aside funding may or may not be made available through appropriations in FY 2023 where continued emphasis is given to financial assistance for projects located in these areas. Eligible applicants for the Native American and Rural Empowerment Zone/Enterprise Communities/Rural Economic Area Partnership set-aside funds, if available, must demonstrate that at least 75 percent of the benefits of an approved grant will assist beneficiaries in the designated areas. Eligible applicants for the Persistent Poverty Counties, Native American Persistent Poverty areas, and the SECD set-aside funds, if available, must demonstrate that 100 percent of the benefits of an approved grant will assist beneficiaries in the designated areas. The completed application deadline for these set-aside funds, if available, is consistent with the RBDG application deadline date of February 28, 2023. Applicants for set-aside funds must indicate that they are applying for set-aside funds and may not submit a duplicate application for regular RBDG funds. If funding for an anticipated set-aside program is not appropriated in FY 2023, or if any eligible applications for set-aside funding are not funded due to insufficient funds, such applications will be allowed to compete for available FY 2023 regular RBDG funds in the State where the project is located.
(c)
3.
4.
1.
Grants may be made to a Public Body/Government Entity, an Indian Tribe, or a Nonprofit entity primarily serving rural areas. In accordance with 7 CFR 4280.416(d) (
2.
3.
1.
Entities wishing to apply for assistance should contact the USDA RD State Office provided in the
2.
(a) The applicant documentation and forms needed for a complete application are located in 7 CFR part 4280, subpart E (
(b) The Agency requires information to make an eligibility determination through applications that must include the items identified in 7 CFR 4280.427 (
(1) Please note that no assistance or funding can be provided to hemp producers or processors unless they have a valid license issued from an approved State, Tribal or Federal plan as per section 10113 of the Agriculture Improvement Act of 2018, Public Law 115-334 (
(2) Other information the Agency may request to assist in making a grant award determination.
Each selection priority criterion outlined in 7 CFR 4280.427 (
(c) The application must be submitted in one package. The single package should be well organized and include a table of contents, if appropriate. There
(d) An original copy of the application must be filed with the RD State Office for the State where the project is located. For projects involving multiple states, the application must be filed in the RD State Office where the Applicant is located.
(e) The component pieces of this application require original signatures on the original application. Any form that requires an original signature but is signed electronically in the application submission must be signed in ink by the authorized person prior to the disbursement of funds.
(f) RBDG grants must conform with the environmental policies and procedures of 7 CFR part 1970 (eCFR :: 7 CFR part 1970—Environmental Policies and Procedures).
3.
(a) At the time of application, each applicant must have an active registration in SAM before submitting its application in accordance with 2 CFR 25 (
(b) Applicants must maintain an active SAM registration, with current, accurate and complete information, at all times during which it has an active Federal award or an application under consideration by a Federal awarding agency.
(c) Applicants must ensure they complete the Financial Assistance General Certifications and Representations in SAM.
(d) Applicants must provide a valid UEI in its application, unless determined exempt under 2 CFR 25.110 (
(e) The Agency will not make an award until the applicant has complied with all SAM requirements including providing the UEI. If an applicant has not fully complied with the requirements by the time the Agency is ready to make an award, the Agency may determine that the applicant is not qualified to receive a Federal award and use that determination as a basis for making a Federal award to another applicant.
4.
(a)
(b)
5.
Intergovernmental Review under Executive Order 12372 is not required in this program.
6.
(a) Indirect costs will be permitted in accordance with applicable law and in accordance with 2 CFR part 200 (
(b) In accordance with 7 CFR 4280.421 (eCFR :: 7 CFR 4280.421—Term requirement.), a project must reasonably be expected to be completed within one (1) full year after it has begun.
7.
Applicants may submit applications in hard copy or electronic format as previously indicated in the Application and Submission Information section of this notice. If the applicant wishes to hand deliver its application, the addresses for these deliveries are located in the
1.
(a) The Agency will review each application for assistance in accordance with the priorities established in 7 CFR 4280.435 (eCFR :: 7 CFR 4280.435—Scoring criteria.). The Agency will assign each application a priority rating and will select applications for funding based on the priority ratings and the total funds available to the program. Failure to address any one of the criteria by the application deadline will result in the application being determined ineligible, and the application will not be considered for funding.
(b) The Agency will use the criteria in 7 CFR 4280.435 (eCFR :: 7 CFR 4280.435—Scoring criteria.) to score applications for purposes identified under 7 CFR 4280.417(a)(1) and (2).eCFR :: 7 CFR 4280.417—Project eligibility.
(1)
(2) Points will be awarded for each of the following criteria met by the community or communities that will receive the benefit of the grant. However, regardless of the mathematical total of points indicated by paragraphs (2)(a) through (d) of this section, total points awarded under this paragraph (2) must not exceed 40.
(a)
(b)
(c)
(d)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(c) The following are examples of special Secretary of Agriculture initiatives that can support obtaining discretionary points.
(1) Assisting rural communities recover economically through more and better market opportunities and through improved infrastructure. Applicant would receive priority points if the project is located in or serving one of the top 10 percent of counties or county equivalents based upon county risk score in the United States. The website, Rural Development: Key Priorities | Rural Development (usda.gov)
(2) Ensuring all rural residents have equitable access to RD programs and benefits from RD funded projects. Applicant may receive priority points if the project is located in or serving a community with a score of 0.75 or above on the Center for Disease Control's Social Vulnerability Index. The website, Rural Development: Key Priorities | Rural Development (
(3) Reduce climate pollution and increasing resilience to the impacts of climate change through economic support to rural communities. Applicants may receive points if the project is located in or serving coal, oil and gas, and power plant communities whose economic well-being ranks in the most distressed tier of the Distressed Communities Index. The website, Rural Development: Key Priorities | Rural Development (
The Agency will assign each application a priority rating based on the total score and will select applications for funding based on the priority ratings and the total funds available to the program for opportunity-type projects and enterprise-type projects.
2.
The RD State Offices will review applications to determine if they are eligible for assistance based on requirements contained in 7 CFR 4280.416 (
The Agency will score each application based on the information contained in the application and its supporting information. All applications submitted for funding must be in one package and contain sufficient information to permit the Agency to complete a thorough priority rating. Agency employees may not consider any information that is not provided by the applicant in writing for scoring purposes. Applications will not be considered for funding if they do not provide sufficient information to determine eligibility or are missing required elements.
Applications for set-aside funds, if available, will compete at the National Office in their respective categories. Applications for regular RBDG projects will compete at the state level in their respective category, business opportunity grants or business enterprise grants, for funding made available through RD State allocated funds. Applications will be reviewed, prioritized by score, and funded by ranking each project in highest to lowest score order until available funds are
The Agency will notify eligible applicants in writing if RBDG funds are not available. The applicant is permitted to respond in writing that they wish their application to be reconsidered in the next fiscal year. The applicant may provide additional updated information to the Agency prior to the next fiscal year's application deadline for their project.
The Agency will notify eligible applicants in writing if set-aside funds are not available. Applications that are eligible for set-aside funds but are unfunded due to the availability of funds will be allowed to compete for available FY 2023 regular RBDG funds in the State where the project is located. For projects involving multiple states, the application will be returned to the RD State Office where the Applicant is located and will compete for funds in that State. The Agency will notify eligible applicants in writing if their application will not be funded in FY 2023 due to insufficient funds in the set-aside and regular RBDG programs.
1.
Successful applicants will receive notification for funding from the USDA RD State Office. Applicants must comply with all applicable statutes and regulations before the grant award can be approved and funded. If an application is withdrawn by the applicant, it can be resubmitted later and will be evaluated as a new application in the period submitted.
2.
Additional requirements that apply to grantees selected for this Program can be found in 7 CFR part 4280, subpart E (
All successful applicants will be notified by letter which will include a Letter of Conditions and a Letter of Intent to Meet Conditions. This letter is not an authorization to begin performance, but it is a notification that grant funds may be awarded subject to conditions. The grant will be considered officially awarded when all conditions in the Letter of Conditions have been met and the Agency obligates the funding for the project. If the applicant wishes to consider beginning their project performance prior to the grant being officially closed, all pre-award costs must be approved in writing and in advance by the Agency.
Additional requirements that apply to grantees selected for these programs can be found in 7 CFR part 4280, subpart E (
In addition, all recipients of Federal financial assistance are required to report information about first-tier sub-awards and executive compensation (see 2 CFR part 170 (
The following additional requirements apply to grantees selected for these programs:
(a) Form RD 4280-2 “Rural Business-Cooperative Service Financial Assistance Agreement.”
(b) Letter of Conditions.
(c) Form RD 1940-1, “Request for Obligation of Funds.”
(d) Form RD 1942-46, “Letter of Intent to Meet Conditions.”
(e) SF LLL, “Disclosure of Lobbying Activities,” if applicable.
(f) Grantees will use Form SF 270, “Request for Advance or Reimbursement” when requesting grant funds from the Agency.
3.
(a) A Financial Status Report and a Project Performance Activity Report will be required of all grantees on a quarterly basis until initial funds are expended and yearly thereafter, if applicable, based on the Federal fiscal year. Grantees must continuously monitor performance to ensure that time schedules are being met, projected work by time periods is being accomplished, and other performance objectives are being achieved. Grantees must submit an original of each report to the Agency no later than 30 days after the end of the quarter. The grantee will complete the project within the total time available to it in accordance with the Scope of Work and any necessary modifications thereof prepared by the grantee and approved by the Agency. A final Project Performance Report will be required with the final Financial Status Report. The final report may serve as the last quarterly report. The final report must provide complete information regarding the jobs created and supported as a result of the RBDG grant if applicable. The Project Performance Reports must include, but not be limited to, the following:
(1) A comparison of actual accomplishments to the objectives established for that period.
(2) Problems, delays, or adverse conditions, if any, which have affected or will affect attainment of overall project objectives, prevent meeting time schedules or objectives, or preclude the attainment of particular project work elements during established time periods. This disclosure shall be accompanied by a statement of the action taken or planned to resolve the situation.
(3) Objectives and timetable established for the next reporting period.
(4) Any special reporting requirements, such as jobs supported and created, businesses assisted, or economic development which results in improvements in median household incomes, and any other specific requirements, will be placed in the reporting section of the Letter of Conditions.
(5) Within 90 days after the conclusion of the project, the grantee will provide a final Project Evaluation Report. The last quarterly payment will be withheld until the final report is received and approved by the Agency. Even though the grantee may request reimbursement on a monthly basis, the last 3 months of reimbursements will be withheld until the final Project Evaluation, Project Performance, and Financial Status Reports are received and approved by the Agency.
(b) In addition to any reports required by 2 CFR part 200 (
For general questions about this announcement, please contact your USDA RD State Office provided in the
Awards under this announcement for Infrastructure projects to Non-Federal entities, defined pursuant to 2 CFR 200.1 as any State, local government, Indian tribe, Institution of Higher Education, or nonprofit organization, shall be governed by the requirements of section 70914 of the Build America, Buy America Act (BABA) within the IIJA, and its implementing regulations. The Act requires the following Buy America preference:
(1) All iron and steel used in the project are produced in the United States. This means all manufacturing processes, from the initial melting stage through the application of coatings, occurred in the United States.
(2) All manufactured products used in the project are produced in the United States. This means the manufactured product was manufactured in the United States, and the cost of the components of the manufactured product that are mined, produced, or manufactured in the United States is greater than 55 percent of the total cost of all components of the manufactured product, unless another standard for determining the minimum amount of domestic content of the manufactured product has been established under applicable law or regulation.
(3) All construction materials are manufactured in the United States. This means that all manufacturing processes for the construction material occurred in the United States.
In accordance with the Paperwork Reduction Act of 1995, the information collection requirement contained in this notice is approved by OMB under OMB Control Number 0570-0070.
All applicants, in accordance with 2 CFR part 25 (
All grants made under this notice are subject to title VI of the Civil Rights Act of 1964 as required by the USDA (7 CFR part 15, subpart A (eCFR :: 7 CFR part 15 subpart A—Nondiscrimination in Federally-Assisted Programs of the Department of Agriculture—Effectuation of Title VI of the Civil Rights Act of 1964) and section 504 of the Rehabilitation Act of 1973, title VIII of the Civil Rights Act of 1968, title IX, Executive Order 13166 (Limited English Proficiency), Executive Order 11246, and the Equal Credit Opportunity Act of 1974.
In accordance with Federal civil rights laws and USDA civil rights regulations and policies, the USDA, its Mission Areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information (
To file a program discrimination complaint, a complainant should complete a Form AD-3027, USDA Program Discrimination Complaint Form, which can be obtained online at:
(1)
(2)
(3)
Rural Utilities Service, USDA.
Notice.
The United States Department of Agriculture (USDA) Rural Utilities Service (RUS) administers rural utilities programs, including the Telecommunications Program. RUS announces the depreciation rates for telecommunications plant for the period ending December 31, 2021.
These rates are applicable immediately and will remain in effect until rates are available for the period ending December 31, 2022.
Laurel Leverrier, Assistant Administrator, Telecommunications Program, Rural Utilities Service, STOP 1590—Room 4121, 1400 Independence Avenue SW, Washington, DC 20250-1590. Telephone: (202) 720-9556, Email:
In 7 CFR part 1737, Pre-Loan Policies and Procedures Common to Insured and Guaranteed Telecommunications Loans, § 1737.70(e) explains the depreciation rates that are used by RUS in its feasibility studies.
RUS is publishing its annual median depreciation rates for all borrowers, in accordance with § 1737.70(e)(2). RUS also notes that the rates have changed only minimally from the previous year.
Moly-Cop USA, LLC submitted a notification of proposed production activity to the FTZ Board (the Board) for its facility in Kansas City, Missouri within FTZ 15. The notification conforming to the requirements of the Board's regulations (15 CFR 400.22) was received on November 17, 2022.
Pursuant to 15 CFR 400.14(b), FTZ production activity would be limited to the specific foreign-status material(s)/component(s) and specific finished product(s) described in the submitted notification (summarized below) and subsequently authorized by the Board. The benefits that may stem from conducting production activity under FTZ procedures are explained in the background section of the Board's website—accessible via
The proposed finished product is forged steel grinding balls (duty rate is duty-free).
The proposed foreign-status material and component is hot-rolled alloy steel round bar (duty rate is duty-free). The request indicates that hot-rolled alloy steel round bar is subject to duties under section 232 of the Trade Expansion Act of 1962 (section 232) or Section 301 of the Trade Act of 1974 (section 301), depending on the country of origin. The applicable section 232 and section 301 decisions require subject merchandise to be admitted to FTZs in privileged foreign status (19 CFR 146.41).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary and sent to:
A copy of the notification will be available for public inspection in the “Online FTZ Information System” section of the Board's website.
For further information, contact Juanita Chen at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
In response to a request for a changed circumstances review (CCR), the U.S. Department of Commerce (Commerce) is initiating a CCR of the antidumping duty (AD) order on certain corrosion resistant inhibitors (corrosion inhibitors) from the People's Republic of China (China). Additionally, Commerce preliminarily determines that Kanghua Chemical Co., Ltd. (Chuzhou Kanghua) is the successor-in-interest to Nantong Kanghua Chemical Co., Ltd. (Nantong Kanghua). Interested parties are invited to comment on these preliminary results.
Applicable November 23, 2022.
Hermes Pinilla, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-3477.
On March 19, 2019, Commerce published the AD order on corrosion inhibitors from China in the
On October 7, 2022, we extended the deadline to initiate the CCR.
The merchandise covered by the
Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.216, Commerce will conduct a CCR of an order upon receipt of information or a review request from an interested party for a review of an order which shows changed circumstances sufficient to warrant a review of the order.
Under 19 CFR 351.216(c), Commerce will not review a final determination of an investigation less than 24 months after the date of publication of notice of the final determination unless it finds that good cause exists. However, 19 CFR 351.216(d) provides that if Commerce determines that good cause exists and the changed circumstances are sufficient to warrant a review, it will conduct a CCR, in accordance with 19 CFR 351.221.
Based on the record information, Commerce has determined that, pursuant to 19 CFR 351.216(c), good cause exists to conduct a CCR. Chuzhou Kanghua requested a CCR because of a change in name of the company and address not contemplated during the original investigation.
The information submitted by Chuzhou Kanghua demonstrates that its request is based solely on a change in the Chinese name of the company from “Nantong Kanghua Chemical Co., Ltd” to “Kanghua Chemical Co., Ltd,” which was approved on February 17, 2022.
As such, based of the reasons outlined above, and the information provided on the record by Chuzhou Kanghua, we find good cause exists for initiating a CCR to determine whether Chuzhou Kanghua is the successor-in-interest to Nantong Kanghua, in accordance with 19 CFR 351.216(c) and (d). Therefore, in accordance with section 751(b)(1) of the Act and 19 CFR 351.216, we are initiating a CCR to determine whether Chuzhou Kanghua is the successor-in-interest to Nantong Kanghua for purposes of the
Commerce is permitted by 19 CFR 351.221(c)(3)(ii) to combine the notice of initiation of a CCR and the preliminary results if Commerce concludes that expedited action is warranted. In this instance, because the record contains information necessary to make a preliminary finding, we find that expedited action is warranted and have combined the notice of initiation and the preliminary results.
Accordingly, pursuant to section 751(b) of the Act, we have conducted a successor-in-interest analysis in response to Chuzhou Kanghua's request. For a complete discussion of the information that Chuzhou Kanghua provided, and the complete successor-in-interest analysis,
Should our final results remain unchanged from these preliminary results, we will instruct U.S. Customs and Border Protection to assign entries of subject merchandise exported by Chuzhou Kanghua the AD cash deposit rate applicable to Nantong Kanghua. Commerce will issue its final results of the review in accordance with the time limits set forth in 19 CFR 351.216(e).
In accordance with 19 CFR 351.309(c)(1)(ii), interested parties may submit case briefs not later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed no later than seven days after the case briefs, in accordance with 19 CFR 351.309(d). Parties who submit case or rebuttal briefs are encouraged to submit with each argument: (1) a statement of the issue; (2) a brief summary of the arguments; and (3) a table of authorities.
Pursuant to 19 CFR 351.310(c), interested parties who wish to request a hearing must submit a written request via ACCESS within 30 days of publication of this notice. Hearing requests should contain the following information: (1) the party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. Oral presentations at the hearing will be limited to issues raised in the briefs. If a request for a hearing is made, Commerce intends to hold the hearing at a time and date to be determined. Parties should confirm the date and the time of the hearing two days before the scheduled date.
Consistent with 19 CFR 351.216(e), we will issue the final results of this CCR no later than 270 days after the date on which this review was initiated, or within 45 days if all parties agree to our preliminary finding.
This initiation and preliminary results notice is published in accordance with sections 751(b)(1) and 777(i)(1) of the Act, and 19 CFR 351.216(b), 351.221(b), and 351.221(c)(3).
International Trade Administration, U.S. Department of Commerce.
Notice of an opportunity to apply for membership on the Advisory Committee on Supply Chain Competitiveness.
The Department of Commerce, International Trade Administration (ITA), seeks nominations for immediate consideration to fill positions on the Advisory Committee on Supply Chain Competitiveness (“The Committee”). The Committee advises the Secretary on the necessary elements of a comprehensive policy approach to supply chain competitiveness. The Department intends for the Committee to continue to play a key role in formulating recommendations to address current global supply chain challenges, including identifying key bottlenecks in supply chains and actionable solutions to address them, advising on the latest advances in supply chain management technology and how to apply them to the current challenges in the economy, and developing long term recommendations to make supply chains for resilient. The Department seeks members who, by virtue of their current roles and past experience, bring a track record of effective senior executive leadership on issues impacting the U.S. and global supply chains.
ITA will accept nominations received by 5 p.m. on December 8, 2022, for membership on the Committee until the current two-year charter term ends November 9, 2023.
Richard Boll, Office of Supply Chain, Professional & Business Services, Room 11004, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; email:
Richard Boll, Office of Supply Chain, Professional & Business Services, Room 11004, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; email:
The Committee advises the Secretary on the necessary elements of a comprehensive policy approach to supply chain competitiveness designed to support national economic competitiveness and U.S. export growth, encouraging innovation, facilitate the movement of goods, and improve competitiveness of U.S. supply chains for goods and services in the domestic and global economy; and on regulatory policies and programs and investment priorities that affect the competitiveness of supply chains. The Committee provides detailed policy and technical advice, information, and recommendations to the Secretary regarding:
(1) national, state, or local factors in trade programs and policies that affect the efficient domestic and international operation and competitiveness of U.S. global supply chains from point of origin to destination;
(2) elements of national policies affecting the movement of goods, infrastructure, investment, and regulatory factors that affect supply chain competitiveness and sustainability; and
(3) information and data systems to generate metrics that can be used to quantify and improve supply chain performance.
The Department intends for the Committee to focus on the current challenges facing the supply chain during this charter term.
Members will be selected based on their demonstrated professional or personal qualifications and experience relevant to the functions and tasks of the Committee. Members shall be selected in a manner that ensures that the Committee remains balanced with respect to the diversity of the supply chain sector, including with regard to geographic location and company size. The diverse membership of the Committee ensures perspectives and expertise reflecting the full breadth of the Committee's responsibilities and, where possible, the Department of Commerce will also consider the ethnic, racial and gender diversity of the United States.
Members of the Committee shall represent companies, organizations, and stakeholders involved in the U.S. supply chain, with at least one individual representing each of the following: supply chain firms or their associations; users of supply chains (
Other than the experts from academia, all members shall serve in a representative capacity, expressing the views and interests of a U.S. company or U.S. organization with which they are affiliated (
Each member of the Committee must be a U.S. citizen and not registered as a foreign agent under the Foreign Agents Registration Act. All appointments are made without regard to political affiliation. Self-nominations will be accepted.
Members of the Committee will not be compensated for their services or reimbursed for their travel expenses. The Committee shall meet approximately quarterly, or as determined by the DFO. Members shall serve at the pleasure of the Secretary.
(1) Name, title, and relevant contact information (including phone and email address) of the individual requesting consideration; and
(2) An affirmative statement that the applicant is not required to register as a foreign agent under the Foreign Agents Registration Act of 1938.
(1) A sponsor letter on the letterhead of the sponsoring U.S. company or U.S. organization to be represented, containing a brief description why the nominee should be considered for membership; the nominee maybe and employee, director, or other representative of a company or organization; consideration will be given to the nominee's current affiliation with the company or organization to be represented, as well as prior experience with other companies of organizations that demonstrate the ability to contribute to the work of the Committee:
(2) Short biography of nominee including credentials;
(3) Brief description of the U.S. company or U.S. organization to be represented and its activities and size (number of employees or members and annual sales, if applicable); and
(4) An affirmative statement that the applicant meets all Committee eligibility requirements for representative members, including that the applicant represents a U.S. company or U.S. organization.
a. For purposes of Committee eligibility, a U.S. company is at least 51 percent owned by U.S. persons.
b. For purposes of Committee eligibility, a U.S. organization is controlled by U.S. persons, as determined based on its board of directors (or comparable governing body), membership, and funding sources, as applicable.
Please do not send company or organizational brochures.
(1) A description of the nominee's area(s) of expertise;
(2) A concise Curriculum Vitae (CV) or resume that covers education, experience, and relevant publications and summarizes how this expertise addresses supply chain competitiveness;
(3) An affirmative statement that the applicant meets all Committee eligibility requirements.
Nominations may be emailed to
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The U.S. Department of Commerce (Commerce) determines that the producer and/or exporter subject to this administrative review made sales of large diameter welded pipe from Canada in the United States at prices below normal value (NV) during the period of review (POR), May 1, 2020, through April 30, 2021.
Applicable November 23, 2022.
Irene Gorelik, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-6905
On June 6, 2022, Commerce published the preliminary results of this administrative review.
The product covered by this
All issues raised in the parties' case and rebuttal briefs are addressed in the Issues and Decision Memorandum and are listed in the appendix to this notice. The Issues and Decision Memorandum is a public document and is on-file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at
Based on comments received from interested parties regarding our
As a result of this review, we determine the following weighted-
Commerce
Commerce has determined, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with these final results of review.
Commerce's “automatic assessment” practice will apply to entries of subject merchandise during the POR produced by Evraz for which the company did not know that the merchandise it sold to the intermediary (
The following deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for Evraz Inc. NA will be equal to the weighted-average dumping margin that is established in the final results of this review; (2) for previously investigated or reviewed companies not subject to this review, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding in which the company participated; (3) if the exporter is not a firm covered in this review, a prior review, or the original less-than-fair-value (LTFV) investigation, but the producer is, the cash deposit rate will be the rate established for the most recently completed segment of the proceeding for the producer of the merchandise; and (4) the cash deposit rate for all other producers and exporters will continue to be 12.32 percent
This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during the POR. Failure to comply with this requirement could result in Commerce's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.
This notice also serves as a reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3), which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return or destruction of APO materials, or conversion to judicial protective order, is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.
We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19 CFR 351.221(b)(5).
International Trade Administration, U.S. Department of Commerce.
Notice of an open meeting.
The Renewable Energy and Energy Efficiency Advisory Committee (REEEAC or the Committee) will hold a hybrid meeting, accessible in-person and online, on Wednesday December 7, 2022, at the U.S. Department of Commerce in Washington, DC. The meeting is open to the public with registration instructions provided below. The meeting has a limited number of spaces for members of the public to attend in-person. Requests to attend in-person will be considered on a first-come first-served basis.
December 7, 2022, from approximately 9:30 a.m. to 3:30 p.m. Eastern Daylight Time EDT. Members of the public wishing to participate must register in advance with Cora Dickson at
To register, please contact Cora Dickson, Designated Federal Officer, Office of Energy and Environmental Industries (OEEI), Industry and Analysis, International Trade Administration, U.S. Department of Commerce at (202) 482-6083; email:
Cora Dickson, Designated Federal Officer, Office of Energy and Environmental Industries (OEEI), Industry and Analysis, International Trade Administration, U.S. Department of Commerce at (202) 482-6083; email:
On December 7, 2022, the REEEAC will hold the first meeting of its current charter term. The Committee, with officials from the Department of Commerce and other agencies, will discuss major issues affecting the competitiveness of the U.S. renewable energy and energy efficiency industries, determine sub-committee structure, and provide consultation on REEEAC leadership. An agenda will be made available by December 2, 2022 upon request to Cora Dickson.
The meeting will be open to the public and will be accessible to people with disabilities. All guests are required to register in advance by the deadline identified under the
A limited amount of time before the close of the meeting will be available for oral comments from members of the public attending the meeting. To accommodate as many speakers as possible, the time for public comments will be limited to two to five minutes per person (depending on number of public participants). Individuals wishing to reserve speaking time during the meeting must contact Cora Dickson using the contact information above and submit a brief statement of the general nature of the comments, as well as the name and address of the proposed participant, by 5:00 p.m. EDT on Friday, December 2, 2022. If the number of registrants requesting to make statements is greater than can be reasonably accommodated during the meeting, the International Trade Administration may conduct a lottery to determine the speakers. Speakers are requested to submit a copy of their oral comments by email to Cora Dickson for distribution to the participants in advance of the meeting.
Any member of the public may submit written comments concerning the REEEAC's affairs at any time before or after the meeting. Comments may be submitted via email to the Renewable Energy and Energy Efficiency Advisory Committee, c/o: Cora Dickson, Designated Federal Officer, Office of Energy and Environmental Industries, U.S. Department of Commerce;
Copies of REEEAC meeting minutes will be available within 30 days following the meeting.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of this sunset review, the U.S. Department of Commerce (Commerce) finds that revocation of the antidumping duty (AD) order on certain cased pencils (pencils) from the People's Republic of China (China) would be likely to lead to the continuation or recurrence of dumping at the level indicated in the “Final Results of Review” section of this notice.
Applicable November 23, 2022.
Katherine Johnson, AD/CVD Operations, Office VIII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230; telephone: (202) 482-4929.
On August 1, 2022, Commerce published the notice of initiation of the fifth sunset review of the
Commerce received complete substantive responses from Dixon and Musgrave/LaRose on August 26 and 31, 2022, respectively, within the 30-day
The merchandise covered by the
The subject merchandise is currently provided for in item 9609.10.10 of the Harmonized Tariff Schedule of the United States (HTSUS). While the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive.
All issues raised in this sunset review are addressed in the accompanying Issues and Decision Memorandum.
Pursuant to sections 751(c)(1) and 752(c)(1) and (3) of the Act, Commerce determines that revocation of the
This notice also serves as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.
We are issuing and publishing these final results and notice in accordance with sections 751(c), 752(c), and 777(i)(1) of the Act, and 19 CFR 351.218(e)(1)(ii)(C)(2) and 19 CFR 351.221(c)(5)(ii).
Office of Oceanic and Atmospheric Research (OAR), National Oceanic and Atmospheric Administration (NOAA), Department of Commerce (DOC).
Notice of public meeting.
This notice sets forth the schedule and proposed agenda for a meeting of the Ocean Exploration Advisory Board (OEAB). OEAB members will discuss and provide advice on the Federal ocean exploration program, with a particular emphasis on the topics identified in the section on Matters to Be Considered.
The announced meeting is scheduled for Tuesday, November 29, 2022 from 12 p.m.-3 p.m. (EST).
This will be a virtual meeting. Information about how to participate will be posted to the OEAB website at
Mr. David Turner, Designated Federal Officer, Ocean Exploration Advisory Board, National Oceanic and Atmospheric Administration,
NOAA established the OEAB under the Federal Advisory Committee Act (FACA) and legislation that gives the agency statutory authority to operate an ocean exploration program and to coordinate a national program of ocean exploration. The OEAB advises NOAA leadership on strategic planning, exploration priorities, competitive ocean exploration grant programs, and other matters as the NOAA Administrator requests.
OEAB members represent government agencies, the private sector, academic institutions, and not-for-profit institutions involved in all facets of ocean exploration—from advanced technology to citizen exploration.
In addition to advising NOAA leadership, NOAA expects the OEAB to help to define and develop a national program of ocean exploration—a network of stakeholders and partnerships advancing national priorities for ocean exploration.
The OEAB expects that public statements at its meetings will not be repetitive of previously submitted verbal or written statements. In general, each individual or group making a verbal presentation will be limited to three minutes. The Designated Federal Officer must receive written comments by November 27, 2022, to provide sufficient time for OEAB review. Written comments received after November 27, 2022, will be distributed to the OEAB but may not be reviewed prior to the meeting date. Comments should be submitted to Designated Federal Officer
United States Patent and Trademark Office, Department of Commerce; United States Copyright Office, Library of Congress.
Notice of inquiry; notice of public roundtables.
The United States Patent and Trademark Office (USPTO) and the United States Copyright Office (USCO) (collectively, the Offices) are conducting a joint study regarding issues of intellectual property (IP) law and policy associated with non-fungible tokens (NFTs). The Offices seek public comments on these matters to assist in their work on IP policy related to NFTs and in conducting the study. In addition, the Offices are announcing a series of three public roundtables to allow them to gather further input.
Kevin R. Amer, Senior Level Attorney, USPTO,
The USPTO and the USCO have been consulting with stakeholders and working on both U.S. and international policy relating to emerging technologies, such as NFTs. These efforts have been collaborative, and each office also engages in its own activities impacting its respective responsibilities. For example, USPTO's work in this area is being done as part of the USPTO's AI and Emerging Technology Partnership, see
In furtherance of the study and consultations, the Offices request public comments on the questions provided below. Commenters need not respond to every question and may provide comments that are relevant to the subject matter of this study but that are not encompassed by the questions. Following the close of the public comment period, the Offices will hold a series of three public roundtables to allow members of the public to provide further input.
To the extent that your responses contemplate a definition different from the Merriam-Webster definition, please provide your definition before answering the questions, and explain how it is relevant to your answers.
1. Please describe:
a. The current uses of NFTs in your field or industry, including the types of assets associated with NFTs (
b. Potential future applications of NFTs in your field or industry, including the types of assets that could be associated with NFTs (
2. Please describe any IP-related challenges or opportunities associated with NFTs or NFT markets.
3. Please describe how NFT markets affect the production of materials subject to IP protection.
4. Please describe whether, how, and to what extent NFTs are used by or could be used by IP rights holders (including those who hold trademarks, patents, and/or copyrights) to:
a. Document the authenticity of an asset;
b. Document the seller's ownership of or authority to sell an asset;
c. Document the seller's authority to transfer any relevant or necessary IP rights associated with an asset; and
d. Document any limitations related to IP rights surrounding the sale, or the purchaser's use, of an asset.
5. Please describe whether, how, and to what extent NFTs present challenges for IP rights holders, or those who sell assets using NFTs, with respect to the activities described in Question 4 above.
6. Please describe whether, how, and to what extent NFTs are used by, could be used by, or present challenges or opportunities for IP rights holders (including those who hold trademarks, patents, and/or copyrights) to:
a. Obtain their IP rights;
b. Transfer or license their IP rights;
c. Exercise overall control and management of their IP rights (
d. Enforce their IP rights, including any mechanisms that could mitigate infringement or help ensure compliance with contractual terms associated with the sale of an asset.
7. Please describe how and to what extent copyrights, trademarks, and patents are relied on, or anticipated to be relied on, in your field or industry to:
a. Protect assets that are associated with NFTs;
b. Combat infringement associated with NFT-related assets offered by third parties; and
c. Ensure the availability of appropriate reuse of NFT-related assets.
8. Are current IP laws adequate to address the protection and enforcement of IP in the context of NFTs? If not, please explain why, including any gaps in current IP laws, and describe any legislation you believe should be considered to address these issues.
9. Please describe any IP-related impacts those in your field or industry have experienced in connection with actual or intended uses of NFTs. When relevant, please describe any legal disputes that have arisen in the following contexts, and the outcome of such disputes, including citations to any relevant judicial proceedings:
a. The relationship between the transfer of an NFT and the ownership of IP rights in the associated asset;
b. The licensing of IP rights in the asset associated with an NFT;
c. Infringement claims when either (i) an NFT is associated with an asset in which another party holds IP rights, or (ii) IP rights in the asset associated with an NFT are owned by the NFT creator;
d. The type and/or scope of IP protection afforded to the NFT creator, including when that party is not the creator of the associated asset; and
e. The application of one or more of the exclusive rights under 17 U.S.C. 106 to transactions involving NFTs.
10. Please describe any instances you have observed in which a party has sent or received:
a. A notification of claimed copyright infringement, counternotice or material misrepresentation, pursuant to 17 U.S.C. 512, in connection with an NFT; and
b. Other IP-related legal claims seeking the removal or reinstatement of NFT-associated materials.
For each such instance, please describe the nature and outcome of this claim or process, including whether the material was ultimately removed, and if so, whether the material subsequently reappeared. If an infringement or 17 U.S.C. 512(f) action was filed, please provide citations to the court docket and any relevant judicial decisions.
11. Please describe the extent to which adjustments are being made to IP portfolio planning and management in light of the emergence of NFTs.
12. Please describe any experiences in seeking IP protection for, or use of, assets associated with NFTs in foreign jurisdictions.
13. Please identify any additional IP issues associated with NFTs that you believe the Offices should consider in conducting this study.
The Offices will hold three public roundtables focused, respectively, on copyrights, patents, and trademarks. The roundtables are not expected to address broad topics in cryptocurrency or decentralized systems generally, but rather only IP considerations as they relate to NFTs.
Members of the public interested in participating as a panelist in one or more roundtables must submit such a request to
The Offices will make every effort to ensure a broad range of stakeholder views are represented on the panels but may not be able to accommodate every request to participate. The Offices may also invite participation from individuals and entities who have not requested to participate. The submission of written comments in response to this notice is not a prerequisite to participation as a panelist in a roundtable.
The Offices will contact individuals selected to participate as panelists at the roundtables for additional information to aid in preparing for the roundtables. A tentative agenda for each roundtable will be posted at
The roundtables will be livestreamed, and the Offices will post a link and instructions for members of the public to register to view them live. The USPTO will host Roundtable 1 (patents) and Roundtable 2 (trademarks). Additional information regarding these roundtables and instructions for registering to view them will be posted at
Bureau of Consumer Financial Protection.
Notice and request for comment.
In accordance with the Paperwork Reduction Act of 1995 (PRA), the Consumer Financial Protection Bureau (Bureau or CFPB) is requesting the Office of Management and Budget's (OMB's) approval of a new information collection titled “Generic Information Collection Plan for Foundational Research about Consumer Credit Markets and Household Financial Decision-Making.”
Written comments are encouraged and must be received on or before January 23, 2023 to be assured of consideration.
You may submit comments, identified by the title of the information collection, OMB Control Number (see below), and docket number (see above), by any of the following methods:
•
•
•
Please note that comments submitted after the comment period will not be accepted. In general, all comments received will become public records, including any personal information provided. Sensitive personal information, such as account numbers or Social Security numbers, should not be included.
Documentation prepared in support of this information collection request is available at
Corporation for National and Community Service.
Notice of information collection; request for comment.
The Corporation for National and Community Service, operating as AmeriCorps, has submitted a public information collection request (ICR) entitled AmeriCorps Program Life Cycle Evaluation—Climate Change Bundled Evaluation for review and approval in accordance with the Paperwork Reduction Act.
Written comments must be submitted to the individual and office listed in the
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Copies of this ICR, with applicable supporting documentation, may be obtained by calling Jehyra Asencio Yace at AmeriCorps at 202-956-9736 or by email to
The OMB is particularly interested in comments which:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of CNCS, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions;
• Propose ways to enhance the quality, utility, and clarity of the information to be collected; and
• Propose ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
A 60-day notice requesting public comment was published in the
1. How do programs/members connect their work to climate change?
2. To what extent does the program include opportunities to increase equity?
3. To what extent is the program operating as intended?
4. What are some promising practices and challenges in implementing the climate change grant programs?
5. What were the barriers and facilitators to meet the intended outcomes of the program?
6. What are the lessons learned that can inform the field or be useful for practitioners that work in this space?
7. What is the likelihood that the program will be sustained beyond the grant?
8. How were the communities and community members impacted by climate change prior to the program?
9. What types of communities are being helped by the climate change grant programs?
10. To what extent are programs focused on vulnerable populations and communities?
11. What are the demographic characteristics of national service members (
12. What partner organizations are involved (
13. What is the breadth (number and type of partnership), quality, and quantity of the partnership(s) (number and frequency of joint activities and the strength)?
14. How were partnerships built and maintained?
15. How do grantee and sponsor organizations work with partners to build community resilience?
16. To what extent do the climate change grant programs: (a.) improve energy efficiency and increase the use of renewable energy sources? (b.) help communities prepare, respond, and recover from natural disasters and other climate change effects? (c.) preserve public lands and waterways and protect or restore biodiversity? (d.) increase community members' knowledge, attitudes, and behaviors around climate change? (e.) build capacity of the community to be resilient?
17. How do the climate change grant programs lead to increased civic engagement?
18. In what ways does participation in the climate change grant programs influence national service members' job skills development toward green jobs?
19. To what extent does participation in the climate change grant programs: (a.) increase national service members' functional and technical job skills? (b.) increase national service members' interest/willingness to pursue a career in a green job? (c.) lead to a job after their service? (d.) lead to a career in a green job after their service?
This bundled evaluation of grantees is being conducted by ICF through a contract with AmeriCorps; it will have an explicit emphasis on activities related to addressing climate change. By bundling, this evaluation combines a group of state commissions with similar program approaches into a single evaluation. Spanning 32 months, the evaluation includes up to 30 grantees to examine program design, implementation, and outcomes using surveys, interviews, and focus groups with a wide range of stakeholders including grantee staff, partner organizations, national service members, and community members. This is a new information collection.
Defense Acquisition Regulations System; Department of Defense (DoD).
Notice.
The Defense Acquisition Regulations System has submitted to OMB for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by December 23, 2022.
DoD uses the following DFARS provisions and clauses in solicitations and contracts to require offerors and contractors to identify and mark data or software requiring protection from unauthorized use, release, or disclosure in accordance with 10 U.S.C. 2320:
252.227-7013, Rights in Technical Data—Noncommercial Items.
252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation.
252.227-7017, Identification and Assertion of Use, Release, or Disclosure Restrictions.
252.227-7018, Rights in Noncommercial Technical Data and Computer Software—Small Business Innovation Research (SBIR) Program.
In accordance with 10 U.S.C. 2320(a)(2)(D), DoD may disclose limited rights data to persons outside the Government, or allow those persons to use data with use, release, or disclosure restrictions, if the recipient agrees not to further release, disclose, or use the data. Therefore, the clause at DFARS 252.227-7013, Rights in Technical Data—Noncommercial Items, requires the contractor to identify and mark data or software that it provides with limited rights.
In accordance with 10 U.S.C. 2321(b), contractors and subcontractors at any tier must be prepared to furnish written justification for any asserted restriction on the Government's rights to use or release data. The following DFARS clauses require contractors and subcontractors to maintain adequate records and procedures to justify any asserted restrictions:
252.227-7019, Validation of Asserted Restrictions—Computer Software.
252.227-7037, Validation of Restrictive Markings on Technical Data.
In accordance with 10 U.S.C. 2320, DoD must protect the rights of contractors that have developed items, components, or processes exclusively at private expense. Therefore, the clause at DFARS 252.227-7025, Limitations on the Use or Disclosure of Government-Furnished Information Marked with Restrictive Legends, requires a contractor or subcontractor to submit a use and non-disclosure agreement when it obtains data from the Government to which the Government has less than unlimited rights. In addition, DFARS 227.7103-7, Use and non-disclosure agreement, requires intended recipients
The provision at DFARS 252.227-7028, Technical Data or Computer Software Previously Delivered to the Government, requires an offeror to identify any technical data or computer software that it previously delivered, or will deliver, under any Government contract. DoD needs this information to avoid paying for rights in technical data or computer software that the Government already owns.
Comments and recommendations on the proposed information collection should be sent to Ms. Susan Minson, DoD Desk Officer, at
You may also submit comments, identified by docket number and title, by the following method: Federal eRulemaking Portal:
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by December 23, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Under Secretary of Defense for Personnel and Readiness, Department of Defense (DoD).
Notice of Federal Advisory Committee meeting.
The DoD is publishing this notice to announce that the following Federal Advisory Committee meeting of the DACMPT will take place.
Day 1—Open to the public Thursday, December 15, 2022 from 8:30 a.m. to 5:15 p.m., Pacific Time.
Day 2—Open to the public Friday, December 16, 2022 from 8:30 a.m. to 1:30 p.m., Pacific Time.
Venue to-be-determined (TBD). Meeting details will be posted on:
Designated Federal Officer (DFO), Dr. Sofiya Velgach, (703) 697-9271 (Voice), 703 614-9272 (Facsimile),
This meeting is being held under the provisions of the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C. Appendix, as amended), the Government in the Sunshine Act of 1976 (5 U.S.C. 552b, as amended), and 41 Code of Federal Regulations (CFR) 102-3.140 and 102-3.150.
Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)), Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by December 23, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Department of the Navy, Department of Defense (DoD).
30-Day information collection notice.
The DoD has submitted to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act.
Consideration will be given to all comments received by December 23, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Angela Duncan, 571-372-7574,
You may also submit comments and recommendations, identified by Docket ID number and title, by the following method:
•
Requests for copies of the information collection proposal should be sent to Ms. Duncan at
Federal Student Aid, Department of Education.
Notice; correction.
On January 31, 2022, the Department of Education (Department) published in the
This correction is applicable on November 23, 2022.
Shannon Mahan, Division Chief, Grants & Campus-Based Partner Division, U.S. Department of Education, Federal Student Aid, 830 First Street NE, Union Center Plaza, Room 64C4, Washington, DC 20202-5453. Telephone: (202) 377-3019. Email:
If you are deaf, hard of hearing, or have a speech disability and wish to access telecommunications relay services, please dial 7-1-1.
On January 31, 2022, the Department published the Deadline Dates notice (87 FR 4871). On February 11, 2022, the Department published a correction to the Deadline Dates notice (87 FR 8007). The Department is further correcting the Deadline Dates notice by changing the mailing addresses for submission of documents, to reflect the updated mailing address information for the Common Origination and Disbursement (COD) School Relations Center provided in the Department's Electronic Announcement (GEN-22-48), published on July 25, 2022. All other information in the Deadline Dates notice remains the same.
In FR Doc 2022-01897 on pages 4871-4873 of the
1. On page 4872, in item 2 of the table, under the heading “How is it submitted?”:
A. Remove the mailing address following the words “mailed to:” and add, in its place, the following mailing address: “FISAP Administrator, U.S. Department of Education, P.O. Box 1130, Fairfax, VA 22038”.
B. Remove the mailing address following the words “mail to:” and add, in its place, the following mailing address: “FISAP Administrator, 4050 Legato Road #1100, Fairfax, VA 22033”.
2. On page 4872, in item 3 of the table, under the heading “How is it submitted?”:
A. Remove the mailing address following the words “mailed to:” and add, in its place, the following mailing address: “FISAP Administrator, U.S. Department of Education, P.O. Box 1130, Fairfax, VA 22038”.
B. Remove the mailing address following the words “mail to:” and add, in its place, the following mailing address: “FISAP Administrator, 4050 Legato Road #1100, Fairfax, VA 22033”.
3. On page 4872, in item 4 of the table, under the heading “How is it submitted?”:
A. Remove the mailing address following the words “mailed to:” and add, in its place, the following mailing address: “FISAP Administrator, U.S. Department of Education, P.O. Box 1130, Fairfax, VA 22038”.
B. Remove the mailing address following the words “mail to:” and add, in its place, the following mailing address: “FISAP Administrator, 4050 Legato Road #1100, Fairfax, VA 22033”.
4. On page 4872, in item 5 of the table, revise the text under the heading “How is it submitted?” to read as follows:
The application and agreement must be submitted electronically through the Common Origination and Disbursement website at
FISAP Administrator, U.S. Department of Education, P.O. Box 1130, Fairfax, VA 22038
Or for overnight delivery, FISAP Administrator, 4050 Legato Road #1100, Fairfax, VA 22033.
5. On page 4872, in item 9 of the table, under the heading “How is it submitted?”:
A. Remove the mailing address following the words “mailed to:” and add, in its place, the following mailing address: “FISAP Administrator, U.S. Department of Education, P.O. Box 1130, Fairfax, VA 22038”.
B. Remove the mailing address following the words “mail to:” and add, in its place, the following mailing address: “FISAP Administrator, 4050 Legato Road #1100, Fairfax, VA 22033”.
You may also access documents of the Department published in the
Federal Student Aid (FSA), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing an extension without change of a currently approved information collection request (ICR).
Interested persons are invited to submit comments on or before December 23, 2022.
Written comments and recommendations for proposed information collection requests should be submitted within 30 days of publication of this notice. Click on this link
For specific questions related to collection activities, please contact Beth Grebeldinger, (202) 377-4018.
The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Elementary and Secondary Education (OESE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act (PRA) of 1995, the Department is proposing a new information collection request (ICR).
Interested persons are invited to submit comments on or before January 23, 2023.
To access and review all the documents related to the information collection listed in this notice, please use
For specific questions related to collection activities, please contact John McLaughlin, (202) 401-0962.
The Department, in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. The Department is soliciting comments on the proposed information collection request (ICR) that is described below. The Department is especially interested in public comment addressing the following issues: (1) is this collection necessary to the proper functions of the Department; (2) will this information be
Specifically, the Department is seeking to learn about the distribution of ARP-HCY funds by SEAs, the characteristics of LEAs receiving funds, and the characteristics of LEAs who chose not to participate in the distribution of funds in each state. Additionally, the Department would like to gather information on how SEAs are using the funds that were set aside at the State level of the program and how LEAs are using funds received from this program.
This is a request for a new collection, the ARP-HCY National Study, which will utilize a survey of all SEAs (ARP-HCY SEA Survey) and a representative sample of state and national LEAs (ARP-HCY LEA Survey) to answer evaluation research questions.
U.S. Election Assistance Commission (EAC).
Notice of vacancy.
Pursuant to 52 U.S.C. 20961 and the Charter of the EAC Technical Guidelines Development Committee (TGDC), the EAC is posting this notice of vacancy. Any vacancy in the TGDC shall be filled in the manner in which the original appointment was made. The vacancy shall be filled jointly by the EAC and the Director of the National Institute of Standards and Technology (NIST).
Pursuant to the TGDC Charter, the EAC will post the notice on the EAC website:
The Technical Guidelines Development Committee (TGDC) is a non-discretionary Federal Advisory Committee established by the Help America Vote Act of 2002 (HAVA), Public Law 107-252, 116 Stat. 1666 (2002). The TGDC assists the EAC in developing the Voluntary Voting System Guidelines (VVSG). The chairperson of the TGDC is the director of the National Institute of Standards and Technology (NIST). The TGDC is composed of 14 other members appointed jointly by EAC and the director of NIST.
HAVA mandates that the 14 other members appointed jointly by the EAC and NIST must include an equal number of members of the EAC Standards Board, members of the EAC Board of Advisors, and members of the Architectural and Transportation Barrier Compliance Board. The TGDC Charter requires that notice of vacancies on the Committee for those individuals jointly appointed by EAC and NIST will be published in the
Take notice that on December 17, 2022, the Commission will be deploying a new version of eTariff that will reject filings containing tariff records that duplicate a previously used Version number. The eTariff Implementation Guide requires a unique version number for a tariff record,
This error code will be added to the Validation Error Codes posted on the Commission's eTariff website (
For more information, contact the eTariff Advisory Staff at
Take notice that on November 7, 2022, Columbia Gas Transmission, LLC (Columbia), 700 Louisiana Street, Suite 1300, Houston, Texas 77002, filed in the above referenced docket, a prior notice pursuant to Section 157.205, 157.208 and 157.216 of the Federal Energy Regulatory Commission's regulations under the Natural Gas Act and the blanket certificate issued by the Commission in Docket No. CP83-76-000,
Columbia asserts that Replacing Line R300 with new pipeline will ensure compliance with the Pipeline and Hazardous Materials Safety Administration and enable Columbia to continue to provide reliable, safe, and efficient service. The proposed construction is estimated to cost approximately $3,700,000 all as more fully set forth in the request which is on file with the Commission and open to public inspection.
In addition to publishing the full text of this document in the
Any questions concerning this application should be directed to David A. Alonzo, Manager, Project Authorizations, Columbia Gas Transmission, LLC, 700 Louisiana Street, Suite 1300, Houston, Texas, 77002, by telephone (832) 320-5477, or by email
There are three ways to become involved in the Commission's review of this project: you can file a protest to the project, you can file a motion to intervene in the proceeding, and you can file comments on the project. There is no fee or cost for filing protests, motions to intervene, or comments. The deadline for filing protests, motions to intervene, and comments is 5:00 p.m. Eastern Time on January 16, 2023. How to file protests, motions to intervene, and comments is explained below.
Pursuant to section 157.205 of the Commission's regulations under the NGA,
Protests must comply with the requirements specified in section 157.205(e) of the Commission's regulations,
Any person has the option to file a motion to intervene in this proceeding. Only intervenors have the right to request rehearing of Commission orders issued in this proceeding and to subsequently challenge the Commission's orders in the U.S. Circuit Courts of Appeal.
To intervene, you must submit a motion to intervene to the Commission in accordance with Rule 214 of the Commission's Rules of Practice and Procedure
All timely, unopposed motions to intervene are automatically granted by operation of Rule 214(c)(1). Motions to intervene that are filed after the intervention deadline are untimely and may be denied. Any late-filed motion to intervene must show good cause for being late and must explain why the time limitation should be waived and provide justification by reference to factors set forth in Rule 214(d) of the Commission's Rules and Regulations. A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies (paper or electronic) of all documents filed by the applicant and by all other parties.
Any person wishing to comment on the project may do so. The Commission considers all comments received about the project in determining the appropriate action to be taken. To ensure that your comments are timely and properly recorded, please submit your comments on or before January 16, 2023. The filing of a comment alone will not serve to make the filer a party to the proceeding. To become a party, you must intervene in the proceeding.
There are two ways to submit protests, motions to intervene, and comments. In both instances, please reference the Project docket number CP23-13-000 in your submission.
(1) You may file your protest, motion to intervene, and comments by using the Commission's eFiling feature, which is located on the Commission's website (
(2) You can file a paper copy of your submission. Your submission must reference the Project docket number CP23-13-000.
Protests and motions to intervene must be served on the applicant either by mail or email (with a link to the document) at: David A. Alonzo, Manager, Project Authorizations, Columbia Gas Transmission, LLC, 700 Louisiana Street, Suite 1300, Houston, Texas 77002, by telephone (832) 320-5477, or by email
Throughout the proceeding, additional information about the project will be available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. For more information and to register, go to
Take notice that on November 10, 2022, Western Area Power Administration submits tariff filing per 300.10: UGP_PSMBP-ED_WAPA203-20220621 to be effective 1/1/2023.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
In addition to publishing the full text of this document in the
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental impact statement (EIS) that will discuss the environmental impacts of the Texas to Louisiana Energy Pathway Project (Project) involving construction and operation of facilities by Transcontinental Gas Pipe Line Company, LLC (Transco) in Fort Bend and Hardin Counties, Texas. The Commission will use this EIS in its decision-making process to determine whether the Project is in the public convenience and necessity. The schedule for preparation of the EIS is discussed in the Schedule for Environmental Review section of this notice.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies regarding the project. As part of the National Environmental Policy Act (NEPA) review process, the Commission takes into account concerns the public may have about proposals and the environmental impacts that could result from its action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. This gathering of public input is referred to as “scoping.” The main goal of the scoping process is to focus the analysis in the environmental document on the
By this notice, the Commission requests public comments on the scope of issues to address in the environmental document, including comments on potential alternatives and impacts, and any relevant information, studies, or analyses of any kind concerning impacts affecting the quality of the human environment. To ensure that your comments are timely and properly recorded, please submit your comments so that the Commission receives them in Washington, DC on or before 5:00 p.m. Eastern Time on December 16, 2022. Comments may be submitted in written or oral form. Further details on how to submit comments are provided in the Public Participation section of this notice.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to construct, operate, and maintain the proposed facilities. The company would seek to negotiate a mutually acceptable easement agreement. You are not required to enter into an agreement. However, if the Commission approves the Project, the Natural Gas Act conveys the right of eminent domain to the company. Therefore, if you and the company do not reach an easement agreement, the pipeline company could initiate condemnation proceedings in court. In such instances, compensation would be determined by a judge in accordance with state law. The Commission does not grant, exercise, or oversee the exercise of eminent domain authority. The courts have exclusive authority to handle eminent domain cases; the Commission has no jurisdiction over these matters.
Transco provided landowners with a fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” which addresses typically asked questions, including the use of eminent domain and how to participate in the Commission's proceedings. This fact sheet along with other landowner topics of interest are available for viewing on the FERC website (
There are four methods you can use to submit your comments to the Commission. The Commission encourages electronic filing of comments and has staff available to assist you at (866) 208-3676 or
(1) You can file your comments electronically using the eComment feature, which is located on the Commission's website (
(2) You can file your comments electronically by using the eFiling feature, which is also on the Commission's website (
(3) You can file a paper copy of your comments by mailing them to the Commission. Be sure to reference the project docket number (CP22-495-000) on your letter. Submissions sent via the U.S. Postal Service must be addressed to: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE, Room 1A, Washington, DC 20426. Submissions sent via any other carrier must be addressed to: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville, Maryland 20852; and
(4) In lieu of sending written comments, the Commission invites you to attend the public scoping session its staff will conduct in the project area, scheduled as follows:
The primary goal of these scoping sessions is to have you identify the specific environmental issues and concerns that should be considered in the environmental document. Individual oral comments will be taken on a one-on-one basis with a court reporter. This format is designed to receive the maximum amount of oral comments in a convenient way during the timeframe allotted.
The scoping session is scheduled from 5:00 p.m. to 8:00 p.m. Central Time Zone. You may arrive at any time after 5:00 p.m. There will not be a formal presentation by Commission staff when the session opens. If you wish to speak, the Commission staff will hand out numbers in the order of your arrival. Comments will be taken until 8:00 p.m. However, if no additional numbers have been handed out and all individuals who wish to provide comments have had an opportunity to do so, staff may conclude the session at 7:30 p.m. Please see appendix 2 for additional information on the session format and conduct.
Your scoping comments will be recorded by a court reporter (with FERC staff or representative present) and become part of the public record for this proceeding. Transcripts will be publicly available on FERC's eLibrary system (see the last page of this notice for instructions on using eLibrary). If a significant number of people are interested in providing oral comments in the one-on-one settings, a time limit of 5 minutes may be implemented for each commentor. Although there will not be a formal presentation, Commission staff will be available throughout the scoping session to answer your questions about the environmental review process.
It is important to note that the Commission provides equal consideration to all comments received, whether filed in written form or provided orally at a scoping session.
Additionally, the Commission offers a free service called eSubscription. This service provides automatic notification of filings made to subscribed dockets, document summaries, and direct links to the documents. Go to
Transco proposes to construct and operate one new compressor station and modify one existing compressor station. The Project would increase the firm capacity of the system from 171,400 dekatherms per day (Dth/day) to 364,400 Dth/day. According to Transco,
The Project would consist of the following facilities:
• construction of a new 15,900-horsepower compressor station in Fort Bend County, Texas, consisting of a natural gas-fired turbine-driven compression unit with cooling (Compressor Station 33);
• modification of six existing compressors at Compressor Station 40 in Hardin County, Texas, to accommodate new flow conditions resulting from the Project; and
• programming updates (not involving the installation of any facilities or any ground disturbance) at existing Compressor Station 23 in Victoria County, Texas, to allow for enhanced system operation in the northbound direction.
The general location of the Project facilities is shown in appendix 1.
Based on the environmental information provided by Transco, construction of the proposed facilities would disturb about 72 acres of land for the aboveground facilities. Following construction, Transco would maintain about 17 acres for operation of the proposed new Project facilities; the remaining acreage would be restored and revert to former uses. During construction of the aboveground facility, the temporary workspace would be utilized for contractor staging areas. No off-site contractor yards or staging areas would be required for construction of the Project. Existing public roads would be used to access the proposed compressor station site, and no new temporary or permanent access roads are proposed.
Based on an initial review of Transco's proposal, Commission staff have identified several expected impacts that deserve attention in the EIS. The Project would result in impacts on air quality resulting from construction and operational emissions of greenhouse gases, and potentially from downstream emissions resulting from the increased firm capacity of the system. Additionally, the Project is within one environmental justice community and is within 0.5 mile of another environmental justice community. Only agricultural land would be impacted by the Project. It is not anticipated that the Project would impact waterbodies, wetlands, or archeological sites.
The EIS issued by the Commission will discuss impacts that could occur as a result of the construction and operation of the proposed Project under the relevant general resource areas:
• geology and soils;
• water resources and wetlands;
• vegetation and wildlife;
• threatened and endangered species;
• cultural resources;
• socioeconomics and environmental justice;
• land use;
• air quality and noise; and
• reliability and safety.
Commission staff will also make recommendations on how to lessen or avoid impacts on the various resource areas. Your comments will help Commission staff focus its analysis on the issues that may have a significant effect on the human environment.
The EIS will present Commission staff's independent analysis of the issues. As of the date of this notice, there are no cooperating agencies in the preparation of the EIS.
The EIS will evaluate reasonable alternatives that are technically and economically feasible and meet the purpose and need for the proposed action.
• the no-action alternative, meaning the Project is not implemented;
• system alternatives, including alternative system configurations, pipeline loops, and alternative compression configurations; and
• site location alternatives for the new compressor station.
With this notice, the Commission requests specific comments regarding any additional potential alternatives to the proposed action or segments of the proposed action. Please focus your comments on reasonable alternatives (including alternative facility sites and pipeline routes) that meet the Project objectives, are technically and economically feasible, and avoid or lessen environmental impact.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, the Commission is using this notice to initiate consultation with the applicable State Historic Preservation Office(s), and other government agencies, interested Indian tribes, and the public to solicit their views and concerns regarding the Project's potential effects on historic properties.
On August 23, 2022, the Commission issued its Notice of Application for the Project. Among other things, that notice alerted other agencies issuing federal authorizations of the requirement to complete all necessary reviews and to reach a final decision on the request for a federal authorization within 90 days of the date of issuance of the Commission staff's final EIS for the Project. This notice identifies the Commission staff's planned schedule for completion of the final EIS for the Project, which is based on an issuance of the draft EIS in June 2023.
If a schedule change becomes necessary for the final EIS, an additional notice will be provided so that the relevant agencies are kept informed of the Project's progress.
The table below lists the anticipated permits and authorizations for the Project required under federal law. This list may not be all-inclusive and does not preclude any permit or authorization if it is not listed here. Agencies with jurisdiction by law and/or special expertise may formally cooperate in the preparation of the Commission's EIS and may adopt the EIS to satisfy its NEPA responsibilities related to this Project. Agencies that would like to request cooperating agency status should follow the instructions for filing comments provided under the Public Participation section of this notice.
This notice is being sent to the Commission's current environmental mailing list for the Project which includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for Project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the Project and includes a mailing address with their comments. Commission staff will update the environmental mailing list as the analysis proceeds to ensure that Commission notices related to this environmental review are sent to all individuals, organizations, and government entities interested in and/or potentially affected by the proposed Project. State and local government representatives should notify their constituents of this proposed Project and encourage them to comment on their areas of concern.
If you need to make changes to your name/address, or if you would like to remove your name from the mailing list, please complete one of the following steps:
(1) Send an email to
(2) Return the attached “Mailing List Update Form” (appendix 2).
Additional information about the Project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC website at
Public sessions or site visits will be posted on the Commission's calendar located at
FERC is conducting the session to solicit your scoping comments. There will
• Tickets are handed out on a “first come, first serve” basis starting at the time listed in the Notice.
• Individuals are called in ticket number order to provide oral comments to be transcribed by a court reporter for the public record.
• Time limits on oral comments may be enforced to ensure that all those wishing to comment have the opportunity to do so within the designated session time.
• Written comments may be submitted in addition to, or in lieu of, oral comments.
• Additional materials about FERC and the environmental review process are available at information stations at the session.
Proper conduct will help the sessions maintain a respectful atmosphere for attendees to learn about the FERC Environmental Review Process and to be able to provide comments effectively.
• Loudspeakers, lighting, oversized visual aids, or other visual or audible disturbances are not permitted.
• Disruptive video and photographic equipment may not be used.
• Conversations should be kept to a reasonable volume. Attendees should be respectful of those providing oral comments to the court reporters.
• Recorded interviews are not permitted within the session space.
FERC reserves the right to end the session if disruptions interfere with the opportunity for individuals to provide oral comments or if there is a safety or security risk.
Take notice that the following hydroelectric proceeding has been initiated by the Commission:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. Deadline for filing comments, motions to intervene and protests: December 16, 2022.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
k.
l.
In this proceeding, after notice and opportunity for hearing, the Commission may find cause to reopen the annual license terms to require changes in the project works or operations that may be necessary to protect federally listed species.
m.
n. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
o.
p.
1. On June 14, 2022, the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO), submitted a petition seeking approval of proposed Reliability Standards FAC-001-4 (Facility Interconnection Requirements) and FAC-002-4 (Facility Interconnection Studies) (collectively, the FAC Reliability Standards).
2. Section 215 of the FPA provides that the Commission may certify an ERO, the purpose of which is to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval.
3. On June 14, 2022, NERC submitted a petition seeking approval of the FAC Reliability Standards. NERC also requested that the Commission approve the associated violation risk factors and violation severity levels, the proposed implementation plan, and the retirement of the currently effective versions of the FAC Reliability Standards immediately prior to the effective date of the revised FAC Reliability Standards.
4. NERC explains that the proposed modifications to the FAC Reliability Standards stem from recommendations in the NERC Inverter-Based Resource Performance Task Force's
5. Second, NERC explains that the proposed FAC Reliability Standards identify the planning coordinator as the entity responsible for developing a uniform definition of “qualified change” that describes the changes to interconnected Facilities that must be addressed in interconnection requirements and studies under the FAC Reliability Standards. NERC states that planning coordinators “are encouraged to coordinate with other entities in developing their definitions.”
6. NERC proposes an implementation plan for the proposed FAC Reliability Standards. The proposed implementation plan provides that the proposed FAC Reliability Standards would become effective on the first day of the first calendar quarter that is 12 months after applicable regulatory approval and that the currently effective versions of the standards would be retired immediately prior to the effective date of the revised FAC Reliability Standards.
7. Finally, NERC proposes modifications to the associated violation risk factors and violation severity levels for these FAC Reliability Standards. The changes are mostly clarifications in the violation severity levels to match changes in Requirement language. One new violation risk factor and violation severity level assignment was added for new Requirement R6 in FAC-002-4.
8. Notice of NERC's June 14, 2022, petition was published in the
9. Pursuant to section 215(d)(2) of the FPA, we approve the FAC Reliability Standards as just, reasonable, not unduly discriminatory or preferential and in the public interest. We conclude that the proposed FAC Reliability Standards are an improvement over the currently effective Reliability Standards FAC-001-3 and FAC-002-3 and will improve Bulk-Power System reliability by helping to ensure that changes to existing interconnected facilities that have reliability impacts are properly addressed in interconnection requirements and studies. We find that proposed Reliability Standard FAC-002-4 Requirement R6 will avoid potential disputes over changes to facilities that require additional study by authorizing the planning coordinator to define the term “qualified change” and requiring public posting of the definition. Replacing “materially modify” with “qualified change” also removes the possibility of confusion with the Commission's defined term “Material Modification” in its
10. We also approve the proposed implementation plan. The implementation plan provides that the proposed FAC Reliability Standards would become effective on the first day of the first calendar quarter that is 12 months after applicable regulatory approval and an additional 12 months under certain circumstances. We find that the proposed implementation plan provides a reasonable period of time for entities to comply with the new requirements and strikes an appropriate balance with the urgency to implement the proposed FAC Reliability Standards.
11. Finally, we approve NERC's proposed clarifying revisions to the existing violation risk factor and violation severity level assignments for these FAC Reliability Standards, as well as the new violation risk factor and violation severity level assignment to Requirement R6 in FAC-002-4.
12. In compliance with the requirements of the Paperwork Reduction Act of 1995, 44 U.S.C. 3506(c)(2)(A), the Commission is soliciting public comment on FAC Reliability Standards; and the new collection FERC-725D(1),
13. The information collection requirements are subject to review by the OMB under the Paperwork Reduction Act at 44 U.S.C. 3507(d). OMB's regulations at CFR 1320.11 require approval of certain information collection requirements imposed by agency rules.
14. Please send comments concerning the collection of information and the associated burden estimates to OMB through
15. Please submit copies of your comments (identified by Docket No. RD22-5-000) to the Commission as noted below. Electronic filing through
For those unable to file electronically, comments may be filed by USPS mail or by hand (including courier) delivery.
a.
b.
16.
17.
18.
19.
20.
21.
22.
23.
24. Respondents have already provided information under 725D. The proposed new collection FERC-725D1 would result in a minor additional burden to planning coordinators, due to the requirement that they develop the definition of “qualified change” for new and existing interconnections of generation, transmission or electricity end user facilities. This burden would be expected to be greater in years one and two than in year three and beyond for FAC-002-4. No change in burden is estimated for applicable entities for FAC-001-4 as their responsibilities will remain the same.
25. The number of respondents below is based on an estimate of the NERC compliance registry for planning coordinators (63). The Commission based its paperwork burden estimates on the NERC compliance registry as of September 16, 2022.
—Electrical engineer (OC 17-2071) $77.02
—Information/Record clerks (OC 43-4199) $42.35
The average hourly burden for this collection is $59.69 [($77.02 + $42.35)/2 = $59.69] and is rounded to $60.00 an hour.
26. In addition to publishing the full text of this document in the
27. From the Commission's Home Page on the internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.
28. User assistance is available for eLibrary and the Commission's website during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at
The Commission hereby approves Reliability Standards FAC-001-4 and FAC-002-4, their associated violation risk factors and violation severity levels, implementation plan, and the retirement of the currently effective Reliability Standards FAC-001-3 and FAC-002-3 immediately prior to the effective date of the revised Reliability Standards, as discussed in the body of this order.
By the Commission.
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that on November 14, 2022, Rough Rider Operating LLC filed a petition seeking a temporary waiver of the tariff filing and reporting requirements of sections 6 and 20 of the Interstate Commerce Act and parts 341 and 357 of the Federal Energy Regulatory Commission's regulations (Commission), all as more fully explained in the petition.
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214. Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. Anyone filing a motion to intervene, or protest must serve a copy of that document on the Petitioner.
In addition to publishing the full text of this document in the
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
Take notice that the following hydroelectric application has been filed with Commission and is available for public inspection:
a.
b.
c.
d.
e.
f. Location: On the Boise River, near the city of Boise, Ada County, Idaho. The project does not occupy federal land.
g.
h.
i.
j.
The Commission strongly encourages electronic filing. Please file scoping comments using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all interveners filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervener files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k. This application is not ready for environmental analysis at this time.
l.
m. A copy of the application can be viewed on the Commission's website at
You may also register online at
n.
Commission staff will conduct one agency scoping meeting and one public meeting. The agency scoping meeting will focus on resource agency and non-governmental organization (NGO) concerns, while the public scoping meeting is primarily for public input. All interested individuals, organizations, and agencies are invited to attend one or both of the meetings, and to assist the staff in identifying the scope of the environmental issues that should be analyzed in the NEPA document. The times and locations of these meetings are as follows:
Copies of the Scoping Document (SD1) outlining the subject areas to be addressed in the NEPA document were distributed to the parties on the Commission's mailing list. Copies of the SD1 will be available at the scoping meeting or may be viewed on the web at
The licensees and Commission staff will conduct a project Environmental Site Review beginning at 1:00 p.m. on November 29, 2022. All interested individuals, organizations, and agencies are invited to attend. All participants should meet at the Barber Dam Project at 5201 E Sawmill Way, Boise, ID 83716. Anyone with questions about the environmental site review should contact Kevin Webb at (978) 935-6039 or
At the scoping meetings, the staff will: (1) summarize the environmental issues tentatively identified for analysis in the NEPA document; (2) solicit from the meeting participants all available information, especially quantifiable data, on the resources at issue; (3) encourage statements from experts and the public on issues that should be analyzed in the NEPA document, including viewpoints in opposition to, or in support of, Commission staff's preliminary views; (4) determine the resource issues to be addressed in the NEPA document; and (5) identify those issues that require a detailed analysis, as well as those issues that do not require a detailed analysis.
The meetings are recorded by a stenographer and become part of the formal record of the Commission proceeding on the project.
Individuals, organizations, and agencies with environmental expertise and concerns are encouraged to attend the meeting and to assist Commission staff in defining and clarifying the issues to be addressed in the NEPA document.
Take notice that on November 10, 2022, Western Area Power Administration submits tariff filing per
Any person desiring to intervene or to protest this filing must file in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211, 385.214). Protests will be considered by the Commission in determining the appropriate action to be taken, but will not serve to make protestants parties to the proceeding. Any person wishing to become a party must file a notice of intervention or motion to intervene, as appropriate. Such notices, motions, or protests must be filed on or before the comment date. On or before the comment date, it is not necessary to serve motions to intervene or protests on persons other than the Applicant.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
In addition to publishing the full text of this document in the
On Thursday, December 1, 2022, Commission staff will hold a technical conference to provide clarification to Scott's Mill Hydro, LLC regarding deficiencies in the final license application and additional information needs identified by Commission staff for the proposed Scott's Mill Hydroelectric Project No. 14867.
The technical conference will begin at 9:30 a.m. Eastern Standard Time. The conference will be held at the Federal Energy Regulatory Commission headquarters building located at 888 1st Street NE, Washington, DC, and will include teleconference capabilities. Discussion topics for the technical conference are included in Appendix A.
All local, state, and federal agencies, Indian tribes, and other interested parties are invited to participate. There will be no transcript of the conference, but a summary of the meeting will be prepared for the project record. If you are interested in participating in the meeting you must contact Jody Callihan at (202) 502-8278 or
Federal Energy Regulatory Commission, DOE.
Notice of information collection and request for comments.
In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on the currently approved information collection, FERC-550 (Oil Pipeline Rates—Tariff Filings and Depreciation Studies), which will be submitted to the Office of Management and Budget (OMB) for review. The Commission received no comments on the 60 Day Notice.
Comments on the collection of information are due December 23, 2022.
Send written comments on FERC-550 to the Office of Management and Budget (OMB) through
Please submit copies of your comments (identified by Docket No. IC22-34-000 and FERC-550) to the Commission as noted below. Electronic filing through
•
• For those unable to file electronically, comments may be filed by USPS mail or by hand (including courier) delivery:
Mail via U.S. Postal Service only, addressed to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE, Washington, DC 20426.
Hand (including courier) delivery to: Federal Energy Regulatory Commission, 12225 Wilkins Avenue, Rockville, MD 20852.
Please reference the specific collection number(s) (FERC-550) and/or title(s) (Oil Pipeline Rates—Tariff Filings and Depreciation Studies) in your comments.
Ellen Brown may be reached by email at
• Regulation of rates and practices of oil pipeline companies engaged in interstate transportation;
• Establishment of equal service conditions to provide shippers with equal access to pipeline transportation; and
• Establishment of reasonable rates for transporting petroleum and petroleum products by pipeline.
The filing requirements for oil pipeline tariffs and rates
The Commission's regulations at 18 CFR parts 341 through 348 provide that letters of transmittal must describe the filings and explain any changes to the carrier's rates, rules, terms or conditions of service; state if a waiver is being requested, and specify the statute, section, regulation, policy, or order requested to be waived; and identify the tariffs supplemental numbers, or tariff sections and the proposed effective date of the tariff publication. The letter of transmittal must certify that the filing has been sent to each subscriber of the tariff publication. A carrier may file to amend or modify a tariff contained in a tariff filing at any time during the pendency of the filing. Carriers must cancel tariffs when the service or transportation movement is terminated. If the service in connection with the tariff is no longer in interstate commerce, the tariff publication must state so. Whenever the tariff of a carrier on file with the Commission is to be adopted by another carrier as a result of an acquisition, merger, or name change, the succeeding company must file with the Commission, and post within 30 days after such succession, the tariff, or portion thereof, that has been adopted in the electronic format required by § 341.1 bearing the name of the successor company.
The Commission's regulation at 18 CFR 347.1 provides that oil pipelines must file material to support requests for newly established or changed property account depreciation studies. It requires an applicant to file electronically, and the transmittal letter must give a general description of the change in depreciation rates, certify that the transmittal also has been sent to each shipper and to each subscriber, and state if there are no subscribers. The proposed depreciation rates being established must be used until they are either accepted or modified by the Commission. Rates in effect at the time of the proposed revision must continue to be used until the proposed revised rates are approved or modified by the Commission. The oil pipeline must provide information in sufficient detail to fully explain and justify the proposed rates. Modifications, additions, and deletions to data elements should be made to reflect the individual circumstances of the carrier's properties and operations.
In another adjustment, the number of hours for Oil Rates and Tariff Filings will decrease from 7.8 hours to 7 hours per respondent due to the hour allocation going to the second line (Depreciation Studies) in the table below. Additionally, since the previous renewal, the number of respondents to Oil Rates and Tariff filings also increased from 219 to 258 based on the number of filings received by the Commission. The overall revised burden estimates result to an increase of 61 respondents from 219 to 280, 86 responses from 710 to 796, and 760 hours from 5,538 to 6,298.
The Commission estimates the annual public reporting burden and cost
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
The Commission strongly encourages electronic filing. Please file scoping comments using the Commission's eFiling system at
The Commission's Rules of Practice require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k. This application is not ready for environmental analysis at this time.
l.
The project is operated in a run-of-river mode, whereby outflow from the project approximates inflow. Project operation occurs remotely in an automatic control mode using a
A continuous minimum flow of 25 cfs or inflow, whichever is less, is released over the spillway flashboards to Alice Falls year-round. An additional 125-cfs aesthetic flow (for a total flow of 150 cfs over Alice Falls), or inflow, whichever is less, is released daily from 8:00 a.m. to 3:00 p.m., Monday through Friday, from May 20 to September 8 when public recreation access is provided. A seasonal conveyance flow of 20 cfs or inflow, whichever is less, is continuously passed through the fish bypass facility from April 1 through November 30. When inflow to the reservoir is less than the scheduled combined minimum flow, Alice Falls Hydro releases 20 cfs from the fish bypass facility and any remaining flow is released over the spillway to Alice Falls.
m. In addition to publishing the full text of this notice in the
n. You may also register online at
o.
Commission staff will prepare either an environmental assessment (EA) or an environmental impact statement (EIS) that describes and evaluates the probable effects, if any, of the licensee's proposed action and alternatives. The EA or EIS will consider environmental impacts and reasonable alternatives to the proposed action. The Commission's scoping process will help determine the required level of analysis and satisfy the National Environmental Policy Act (NEPA) scoping requirements, irrespective of whether the Commission prepares an EA or an EIS. At this time, we do not anticipate holding on-site scoping meetings. Instead, we are soliciting written comments and suggestions on the preliminary list of issues and alternatives to be addressed in the NEPA document, as described in scoping document 1 (SD1), issued November 17, 2022.
Copies of SD1 outlining the subject areas to be addressed in the NEPA document were distributed to the parties on the Commission's mailing list and the applicant's distribution list. Copies of SD1 may be viewed on the web at
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection.
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
The Commission strongly encourages electronic filing. Please file scoping comments using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person on the official service list for the project. Further, if an intervener files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k. This application is not ready for environmental analysis at this time.
l.
Montana DNRC operates the project in a run-of-river mode (minus flows diverted for non-project irrigation purposes at the dam) and generates an estimated average of 40,669 megawatt-hours per year.
Montana DNRC proposes the following modifications to existing project facilities: (1) remove the jetty that separates the hydropower intake and the non-project irrigation canal intake; (2) install a new angled screen with 6-inch spacing between the bars and install two parallel 100-foot-long, 10-foot-wide by 10-foot-high box culverts within the irrigation intake canal and a bulkhead near the current non-project irrigation headworks, and include the new angled screen and box culverts as licensed project facilities; (3) modernize the project trash rake (
Montana DNRC proposes to continue to operate in an automated run-of-river mode throughout the year where outflow from the project approximates inflow (minus flows diverted for irrigation) as it does under the current license but proposes to modify its procedures for responding to an unplanned unit trip by maintaining higher flows downstream and more slowly returning reservoir levels to normal elevation to reduce the potential for fish stranding downstream of the dam.
m. A copy of the application can be viewed on the Commission's website at
You may also register at
n.
Commission staff will hold two public scoping meetings to receive input on the scope of the environmental issues that should be analyzed in the NEPA document. The daytime meeting will focus on the concerns of resource agencies, non-governmental organizations (NGOs), and Native American tribes. The evening meeting will focus on receiving input from the public. All interested individuals, resource agencies, Native American tribes, and NGOs are invited to attend one or both of the meetings. The times and locations of these meetings are as follows:
Once at the County Fairgrounds, the 4-H Building is the largest building of three, on-site.
Copies of the Scoping Document (SD1) outlining the subject areas to be addressed in the NEPA document were distributed to the parties on the Commission's mailing list. Copies of the SD1 will be available at the scoping meeting or may be viewed on the web at
Montana DNRC and Commission staff will conduct an environmental site review of the project beginning at 1:30 p.m. on December 13, 2022. All interested individuals, agencies, tribes, and NGOs are invited to attend. All participants should meet at the project, which is located at 511 Toston Dam Road, Toston, Montana 59643. All participants are responsible for their own transportation to the site and during the site visit. Anyone with questions about the environmental site review should contact David Lofftus at (406) 444-6659 or
At the scoping meetings, Commission staff will: (1) summarize the environmental issues tentatively identified for analysis in the NEPA document; (2) solicit from the meeting participants all available information, especially quantifiable data, on the resources at issue; (3) encourage statements from experts and the public on issues that should be analyzed in the NEPA document, including viewpoints in opposition to, or in support of, the staff's preliminary views; (4) determine the resource issues to be addressed in the NEPA document; and (5) identify those issues that require a detailed analysis, as well as those issues that do not require a detailed analysis.
The meetings are recorded by a stenographer and become part of the formal record of the Commission proceeding on the project. Individuals, NGOs, Native American tribes, and agencies with environmental expertise and concerns are encouraged to attend the meetings and to assist the staff in defining and clarifying the issues to be addressed in the NEPA document.
1. In order to address concerns regarding the reliability impacts of
2. The Bulk-Power System generation resource mix is undergoing a rapid change, including the projected addition over the next decade of an “unprecedented proportion of nonsynchronous resources,”
3. To identify which Bulk-Power System users, owners, and operators must register with NERC and comply with mandatory Reliability Standards, NERC applies its Commission-approved definition of BES. This definition identifies elements
4. Unregistered IBRs connecting to the Bulk-Power System do not meet the current BES definition, are not registered with NERC, and are not required to comply with Reliability Standards.
5. In a series of reports detailing grid disturbances over the past six years, NERC has determined that the operational characteristics of IBRs, regardless of size, coupled with their equipment settings, may cause IBRs to reduce power output, whether by tripping offline
6. Therefore, we find that it is necessary to ensure that unregistered IBRs that may have an aggregate material impact on the reliable operation of the Bulk-Power System are required to: (1) register with NERC, and (2) comply with NERC Reliability Standards. Hence, we direct NERC, pursuant to our authority under FPA section 215,
7. In view of the rapid growth of IBRs and their potential to materially impact the reliability of the Bulk-Power System (including the potential for unregistered IBRs to materially impact the reliability of the Bulk-Power System in the aggregate), we are issuing this order concurrently with a notice of proposed rulemaking that preliminary finds that the Reliability Standards do not fully address the impacts of IBRs on the reliable operation of the Bulk-Power System and that proposes to direct NERC to create new or modified Reliability Standards that address reliability concerns pertaining to IBRs.
8. Section 215 of the FPA provides that the Commission may certify an Electric Reliability Organization (ERO), the purpose of which is to establish and enforce Reliability Standards, subject to Commission review and approval.
9. The Commission's regulations require each user, owner, and operator of the Bulk-Power System to be registered with the ERO and to comply with applicable Reliability Standards.
10. NERC's registration criteria also allow NERC to limit the compliance obligations of a given entity registered for a particular function or of a similarly-situated class of entities, as warranted based on the particular facts and circumstances, to a subset of Reliability Standards or requirements.
11. On March 16, 2007, in Order No. 693, pursuant to section 215(d) of the FPA, the Commission approved 83 of 107 proposed Reliability Standards and the Glossary of Terms Used in NERC Reliability Standards (NERC Glossary), which included an early version of NERC's BES definition.
12. On November 18, 2010, in Order No. 743, the Commission directed NERC to revise its definition of the term BES to ensure that the definition encompasses all facilities necessary for operating an interconnected transmission network.
13. On January 25, 2012, NERC submitted two petitions to revise its BES definition and Rules of Procedure pursuant to the directives in Order No. 743, including: (1) NERC's proposed revision to the definition of BES with a “core” definition (
14. NERC uses the BES definition to identify which users, owners, and operators of the Bulk-Power System should be registered by first using the BES definition bright-line (
15. On December 13, 2013, NERC filed proposed revisions to the BES definition to, among other things, address Commission directives in Order Nos. 773 and 773-A to improve the BES definition inclusions and exclusions.
16. The inclusions relevant for IBRs are inclusions I2 (generating resources) and I4 (dispersed power producing resources),
I2—Generating resource(s) including the generator terminals through the high-side of the step-up transformer(s) connected at a voltage of 100 kV or above with: (a) Gross individual nameplate rating greater than 20 MVA. Or, (b) Gross plant/facility aggregate nameplate rating greater than 75 MVA.
I4—Dispersed power producing resources that aggregate to a total capacity greater than 75 MVA (gross nameplate rating), and that are connected through a system designed primarily for delivering such capacity to a common point of connection at a voltage of 100 kV or above. Thus, the facilities designated as BES are: (a) The individual resources, and (b) The system designed primarily for delivering capacity from the point where those resources aggregate to greater than 75 MVA to a common point of connection at a voltage of 100 kV or above.
17. Further, in approving revisions to NERC's BES definition in Order No.
18. An entity that does not have elements that fall within the BES definition may nevertheless be registered if it can be demonstrated that the entity has a material impact on Bulk-Power System reliability. To determine whether users, owners, and operators of facilities and elements that fall outside the BES definition are material to Bulk-Power System reliability and must be registered, NERC uses a non-exclusive set of factors (materiality test).
19. Relevant to IBRs, the factors for determining material impact include the following:
Will intentional or inadvertent removal of an Element owned or operated by the entity, or a common mode failure of two Elements as identified in the Reliability Standards (for example, loss of two Elements as a result of a breaker failure), lead to a reliability issue on another entity's system (such as a neighboring entity's Element exceeding an applicable rating, or loss of non-consequential load due to a single contingency)? Conversely, will such contingencies on a neighboring entity's system result in issues for Reliability Standards compliance on the system of the entity in question?
Can the normal operation, misoperation, or malicious use of the entity's Protection Systems (including UFLS [under frequency load shedding], UVLS [under voltage load shedding], Special Protection System, Remedial Action Schemes and other Protection Systems protecting BES Facilities) cause an adverse impact on the operational reliability of any associated Balancing Authority, Generator Operator or Transmission Operator, or the automatic load shedding programs of a PC [planning coordinator] or TP [transmission planner] (UFLS, UVLS)?
20. We are issuing this order to ensure that timely action is taken to address the reliability challenges presented by IBRs because their individual and aggregate impacts can exacerbate disturbances on the Bulk-Power System. Such impacts are well documented in studies of Bulk-Power System disturbances over the past six years, as discussed below. The rapid growth of IBRs will make these impacts more acute over time unless they are adequately addressed. Accordingly, we direct NERC within 90 days of the date of issuance of this order to develop and submit for Commission approval a work plan describing, in detail, how NERC will identify and register owners and operators of unregistered IBRs that in the aggregate materially impact the reliable operation of the Bulk-Power System.
21. NERC should explain in its work plan how NERC will modify its processes to encompass unregistered IBRs (whether by working with stakeholders to change the BES definition, a change to its registration program, or some other solution) within 12 months of approval of the work plan. The work plan should also include implementation milestones ensuring that unregistered IBR owners and operators meeting the new registration criteria are identified within 24 months of the approval date of the work plan, and they are registered and required to comply with applicable Reliability Standards within 36 months of the approval date of the work plan. The work plan will be noticed for public comment. Once the Commission approves the proposed work plan, we direct NERC to file progress updates every 90 days thereafter detailing NERC's progress towards modifying its processes and, once the modification is complete, every 90 days thereafter detailing its progress towards identifying and registering owners and operators of unregistered IBRs.
22. IBRs are rapidly becoming a principal source of electric power,
23. Unregistered IBRs often have small individual generation capacities, are connected to the Bulk-Power System at less than 100 kV transmission or sub-transmission voltages, and do not meet one of the inclusions in the BES definition. NERC's materiality test
24. The first documented large-scale reliability issues related to IBRs occurred in August of 2016 during the Blue Cut Fire event in California. Until this event, the likelihood of IBRs tripping or momentarily ceasing during faults on the Bulk-Power System was unclear. Since the Blue Cut Fire, at least 11 additional NERC-documented events
25. On July 7, 2020, two consecutive faults in northern Los Angeles county, California resulted in the wide-spread interruption of solar PV IBRs across the Southern California region, referred to as the “San Fernando Disturbance.”
26. During the summer of 2021, California experienced four solar PV IBR disturbance events. Similar to prior disturbances, these four events involved normally cleared transmission line faults and the loss of Bulk-Power System-connected solar PV IBRs.
27. In its 2021 Solar PV Disturbances Report, NERC recognized the risk posed by non-BES connected IBRs, finding that “[t]he ongoing widespread [power] reduction of solar PV [IBR] resources continues to be a notable reliability risk to the [Bulk-Power System], particularly when combined with the additional loss of other generating resources on the [Bulk-Power System] and in aggregate on the distribution system.”
28. Since the discernment of reliability issues related to IBRs in 2016, NERC has taken the following actions to assess and mitigate the impact of both registered and unregistered IBRs: (1) published seven reports documenting 12 events;
29. The NERC IRPTF May 2020 technical report explained that the “[i]nformation from only about one-half of the installed capacity of [Bulk-Power System]-connected solar PV resources (in the Western Interconnection) was collected as part of the NERC Alert process based on the size of resources and their designation as [BES] or non-BES resources. The extent of model accuracy for those resources that did not respond to the NERC Alert is unknown.”
30. In summary, events and disturbances have shown that IBRs, regardless of size and transmission or sub-transmission voltage, have a material impact on Bulk-Power System reliability. Further, while NERC recognizes that action is necessary to address the most common reliability issues posed by IBRs, these issues have not been resolved. Finally, even when NERC does address IBR-specific gaps through its Reliability Standards, until unregistered IBRs are registered, they will not be required to comply with the Reliability Standards.
31. As IBR saturation continues to increase on the Bulk-Power System, we are concerned that, absent Commission action, larger numbers of unregistered IBRs may pose increasing risk to reliable operation, as demonstrated by the disturbance events described above. Therefore, we find it necessary to ensure that NERC register the owners and operators of those unregistered IBRs that, in the aggregate, have a material impact on Bulk-Power System reliability, to ensure those entities are subject to a relevant set of mandatory and enforceable Reliability Standard requirements.
32. Many IBRs have small individual generation capacities, are connected to the Bulk-Power System at less than 100 kV transmission or sub-transmission voltage, or do not meet one of the inclusions in the NERC BES definition, and therefore are not registered. Similarly, while NERC's materiality test can be used to assess whether an individual entity that does not meet the NERC BES definition has a material impact on the reliable operation of the Bulk-Power System, and thus should be registered with NERC and subject to its mandatory Reliability Standards, NERC has not, to date, applied the materiality test to unregistered IBRs to determine whether they, in the aggregate, have a material impact on the reliable operation of the Bulk-Power System. Therefore, NERC has not addressed through either its BES definition or the materiality test the impact of unregistered IBRs that, in the aggregate, materially impact the reliable operation Bulk-Power System. As a result, these potentially impactful unregistered IBRs are not required to comply with any Reliability Standards. To address this concern, we find that unregistered IBRs connected to the Bulk-Power System, regardless of size and transmission or sub-transmission voltage, that in the aggregate have a material impact on Bulk-Power System performance should be registered.
33. Based on the record of IBR facilities materially impacting the reliability of the Bulk-Power System discussed above, we find that the current BES definition and NERC's application of the materiality test to individual entities do not address the potential impacts to the reliability of the Bulk-Power System of the increasing numbers of smaller non-BES Bulk-Power System-connected IBRs. Therefore, we direct NERC to develop and file a work plan within 90 days of the date of this order explaining how it will identify and register unregistered IBRs that, in the aggregate, have a material impact on the reliable operation of the Bulk-Power System, but that are not currently required to be registered with NERC under the BES definition. The work plan should explain how NERC will modify its processes to encompass unregistered IBRs (whether by working with stakeholders to change the BES definition, changing its Rules of Procedure related to registration, or some other solution) within 12 months of approval of the work plan. The work plan should also include implementation milestones ensuring that unregistered IBR owners and operators meeting the new registration criteria are identified within 24 months of the approval date of the work plan, and that they are registered and required to comply with applicable Reliability Standards within 36 months of the approval date of the work plan. The work plan will be noticed for public comment.
34. We recognize that the currently unregistered IBRs may not present the same impact in all circumstances as IBRs that fall under the current BES definition. Accordingly, NERC may determine that the full set of Reliability Standard Requirements otherwise applicable to generator owners and operators need not apply to currently
35. Accordingly, consistent with the discussion in this order, we direct NERC to file the work plan within 90 days of the date of this order for Commission approval. The work plan filed by NERC will be noticed for public comment. Once the Commission approves the work plan, we direct NERC to file progress updates every 90 days from the date of approval documenting NERC's progress. We direct NERC to complete implementation of the work plan (whether by working with stakeholders to change the BES definition, changes to its registration program, or some other solution) within 12 months from the date of Commission approval of the work plan and to complete the identification of unregistered IBR owners and operators within 24 months from the date of Commission approval, so that they are registered and required to comply with applicable Reliability Standards within 36 months from the date of Commission approval of the work plan.
36. The Paperwork Reduction Act (PRA)
37. The information collection affected by this order is FERC-725, “Certification of Electric Reliability Organization; Procedures for Electric Reliability Standards” (OMB Control Number 1902-0225). The information collection requirements in this order are covered by and included in, the existing OMB-approved FERC-725.
38. This order directs the ERO to develop and submit to the Commission for approval within 90 days of the date of this order a work plan describing, in detail, how the ERO plans to modify its registration processes to identify and register owners and operators of unregistered IBRs that in the aggregate, materially impact the reliable operation of the Bulk-Power System, as discussed in the body of this order. NERC is required to submit progress updates every 90 days after approval of the work plan.
39. In this order, NERC is directed to: (1) complete modifications to its registration process within 12 months of Commission approval of the work plan; (2) complete identification of owners and operators of IBRs that are connected to the Bulk Power System and that, in the aggregate, materially impact the reliable operation of the Bulk-Power System within 24 months of Commission approval of the work plan; and (3) complete registration of unregistered IBR owners and operators so they are required to comply with applicable Reliability Standards within 36 months of Commission approval of the work plan, as discussed in the body of this order.
40. The Commission solicits comments on the Commission's need for the revision of the information collection, whether the information will have practical utility, the accuracy of the burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected or retained.
41. Interested persons may submit questions about this information collection by contacting Ellen Brown, Office of the Executive Director, at
(A) NERC is hereby directed to submit a work plan within 90 days of the date of this order describing, in detail, how it plans to modify with stakeholder input its BES definition, registration program, or some other solution to identify and register owners and operators of unregistered IBRs that are connected to the Bulk-Power System and that, in the aggregate, materially impact the reliable operation of the Bulk-Power System, as discussed in the body of this order.
(B) NERC is hereby directed to complete modifications in accordance with its work plan within 12 months of Commission approval of the work plan, complete identification of owners and operators of IBRs that in the aggregate, materially impact the reliable operation of the Bulk-Power System within 24 months of Commission approval of the work plan, and complete registration of IBR owners and operators so they are required to comply with applicable Reliability Standards within 36 months of Commission approval of the work plan, as discussed in the body of this order.
(C) NERC is hereby directed to file detailed progress updates on the status of its workplan, completed implementation milestones, and any delays, every 90 days from the date of Commission approval of the work plan, as discussed in the body of this order.
By the Commission. Commissioner Danly is concurring with a separate statement attached.
DANLY, Commissioner,
1. I concur in today's order.
2. Better late than never, I suppose. Nevertheless, it could be at least four years before certain of the IBR entities are registered and another five years before the full suite of contemplated requirements are mandatory and enforceable. So, it will be about ten or eleven years
For these reasons, I respectfully concur.
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k.
l.
m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n.
o.
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the Commission received the following electric corporate filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system (
Federal Energy Regulatory Commission, DOE.
Notice of information collection and request for comments.
In compliance with the requirements of the Paperwork Reduction Act of 1995, the Federal Energy Regulatory Commission (Commission or FERC) is soliciting public comment on the currently approved information collection, FERC-515 (Declaration of Intention), which will be submitted to the Office of Management and Budget (OMB) for review. No comments were received on the 60-day notice published on September 6, 2022.
Comments on the collection of information are due December 23, 2022.
Send written comments on FERC-515 to OMB through
Please submit copies of your comments to the Commission. You may submit copies of your comments (identified by Docket No. IC22-29-000) by one of the following methods:
•
○ Documents must be filed in acceptable native applications and print-to-PDF, but not in scanned or picture format.
• For those unable to file electronically, comments may be filed by USPS mail or by hand (including courier) delivery.
○
○
Ellen Brown may be reached by email at
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j.
The Commission strongly encourages electronic filing. Please file comments, motions to intervene, and protests using the Commission's eFiling system at
The Commission's Rules of Practice and Procedure require all intervenors filing documents with the Commission to serve a copy of that document on each person whose name appears on the official service list for the project. Further, if an intervenor files comments or documents with the Commission relating to the merits of an issue that may affect the responsibilities of a particular resource agency, they must also serve a copy of the document on that resource agency.
k.
l.
m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n.
o.
Take notice that the Commission has received the following Natural Gas Pipeline Rate and Refund Report filings:
Any person desiring to protest in any the above proceedings must file in accordance with Rule 211 of the Commission's Regulations (18 CFR 385.211) on or before 5:00 p.m. Eastern time on the specified comment date.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
The filings are accessible in the Commission's eLibrary system (
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. Deadline for filing comments, interventions, and protests is December 19, 2022.
The Commission strongly encourages electronic filing. Please file motions to intervene, protests and comments using the Commission's eFiling system at
k.
l. This filing may be viewed on the Commission's website at
m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n.
o.
p. Agency Comments—Federal, state, and local agencies are invited to file comments on the described proceeding. If any agency does not file comments within the time specified for filing comments, it will be presumed to have no comments.
Take notice that the following hydroelectric application has been filed with the Commission and is available for public inspection:
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. Deadline for filing comments, interventions, and protests is December 19, 2022.
The Commission strongly encourages electronic filing. Please file motions to intervene, protests and comments using the Commission's eFiling system at
k.
l. This filing may be viewed on the Commission's website at
m. Individuals desiring to be included on the Commission's mailing list should so indicate by writing to the Secretary of the Commission.
n.
o.
p. Agency Comments-Federal, state, and local agencies are invited to file comments on the described proceeding. If any agency does not file comments within the time specified for filing comments, it will be presumed to have no comments.
Environmental Protection Agency (EPA).
Notice of public meeting for Great Lakes Advisory Board.
Pursuant to the Federal Advisory Committee Act (FACA), the Environmental Protection Agency (EPA) provides notice of a public meeting for the Great Lakes Advisory Board. Pre-registration is required.
This virtual public meeting will be held on December 6th, 2022, from 1:00 p.m. to 2:30 p.m. Central Standard Time. Members of the public seeking to view the meeting must register by 3:00 p.m. Central Standard Time on December 5th, 2022. Members of the public seeking to make comments relevant to issues discussed at the virtual meeting must register and indicate a request to make oral and/or written public comments in advance of the meeting. For information on how to register, please see [How do I participate in the meeting] below.
Todd Nettesheim, Acting Designated Federal Officer (DFO), at
The GLAB is chartered in accordance with the Federal Advisory Committee Act (FACA) of 1972 (5 U.S.C., Appendix 2, as amended) and 41 CFR 102-3.50(d). The Advisory Board provides advice and recommendations on matters related to the Great Lakes Restoration Initiative. The Advisory Board also advises on domestic matters related to implementation of the Great Lakes Water Quality Agreement between the U.S. and Canada. The major objectives are to provide advice and recommendations on: Great Lakes protection and restoration activities; long-term goals, objectives, and priorities for Great Lakes protection and
This meeting will be conducted as a virtual meeting on December 6th, 2022, from 1:00 p.m. to 2:30 p.m. Central Standard Time. You must register by 3:00 p.m. Central Standard Time on December 5th, 2022, to receive information on how to participate. You may also submit written or oral comments for the committee by following the processes outlined below.
Individual registration is required for participation in this meeting. Information on registration for this meeting can be found at
The meeting agenda and other materials for the virtual conference will be posted on the GLAB website at
Persons with disabilities who wish to request reasonable accommodations to participate in this event may contact the Acting DFO at
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) is announcing its approval of thirteen amended certification plans for certifying applicators of Restricted Use Pesticides (RUPs) from the following certifying authorities: Alaska Department of Environmental Conservation (ADEC); California Department of Pesticide Regulation (DPR); Nebraska Department of Agriculture (NDA); New York Department of Environmental Conservation (NYSDEC); Oregon Department of Agriculture (ODA); Puerto Rico Department of Agriculture (PRDA); U.S. Department of Agriculture, Animal and Plant Health Inspection Service, Plant, Protection and Quarantine (USDA APHIS PPQ); U.S. Department of Agriculture, Forest Service (USDA FS); U.S. Department of Defense (DoD); U.S. Department of Energy (DoE); U.S. Department of the Interior, Bureau of Land Management (DOI BLM); Vermont Agency of Agriculture, Food and Markets (VAAFM); and Virgin Islands Department of Planning and Natural Resources (VIDPNR). The amended plans are consistent with the existing regulatory requirements, including revisions made in 2017 to enhance and improve the competency of certified applicators of RUPs and persons working under their direct supervision. The 2017 regulatory revisions are intended to further reduce potential exposure of RUPs to certified applicators and those working under their direct supervision, other workers, the public, and the environment. Federal, state, territory, and tribal certifying authorities with existing certification plans are required to revise their existing plans to conform with the updated federal standards for RUP applicator certification.
You may be potentially affected by this action if you are a federal, state, territory, or tribal agency who administers a certification program for pesticides applicators. You many also be potentially affected by this action if you are: A registrant of RUP products; a person who applies RUPs, including those under the direct supervision of a certified applicator; a person who relies upon the availability of RUPs; someone who hires a certified applicator to apply an RUP; a pesticide safety educator; or other person who provides pesticide safety training for pesticide applicator certification or recertification. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Agricultural Establishments (Crop Production) (NAICS code 111).
• Nursery and Tree Production (NAICS code 111421).
• Agricultural Pest Control and Pesticide Handling on Farms (NAICS code 115112).
• Crop Advisors (NAICS codes 115112, 541690, 541712).
• Agricultural (Animal) Pest Control (Livestock Spraying) (NAICS code 115210).
• Forestry Pest Control (NAICS code 115310).
• Wood Preservation Pest Control (NAICS code 321114).
• Pesticide Registrants (NAICS code 325320).
• Pesticide Dealers (NAICS codes 424690, 424910, 444220).
• Industrial, Institutional, Structural & Health Related Pest Control (NAICS code 561710).
• Ornamental & Turf, Rights-of-Way Pest Control (NAICS code 561730).
• Environmental Protection Program Administrators (NAICS code 924110).
• Governmental Pest Control Programs (NAICS code 926140).
If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under
For assistance in locating documents related to the approved plans identified in this notice, please consult the designated EPA point of contact for the Certification Plan of interest as listed in Table 1 of this unit, or the general contact person listed under
Section 11 of the Federal Insecticide, Fungicide, Rodenticide Act (FIFRA), 7. U.S.C. 136
This action gives notice that the following thirteen certifying authorities' certification plans submitted to the Agency meet or exceed the standards of 40 CFR part 171: ADEC, DPR, NDA, NYSDEC, ODA, PRDA, USDA APHIS PPQ, USDA FS, DoD, DoE, DOI BLM, VAAFM and VIDPNR. EPA hereby gives notice that the thirteen amended certification plans for certifying applicators of RUPs listed in this document are now approved plans; the certifying authorities may certify pesticide applicators and continue with implementation of the certification plans as outlined in the approved plans.
These thirteen plans represent the first in a series of batched notifications announcing the approval of the federal, state, territory, and tribal certification plans moving through the approval process. These batched notifications will continue to occur on a regular basis as plans are approved. EPA also provides frequent status updates on its website at
The following is a list of documents that are related to the issuance of this Notice. For assistance in locating these other documents, please consult the person listed under
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), NESHAP for Perchloroethylene Dry Cleaning Facilities (EPA ICR Number 1415.13, OMB Control Number 2060-0234) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through January 31, 2023. Public comments were previously requested, via the
Additional comments may be submitted on or before December 23, 2022.
Submit your comments, referencing Docket ID Number EPA-HQ-OAR-2022-0073, to EPA online using
Submit written comments and recommendations to OMB for the proposed information collection within 30 days of publication of this notice to
Muntasir Ali, Sector Policies and Program Division (D243-05), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina, 27711; telephone number: (919) 541-0833; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at either
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), NESHAP for Halogenated Solvent Cleaners/Halogenated Hazardous Air Pollutants (EPA ICR Number 1652.11, OMB Control Number 2060-0273), to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through January 31, 2023. Public comments were previously requested, via the
Additional comments may be submitted on or before December 23, 2022.
Submit your comments, referencing Docket ID Number EPA-HQ-OAR-2022-0076, to: (1) EPA online using
Submit written comments and recommendations to OMB for the proposed information collection within 30 days of publication of this notice to
Muntasir Ali, Sector Policies and Program Division (D243-05), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-0833; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
In general, all NESHAP standards require initial notification reports, performance tests, and periodic reports by the owners/operators of the affected facilities. They are also required to maintain records of the occurrence and duration of any startup, shutdown, or malfunction in the operation of an affected facility, or any period during which the monitoring system is inoperative. These notifications, reports, and records are essential in determining compliance, and are required of all affected facilities subject to NESHAP.
Environmental Protection Agency (EPA).
Notice of proposed consent decree; request for public comment.
In accordance with the Clean Air Act, as amended (CAA or the Act), EPA is providing notice of a proposed consent decree in
Written comments on the proposed consent decree must be received by December 23, 2022.
Submit your comments, identified by Docket ID No. EPA-HQ-OGC-2022-0894, online at
Geoffrey L. Wilcox, Air and Radiation Law Office, Office of General Counsel, U.S. Environmental Protection Agency; telephone (202) 564-5601; email address
The official public docket for this action (identified by Docket ID No. EPA-HQ-OGC-2022-0894) contains a copy of the proposed consent decree. The official public docket is available for public viewing at the Office of Environmental Information (OEI) Docket in the EPA Docket Center, EPA West, Room 3334, 1301 Constitution Ave. NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OEI Docket is (202) 566-1752.
The electronic version of the public docket for this action contains a copy of the proposed consent decree and is available through
This case pertains to EPA's duty to promulgate a FIP or FIPs to address certain nonattainment plan requirements for the for the San Joaquin Valley area of California for the 1997, 2006, and 2012 PM
Specifically, the proposed consent decree would establish deadlines for EPA to take action pursuant to the CAA to sign a notice or notices of a proposed and final FIP by no later than July 31, 2023, and September 30, 2024, respectively, to address the contingency measures element of the: (1) nonattainment plan for the section 189(d) requirements for the 1997 annual PM
The proposed consent decree also provides that if California submits and EPA fully approves a SIP submission or submissions that satisfy any of the specific plan requirements above, then EPA's obligation to promulgate a proposed or final FIP under the consent decree with respect to the satisfied nonattainment plan element is automatically terminated, and Plaintiffs' claim as to that plan element is moot. Also, if EPA issues a clean data determination,
In accordance with section 113(g) of the CAA, for a period of thirty (30) days following the date of publication of this document, the Agency will accept written comments relating to the proposed consent decree. EPA or the Department of Justice may withdraw or withhold consent to the proposed consent decree if the comments disclose facts or considerations that indicate that such consent is inappropriate, improper, inadequate, or inconsistent with the requirements of the Act.
Submit your comments, identified by Docket ID No. EPA-HQ-OGC-2022-0894, via
If you submit an electronic comment, EPA recommends that you include your name, mailing address, and an email address or other contact information in the body of your comment. This ensures that you can be identified as the submitter of the comment and allows EPA to contact you in case EPA cannot read your comment due to technical difficulties or needs further information on the substance of your comment. Any identifying or contact information provided in the body of a comment will be included as part of the comment that is placed in the official public docket and made available in EPA's electronic public docket. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.
Use of the
Please ensure that you submit your comments within the specified comment period. Comments received after the close of the comment period will be marked “late.” EPA is not required to consider these late comments.
Environmental Protection Agency (EPA).
Notice of adequacy.
In this notice, the EPA is notifying the public that it has found that the 2020 motor vehicle emissions budgets for volatile organic compounds (VOCs) and nitrogen oxides (NO
This finding is effective December 8, 2022.
Publicly available docket materials, identified by Docket ID Number EPA-R02-OAR-2022-0715, are available either electronically through
Lily Black, Environmental Protection Agency Region 2, Air and Radiation Division, 290 Broadway, 25th Floor, New York, New York 10007-1866; (212) 637-3884,
Throughout this document, whenever “we,” “us,” or “our” is used, we mean the EPA.
Today's notice is an announcement of a finding that we have already made. EPA Region 2 sent a letter to the New York Department of Environmental Conservation on July 26, 2022, stating that the 2020 motor vehicle emissions budgets (“Budgets”) are adequate for transportation conformity purposes.
The transportation conformity rule requires that the EPA conduct a public process and make an affirmative decision on the adequacy of these budgets before they can be used by metropolitan planning organizations in transportation conformity determinations.
As a result of this finding, upon the effective date of this notice of adequacy, the New York Metropolitan Transportation Council (NYMTC) must use the Budgets in future transportation conformity determinations. The Budgets are associated with the reasonable further progress milestone demonstration.
We announced availability of the plan and related Budgets on the EPA's transportation conformity website on March 8, 2022, requesting comments by April 8, 2022. We received no comments in response to the adequacy review posting.
The Budgets are provided in Table 1.
Transportation conformity is required by Clean Air Act section 176(c), 42 U.S.C. 7506(c). The EPA's conformity rule requires that long-range transportation plans, transportation improvement programs, and transportation projects conform to a state's air quality SIP and establishes the criteria and procedures for determining whether or not they conform. Conformity to a SIP means that transportation activities will not produce new air quality violations, worsen existing violations, or delay timely attainment of the NAAQS.
The criteria the EPA uses to determine whether a SIP's motor vehicle emission budgets are adequate for conformity purposes are outlined in 40 CFR 93.118(e)(4).
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted an information collection request (ICR), NESHAP for Commercial Ethylene Oxide Sterilization and Fumigation Operations (EPA ICR Number 1666.12, OMB Control Number 2060-0283), to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act. This is a proposed extension of the ICR, which is currently approved through January 31, 2023. Public comments were previously requested, via the
Additional comments may be submitted on or before December 23, 2022.
Submit your comments, referencing Docket ID Number EPA-HQ-OAR-2022-0079, to EPA online using
Submit written comments and recommendations to OMB for the proposed information collection within 30 days of publication of this notice to
Muntasir Ali, Sector Policies and Program Division (D243-05), Office of Air Quality Planning and Standards, U.S. Environmental Protection Agency, Research Triangle Park, North Carolina, 27711; telephone number: (919) 541-0833; email address:
Supporting documents, which explain in detail the information that the EPA will be collecting, are available in the public docket for this ICR. The docket can be viewed online at
Environmental Protection Agency (EPA).
Notice.
The Environmental Protection Agency (EPA) has submitted the following information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act (PRA): “Polychlorinated Biphenyls (PCBs); Consolidated Information Collection Activities” (EPA ICR No. 1446.14 and OMB Control No. 2070-0112). This is a request to renew an existing ICR that is currently approved through November 30, 2022. Public comments were previously requested via the
Additional comments may be submitted on or before December 23, 2022.
Submit your comments to EPA, referencing Docket ID No. EPA-HQ-OPPT-2017-0647, using
Submit written comments and recommendations to OMB for the proposed information collection within 30 days of publication of this notice to
Katherine Sleasman, Regulatory Support Branch, Office of Chemical Safety and Pollution Prevention, 7602M, Environmental Protection Agency, 1200 Pennsylvania Ave. NW, Washington, DC 20460; telephone number: (202) 566-1204; email address:
Supporting documents which explain in detail the information that the EPA will be collecting, are available in the docket for this ICR. The docket can be viewed online at
Federal Communications Commission.
Notice of public meeting.
In accordance with the Federal Advisory Committee Act, this notice advises interested persons that the Federal Communications Commission's (FCC) Technological Advisory Council will hold a meeting on Thursday, December 8, 2022 in the Commission Meeting Room and available to the public via the internet at
Thursday, December 8, 2022.
Federal Communications Commission, 45 L Street NE, Washington, DC 20554.
Michael Ha, Chief, Policy and Rules Division 202-418-2099;
At the December 8th meeting, the TAC will continue to consider and advise the Commission on topics such as 6G, artificial intelligence, advanced spectrum sharing technologies, and emerging wireless technologies, including new tools to restore internet access during shutdowns and other disruptions. This agenda may be modified at the discretion of the TAC Chair and the Designated Federal Officer (DFO). All attendees should arrive early to allow ample time for processing through the Commission's security screening. As required by Federal COVID-19 safety protocols, all visitors to FCC's facilities in any county where the COVID-19 Community Level is HIGH will be required to wear a “high quality” mask throughout their visit to that facility. Please refer to:
The Commission hereby gives notice of filing of the following agreements under the Shipping Act of 1984. Interested parties may submit comments, relevant information, or documents regarding the agreements to the Secretary by email at
The companies listed in this notice have applied to the Board for approval, pursuant to the Bank Holding Company Act of 1956 (12 U.S.C. 1841
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Comments regarding each of these applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington, DC 20551-0001, not later than December 23, 2022.
1.
Board of Governors of the Federal Reserve System.
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, without revision, the Notice by Financial Institutions of Government Securities Broker or Government Securities Dealer Activities and Notice by Financial Institutions of Termination of Activities as a Government Securities Broker or Government Securities Dealer (Form G-FIN and Form G-FINW; OMB No. 7100-0224).
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System,
Office of Management and Budget (OMB) Desk Officer for the Federal Reserve Board, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
On June 15, 1984, OMB delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. The OMB inventory, as well as copies of the PRA Submission, supporting statements, and approved collection of information instrument(s) are available at
Section 15C of the Act also instructs the Secretary of the Treasury to promulgate recordkeeping requirements regarding the forms and records to be retained by government securities brokers and dealers and to specify the time period for which such records shall be preserved. Accordingly, the recordkeeping requirement associated with these forms is contained in 17 CFR 404.4, which requires state member banks and uninsured state branches or state agencies of foreign banks, as well as other institutions, to retain these forms for three years after the financial institution notifies its ARA that it has ceased to function as a government securities broker or dealer. Although Treasury's recordkeeping requirement does not explicitly apply to foreign banks, to Edge corporations, or to commercial lending companies that are owned or controlled by foreign banks, the Board has the authority to “issue such rules and regulations with respect to transactions in government securities as may be necessary to prevent fraudulent and manipulative acts and practices and to promote just and equitable principles of trade.”
Under the Act, each ARA is instructed to make these forms available to the SEC, and the SEC is instructed to make the notices available to the public.
Board of Governors of the Federal Reserve System.
Notice, request for comment.
The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for
Comments must be submitted on or before January 23, 2023.
You may submit comments, identified by FR RR, by any of the following methods:
•
•
•
•
All public comments are available from the Board's website at
Additionally, commenters may send a copy of their comments to the Office of Management and Budget (OMB) Desk Officer for the Federal Reserve Board, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System,
On June 15, 1984, OMB delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. In exercising this delegated authority, the Board is directed to take every reasonable step to solicit comment. In determining whether to approve a collection of information, the Board will consider all comments received from the public and other agencies.
During the comment period for this proposal, a copy of the proposed PRA OMB submission, including the draft reporting form and instructions, supporting statement, and other documentation, will be made available on the Board's public website at
The Board invites public comment on the following information collection, which is being reviewed under authority delegated by the OMB under the PRA. Comments are invited on the following:
a. Whether the proposed collection of information is necessary for the proper performance of the Board's functions, including whether the information has practical utility;
b. The accuracy of the Board's estimate of the burden of the proposed information collection, including the validity of the methodology and assumptions used;
c. Ways to enhance the quality, utility, and clarity of the information to be collected;
d. Ways to minimize the burden of information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and
e. Estimates of capital or startup costs and costs of operation, maintenance, and purchase of services to provide information.
At the end of the comment period, the comments and recommendations received will be analyzed to determine the extent to which the Board should modify the proposal.
Records kept and information disclosed pursuant to the requirements of the FR RR are not submitted to the Board, so the issue of confidentiality will not normally arise. If the Board's examiners obtain a copy of the records as part of an examination, the records may be exempt from disclosure under exemption 8 of the Freedom of Information Act, which exempts from disclosure matters that are “contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions” (5 U.S.C. 552(b)(8)).
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, with revision, the Transfer Agent Registration and Amendment Form and Transfer Agent Deregistration Form (Form TA-1 and Form TA-W); OMB No. 7100-0099).
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System,
Office of Management and Budget (OMB) Desk Officer for the Federal Reserve Board, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
On June 15, 1984, OMB delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. The OMB inventory, as well as copies of the PRA Submission, supporting statements, and approved collection of information instrument(s) are available at
Board of Governors of the Federal Reserve System.
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, without revision, the Systemic Risk Report (FR Y-15; OMB No. 7100-0352).
Federal Reserve Board Clearance Officer—Nuha Elmaghrabi—Office of the Chief Data Officer, Board of Governors of the Federal Reserve System,
Office of Management and Budget (OMB) Desk Officer for the Federal Reserve Board, Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10235, 725 17th Street NW, Washington, DC 20503, or by fax to (202) 395-6974.
On June 15, 1984, OMB delegated to the Board authority under the Paperwork Reduction Act (PRA) to approve and assign OMB control numbers to collections of information conducted or sponsored by the Board. Board-approved collections of information are incorporated into the official OMB inventory of currently approved collections of information. The OMB inventory, as well as copies of the PRA Submission, supporting statements, and approved collection of information instrument(s) are available at
In addition, the reporting requirements associated with the FR Y-15 are authorized for BHCs pursuant to section 5 of the BHC Act;
The FR Y-15 report is mandatory. Most information provided on the FR Y-15 is made public unless a reporting entity submits a specific request for confidentiality, either on the FR Y-15 or on the form from which the data item
The companies listed in this notice have given notice under section 4 of the Bank Holding Company Act (12 U.S.C. 1843) (BHC Act) and Regulation Y, (12 CFR part 225) to engage de novo, or to acquire or control voting securities or assets of a company, including the companies listed below, that engages either directly or through a subsidiary or other company, in a nonbanking activity that is listed in § 225.28 of Regulation Y (12 CFR 225.28) or that the Board has determined by Order to be closely related to banking and permissible for bank holding companies. Unless otherwise noted, these activities will be conducted throughout the United States.
The public portions of the applications listed below, as well as other related filings required by the Board, if any, are available for immediate inspection at the Federal Reserve Bank(s) indicated below and at the offices of the Board of Governors. This information may also be obtained on an expedited basis, upon request, by contacting the appropriate Federal Reserve Bank and from the Board's Freedom of Information Office at
Unless otherwise noted, comments regarding the applications must be received at the Reserve Bank indicated or the offices of the Board of Governors, Ann E. Misback, Secretary of the Board, 20th Street and Constitution Avenue NW, Washington DC 20551-0001, not later than December 8, 2022.
1.
Centers for Disease Control and Prevention (CDC), Department of Health and Human Services (HHS).
Notice of meeting and request for comment.
In accordance with the Federal Advisory Committee Act, the Centers for Disease Control and Prevention (CDC), located within the Department of Health and Human Services (HHS), announces the following meeting of the Advisory Committee on Immunization Practices (ACIP). This meeting is open to the public. Time will be available for public comment.
The meeting will be held on December 9, 2022, from 10 a.m. to 5 p.m. EST (dates and times subject to change, see the ACIP website for updates at
You may submit comments, identified by Docket No. CDC-2022-0136, by either of the following methods:
•
•
Stephanie Thomas, ACIP Committee Management Specialist, Centers for Disease Control and Prevention, National Center for Immunization and Respiratory Diseases, 1600 Clifton Road NE, MS H24-8, Atlanta, GA 30329-4027; Telephone: 404-639-8836; Email:
Interested persons or organizations are invited to participate by submitting written views, recommendations, and data. Please note that comments received, including attachments and other supporting materials, are part of the public record and are subject to public disclosure. Comments will be posted on
If the number of persons requesting to speak is greater than can be reasonably accommodated during the scheduled time, CDC will conduct a lottery to determine the speakers for the scheduled public comment session. CDC staff will notify individuals by email on December 8, 2022 regarding their request to speak. To accommodate the significant interest in participation in the oral public comment session of ACIP meetings, each speaker will be limited to three minutes, and each speaker may only speak once per meeting.
The Director, Strategic Business Initiatives Unit, Office of the Chief Operating Officer, Centers for Disease Control and Prevention, has been delegated the authority to sign
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is developing a list of bulk drug substances (active pharmaceutical ingredients) for which there is a clinical need (the 503B Bulks List). Drug products that outsourcing facilities compound using bulk drug substances on the 503B Bulks List can qualify for certain exemptions from the Federal Food, Drug, and Cosmetic Act (FD&C Act) provided certain conditions are met. This notice identifies two bulk drug substances that FDA has considered and proposes to include on the 503B Bulks List to compound three categories of compounded drug products: arginine hydrochloride (HCl) for oral use, lysine HCl for oral use, and lysine HCl for intravenous use in combination with FDA-approved, single-ingredient arginine HCl for intravenous use. This notice identifies three bulk drug substances that FDA has considered and proposes not to include on the 503B Bulks List: etomidate, furosemide, and rocuronium bromide. Additional bulk drug substances nominated for inclusion on this list are under consideration and may be the subject of future notices.
Either electronic or written comments on the notice must be submitted by January 23, 2023.
You may submit comments as follows. Please note that late, untimely filed comments will not be considered. The
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Tracy Rupp, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Silver Spring, MD 20993, 301-796-3100.
Section 503B of the FD&C Act (21 U.S.C. 353b) describes the conditions that must be satisfied for drug products compounded by an outsourcing facility to be exempt from section 505 of the FD&C Act (21 U.S.C. 355) (concerning the approval of drugs under new drug applications (NDAs) or abbreviated new drug applications (ANDAs)), section 502(f)(1) (21 U.S.C. 352(f)(1)) (concerning the labeling of drugs with adequate directions for use), and section 582 of the FD&C Act (21 U.S.C. 360eee-1) (concerning drug supply chain security requirements).
Compounded drug products that meet the conditions in section 503B are not exempt from current good manufacturing practice (CGMP) requirements in section 501(a)(2)(B) of the FD&C Act (21 U.S.C. 351(a)(2)(B)).
One of the conditions that must be met for a drug product compounded by an outsourcing facility to qualify for the exemptions under section 503B of the FD&C Act is that the outsourcing facility may not compound a drug using a bulk drug substance unless: (1) the bulk drug substance appears on a list established by the Secretary of Health and Human Services identifying bulk drug substances for which there is a clinical need (the 503B Bulks List) or (2) the drug compounded from the bulk drug substance appears on the drug shortage list in effect under section 506E of the FD&C Act (21 U.S.C. 356e) at the time of compounding, distribution, and dispensing.
Section 503B of the FD&C Act directs FDA to establish the 503B Bulks List by: (1) publishing a notice in the
FDA has published a series of
For purposes of section 503B of the FD&C Act,
In the
As FDA evaluates bulk drug substances, it intends to publish notices for public comment in the
FDA intends to maintain a list of all bulk drug substances it has evaluated on its website, and separately identify bulk drug substances it has placed on the 503B Bulks List and those it has decided not to place on the 503B Bulks List. This list is available at
FDA is evaluating bulk drug substances nominated for the 503B Bulks List on a rolling basis. FDA intends to evaluate and publish in the
As noted above, the 503B Bulks List includes bulk drug substances for which the Agency has determined there is a clinical need. The Agency is evaluating bulk drug substances that were nominated for inclusion on the 503B Bulks List, proceeding case by case, under the clinical need standard provided by the statute (Ref. 2).
All of the bulk drug substances that we are addressing in this notice are components of FDA-approved drug products,
(1) Is there a basis to conclude, for each FDA-approved product that includes the nominated bulk drug substance, that: (a) an attribute of the FDA-approved drug product makes it medically unsuitable to treat certain patients for a condition that FDA has identified for evaluation and (b) the drug product proposed to be compounded is intended to address that attribute?
(2) Is there a basis to conclude that the drug product proposed to be compounded must be produced from a bulk drug substance rather than from an FDA-approved drug product?
The reason for question 1 is that unless an attribute of the FDA-approved drug is medically unsuitable for certain patients, and a drug product compounded using a bulk drug substance that is a component of the approved drug is intended to address that attribute, there is no clinical need to compound a drug product using that bulk drug substance. Rather, such compounding would unnecessarily expose patients to the risks associated with drug products that do not meet the standards applicable to FDA-approved drug products for safety, effectiveness, quality, and labeling and would undermine the drug approval process. The reason for question 2 is that to place a bulk drug substance on the 503B Bulks List, FDA must determine that there is a clinical need for outsourcing facilities to compound a drug product
If the answer to both of these questions is “yes,” there may be a clinical need for outsourcing facilities to compound using the bulk drug substance, and we would evaluate the substance further, applying the factors described below. If the answer to either of these questions is “no,” we generally would not include the bulk drug substance on the 503B Bulks List, because there would not be a basis to conclude that there may be a clinical need to compound drug products using the bulk drug substance instead of administering an approved drug or compounding starting with an approved drug product. FDA answered “yes” to both of the threshold questions for two of the bulk drug substances that are components of approved drug products that we are addressing in this notice. Accordingly, as explained further below, we proceeded further in our evaluation of these substances by conducting a balancing test and are proposing to include those substances on the 503B Bulks List.
We are conducting a balancing test using four factors. Specifically, on a substance-by-substance basis, we consider available data relevant to each factor in the context of the other factors and balance all four factors to determine whether the statutory “clinical need” standard has been met. The balancing test includes the following factors:
• The physical and chemical characterization of the substance;
• Any safety issues raised by the use of the substance in compounding;
• The available evidence of effectiveness or lack of effectiveness of a drug product compounded with the substance, if any such evidence exists; and
• Current and historical use of the substance in compounded drug products, including information about the medical condition(s) that the substance has been used to treat and any references in peer-reviewed medical literature.
The discussion below reflects FDA's consideration of these four factors where they are applicable and describes how they were applied to develop FDA's proposal to include three entries addressing two bulk drug substances on the 503B Bulks List.
In this notice, FDA evaluated certain nominated bulk drug substances for potential inclusion on the 503B Bulks List either alone or in combination with other bulk drug substances. FDA will not consider comments raising different combinations of bulk drug substances than those evaluated by FDA in this notice to be within the scope of this notice. New nominations may be submitted to docket FDA-2015-N-3469 for combinations of bulk drug substances that were not previously nominated and included for evaluation in this notice. The docket is available on
To assess whether there is a clinical need for outsourcing facilities to use a bulk drug substance in compounding, FDA must evaluate the drug products that have been proposed to be made from the nominated bulk drug substances. Therefore, FDA's evaluation of a bulk drug substance includes detailed consideration of the drug products that are proposed to be compounded, including the conditions justifying clinical need under the applicable statutory standard. Comments on FDA's preliminary evaluation of a bulk drug substance should include adequate support for the commenter's position. For example, a commenter writing to support inclusion of a nominated bulk drug substance on the 503B Bulks List should include sufficient information to permit a meaningful clinical need evaluation by FDA of the proposed product. Commenters writing in favor of or in opposition to a proposal to include or not to include an entry on the 503B Bulks List should address, for each proposed compounded drug product, the factors FDA evaluated in making its proposal.
In preparing its proposal to include two bulk drug substances on the 503B Bulks List, FDA considered whether the clinical need for the bulk drug substance in the proposed compounded drug product is limited by, for example, route of administration or dosage form. As appropriate, and as explained further below, the Agency has tailored its proposed entries on the 503B Bulks List to reflect its findings related to clinical need for the bulk substances proposed for inclusion on the list. FDA requested comments on the proposal to limit listings in this manner in our
Consistent with the approach described in the 2020 notice, and as reflected in the entries that appear on the 503B Bulks List to date, the entries proposed in this notice would authorize use of two bulk drug substances. Arginine HCl would be authorized for use to compound single-ingredient drug products for oral use only; lysine HCl would be authorized for use to compound single-ingredient drug products for oral use; and lysine HCl would also be authorized for use in combination with FDA-approved, single-ingredient arginine HCl injection, U.S. Pharmacoepia (USP) to compound drug products for intravenous (IV) use only.
Because the substances in this section are components of FDA-approved drug products, we considered whether: (1)
Arginine HCl was nominated as a bulk drug substance for the 503B Bulks List to compound drug products that are used for acute hyperammonemia in urea cycle disorders (UCDs) and refractory metabolic alkalosis, among other conditions.
Because arginine HCl is a component of an FDA-approved drug product, we considered whether: (1) there is a basis to conclude that an attribute of the FDA-approved drug product that contains arginine HCl makes it medically unsuitable to treat certain patients for a condition that FDA has identified for evaluation, and the arginine HCl drug product proposed to be compounded is intended to address that attribute in the FDA-approved drug product and (2) whether the drug product proposed to be compounded must be compounded using a bulk drug substance. In addition, because we answered these two questions in the affirmative for an oral arginine HCl compounded drug product, we also conducted a balancing test to further evaluate this bulk drug substance by considering and applying the four factors described above.
A nominator proposes that there is a clinical need for an oral, single-ingredient arginine HCl compounded drug product to treat patients with certain UCDs. The references submitted with the nomination describe the use of arginine HCl orally for long-term maintenance therapy in patients with UCDs. There is a basis to conclude that the FDA-approved drug product that contains only arginine HCl (R-Gene 10) is medically unsuitable to treat patients who require long-term oral maintenance therapy because the approved drug product is only available for intravenous administration and would not be suitable for the use proposed in the nomination, which would involve daily oral administration.
A nominator also proposes that there is a clinical need for an intravenous single-ingredient arginine HCl
FDA finds that there is a basis to conclude that the oral drug products proposed to be compounded must be made from a bulk drug substance rather than from FDA-approved R-Gene 10 because of the difficulties and complexities associated with starting with the approved solution for intravenous administration and converting it either to capsules or to a powder for dispersion that would be administered orally. The nominator also proposed to compound an oral solution of arginine HCl that is at a higher concentration than the approved intravenous product (100 mg/mL). There is a basis to conclude that the proposed oral liquid drug product must also be compounded starting from the bulk drug substance because of the difficulties and complexities associated with compounding a more concentrated solution beginning with the approved product.
With regard to an intravenous, single-ingredient arginine HCl compounded drug product proposed to treat patients with refractory metabolic alkalosis, the nominator has not identified patients for whom the approved products are medically unsuitable or identified an attribute of the approved drug product that the proposed compounded drug product is intended to address. Because the nominations do not identify specific differences between drug products that would be compounded using arginine HCl and the approved drug product containing arginine HCl, there is nothing for FDA to evaluate under question 2 for intravenous single-ingredient arginine HCl.
Because FDA answered “yes” to both of the threshold questions for arginine HCl for oral administration, we next conducted the following balancing testing to determine whether the statutory “clinical need” standard has been met. We considered data and information regarding the physical and chemical characterization of arginine HCl, safety issues raised by use of this substance in compounding, available evidence of effectiveness or lack of effectiveness, and historical and current use in compounding.
Arginine HCl is a well-characterized amino acid and is stable under ordinary storage conditions. Provided the quality of arginine HCl meets the standards in its USP drug substance monograph, arginine HCl is well characterized physically and chemically.
Oral administration of arginine HCl does not raise serious safety issues. The available literature and general clinical practice guidelines for the treatment of UCDs indicate that the oral formulation of arginine HCl may be effective in treating UCDs. There is evidence of the historical and current use of arginine HCl in compounding as an oral formulation for the treatment of UCDs (except those with arginase deficiency) in the United States, Belgium, and the United Kingdom. There are no FDA-approved oral arginine HCl drug products in the United States.
Arginine HCl is a well-characterized amino acid, does not raise serious safety concerns, may be effective in treating UCDs, and there is evidence of historical and current use of arginine HCl in compounding. Therefore, on balance, the physical and chemical characterization, safety, effectiveness, and historical and current use of arginine HCl for oral use weigh in favor of including this substance on the 503B Bulks List. Accordingly, we propose adding arginine HCl to the 503B Bulks List for oral use only.
Lysine HCl was nominated as a bulk drug substance for the 503B Bulks List to compound drug products that are used to correct lysine deficiency with lysinuric protein intolerance (LPI) and for prophylaxis and acute treatment of herpes simplex outbreak, among other conditions.
Because lysine HCl is a component of FDA-approved drug products, we considered whether: (1) there is a basis to conclude that an attribute of each FDA-approved drug product that contains lysine HCl makes each one medically unsuitable to treat certain patients for a condition that FDA has identified for evaluation, and the lysine HCl drug product proposed to be
A nominator proposes that there is a clinical need for an oral, single-ingredient lysine HCl compounded drug product to treat patients with lysine deficiency with LPI and for prophylaxis and treatment of acute herpes simplex outbreak. We find there is a basis to conclude that the FDA-approved drug products that contain lysine HCl are medically unsuitable for the proposed uses. The approved drug products all contain lysine HCl in combination with multiple other amino acids and are for intravenous administration. The nominators did not provide, and FDA did not otherwise identify, evidence that these additional active ingredients are needed to treat the conditions proposed by the nominators. In addition, the approved products are only available for intravenous administration and would not be suitable for the uses proposed in the nominations, which would involve daily oral administration. Accordingly, FDA finds that the drug products proposed to be compounded, oral formulations of single-ingredient lysine HCl, are intended to address the attribute of the approved drugs that makes them medically unsuitable for some patients.
FDA finds that there is a basis to conclude that the oral drug products containing lysine as the single ingredient proposed to treat patients with lysine deficiency with LPI and for prophylaxis and treatment of acute herpes simplex outbreak must be produced from a bulk drug substance because of the difficulties and complexities associated with removing lysine HCl from the approved products, which are all multiple amino acid solutions.
Because FDA answered “yes” to both of the threshold questions for lysine HCl, we next conducted the following balancing testing to determine whether the statutory “clinical need” standard has been met. We considered data and information regarding the physical and chemical characterization of lysine HCl, safety issues raised by use of this substance in compounding, available evidence of effectiveness or lack of effectiveness, and historical and current use in compounding.
Lysine HCl is well-characterized chemically and physically and is expected to be stable under ordinary storage conditions. Provided the quality of lysine HCl meets the standards in its USP drug substance monograph, lysine HCl is well characterized physically and chemically.
The available data do not provide evidence to support the effectiveness of oral lysine in the prophylaxis or treatment of herpes simplex, and a number of FDA-approved therapies are available for acute treatment and prophylaxis of herpes simplex. Oral lysine is also nominated for use in LPI, an extremely rare disease, the exact prevalence of which in the United States is unknown. Oral lysine is used in the treatment of LPI patients in small doses established and prescribed on a per patient basis to avoid gastrointestinal intolerance. Published data show that oral lysine normalizes plasma concentration of lysine in patients with LPI. While the long-term results are inconclusive as to whether chronic supplementation or intermittent supplementation is consistently helpful (or needed), they do suggest a positive impact on growth in some patients. In addition, there are no FDA-approved products indicated for the treatment of LPI and no FDA-approved, single-ingredient lysine drug products for lysine supplementation. Oral use of lysine HCl does not raise serious safety issues. The most commonly reported adverse events of abdominal pain and diarrhea are associated with high doses of lysine HCl and are usually prevented by titrating the dose to a lower acceptable level. There is evidence regarding the current and historical use of lysine HCl in pharmacy compounding, commonly in an injectable dosage form, within the United States. We found no evidence of current or historical use of a compounded lysine HCl product for oral administration.
Lysine HCl is well-characterized chemically; does not raise serious safety issues; and although the data do not support the effectiveness of lysine HCl in the prophylaxis or treatment of herpes simplex, published data show that oral lysine normalizes plasma concentration of lysine in patients with LPI. There is evidence of historical and current use of lysine HCl in compounding. Therefore, on balance, the physical and chemical characterization, safety, effectiveness, and historical and current use of lysine HCl weigh in favor of including this substance for oral use on the 503B Bulks List. Accordingly, we propose adding lysine HCl to the 503B Bulks List for oral use only.
Lysine HCl was also nominated for the 503B Bulks List both as a single-ingredient and in combination with arginine HCl.
Because lysine HCl and arginine HCl are components of FDA-approved drug products, we considered whether: (1) there is a basis to conclude that an attribute of each FDA-approved drug product that contains lysine HCl or arginine HCl makes each one medically unsuitable to treat certain patients for a condition that FDA has identified for evaluation, and the lysine HCl and arginine HCl drug products proposed to be compounded are intended to address that attribute in each FDA-approved drug product and (2) whether the drug product proposed to be compounded must be compounded using a bulk drug substance. In addition, because we answered these two questions in the affirmative for lysine HCl for the intravenous route of administration, we also conducted a balancing test to further evaluate both the proposed lysine HCl single-ingredient product and the use of lysine HCl to compound a drug product containing both lysine HCl and FDA-approved arginine HCl by considering and applying the four factors described above.
A nominator proposes that there is a clinical need for an intravenous product containing a unique combination of lysine HCl and arginine HCl to be used in patients receiving LUTATHERA treatment.
The drug product proposed to be compounded is intended to address the attributes of the approved drugs that make them medically unsuitable for some patients because the nominator proposes to compound an intravenous formulation containing both lysine HCl and arginine HCl without additional active ingredients.
A nominator also proposes that there is a clinical need for an intravenous product containing lysine HCl as a single ingredient (
The drug product proposed to be compounded is intended to address the attribute of the approved drug that makes it medically unsuitable for some patients because the nominator proposes to compound an intravenous product containing lysine HCl as the single ingredient, without the other amino acids that are present in the approved drug product.
In order to compound the proposed drug product containing a combination of lysine HCl and arginine HCl, FDA has a basis to conclude that lysine HCl must be compounded from bulk drug substance rather than from the FDA-approved drug products. The bulk drug substance lysine HCl must be used because of the difficulties and complexities associated with removing lysine HCl from the approved drug products that contain multiple other amino acids (
FDA does not have a basis to conclude that, in order to compound the proposed drug product, arginine HCl must be compounded from a bulk drug substance rather than from the FDA-approved drug product. There is one FDA-approved drug product containing arginine HCl as the single ingredient (R-Gene 10). R-Gene 10 is a solution of 10 g/100 mL of arginine HCl, USP in water for injection, USP. We do not anticipate compatibility or stability issues if this approved drug product is used as the starting material to be combined with the bulk drug substance lysine HCl to produce a combined solution of lysine HCl and arginine HCl at the concentration proposed in the nomination. The pH of the compounded drug product must be adjusted to the target pH irrespective of the source of arginine HCl (R-Gene 10 or bulk drug substance). In addition, the desired osmolarity of <1050 mOsmol is attainable irrespective of the source of arginine (R-Gene 10 or bulk drug substance) used for compounding the
For the same reason that there is a basis to conclude that lysine HCl for combination with arginine HCl must be compounded from a bulk drug substance, there is also a basis to conclude that lysine HCl as a single-ingredient compounded drug product for the intravenous route of administration must be produced from a bulk drug substance. As with the preceding analysis, this is because of the difficulties and complexities associated with removing lysine HCl from the approved multiple amino acid solutions.
Because FDA answered “yes” to both of the threshold questions for lysine HCl as a single ingredient for reducing the radiation dose to the kidneys during PRRT and for use in combination with FDA-approved arginine HCl, we next conducted the following balancing test to determine whether the statutory “clinical need” standard has been met. We considered data and information regarding the physical and chemical characterization of lysine HCl as a single ingredient and in combination with arginine HCl, safety issues raised by use of these substances in compounding, available evidence of effectiveness or lack of effectiveness, and historical and current use in compounding.
Arginine HCl and lysine HCl are well characterized physically and chemically. Each of these amino acids has a USP drug substance monograph. In addition, lysine HCl and arginine HCl are stable under ordinary storage conditions. The FDA-approved arginine HCl drug product, R-Gene 10, is stable at room temperature. Therefore, provided the quality of lysine HCl meets the standards in its USP drug substance monograph and L-arginine HCl is used starting from the FDA-approved drug product, R-Gene 10, both these components are physically and chemically well characterized.
Safety risks associated with the combination of lysine HCl and arginine HCl for intravenous infusion are not such that they outweigh the benefits, and can be managed. The most common adverse events associated with its use are nausea and vomiting. Although there are hyperkalemia concerns associated with lysine HCl/arginine HCl infusion, this risk could be monitored and managed, if necessary. There is evidence of effectiveness of lysine HCl as a single ingredient during PRRT; however, lysine HCl as a single ingredient for intravenous administration is associated with a higher risk of and more severe hyperkalemia and a higher incidence of vomiting than the lysine HCl/arginine HCl combination for intravenous administration. There is evidence of effectiveness of combination lysine HCl and arginine HCl infusions for reducing the radiation dose to the kidneys during PRRT in the published literature and as described in the approved labeling of LUTATHERA. There is also evidence in the published literature that suggests that combination lysine HCl/arginine HCl compounded intravenous infusions produce less nausea than FDA-approved amino acid solutions when used to reduce the radiation dose to the kidneys during PRRT, and therefore would lead to fewer episodes of vomiting. There is current and historical evidence that lysine HCl and arginine HCl are used in combination to compound injectable drug products within the United States for nephroprotection during PRRT. There also appears to be current and historical evidence that lysine HCl and arginine HCl are used in combination to compound injectable drug products outside the United States.
On balance, consideration of the physical and chemical characterization, safety, effectiveness, and historical and current use weighs against lysine HCl as a single ingredient (bulk drug substance) for intravenous use, but weighs in favor of placement on the 503B Bulks List of lysine HCl (bulk drug substance) in combination with FDA-approved, single ingredient arginine HCl injection for intravenous use only. Accordingly, we propose adding lysine HCl for use in combination with FDA-approved, single-ingredient arginine HCl injection to the 503B Bulks List for intravenous use only. FDA encourages public comment on any particular considerations related to compounding a drug product using FDA-approved, single-ingredient arginine HCl injection in combination with lysine HCl (bulk drug substance).
Due to the safety risks referred to above, if the lysine HCl in combination with FDA-approved, single-ingredient arginine HCl injection is placed on the 503B Bulks List, FDA intends to make safety information about the use of lysine HCl/arginine HCl available to prescribers, pharmacists, outsourcing facilities, and the public through information on FDA's website, in a safety guide, or through other mechanisms, as appropriate.
The three bulk drug substances that have been evaluated and that FDA is proposing not to place on the list are as follows: etomidate, furosemide, and rocuronium bromide. The reasons for FDA's proposals are included below.
Because the substances in this section are components of FDA-approved drug products, we considered, as applicable, one or both of the following questions: (1) is there a basis to conclude that an attribute of each FDA-approved drug product containing the bulk drug substance makes each one medically unsuitable to treat certain patients for a condition that FDA has identified for evaluation, and the drug product proposed to be compounded is intended to address that attribute and (2) is there a basis to conclude that the drug product proposed to be compounded must be compounded using a bulk drug substance.
Etomidate has been nominated for inclusion on the 503B Bulks List to compound drug products for the
The nominations do not explain why an attribute of each of the FDA-approved single dose, preservative-free 2 mg/mL solution products for intravenous injection is medically unsuitable for certain patients or identify an attribute of the approved drug products that the proposed compounded drug product is intended to address. FDA finds no basis to conclude that an attribute of the FDA-approved products makes them medically unsuitable to treat certain patients for a condition that FDA has identified for evaluation and that a proposed compounded product is intended to address.
Because the nominations do not identify specific differences between drug products that would be compounded using etomidate and approved drug products containing etomidate, there is nothing for FDA to evaluate under question 2.
Furosemide has been nominated for inclusion on the 503B Bulks List to compound drug products that treat congestive heart failure, edema, renal failure, and hypertension, among other conditions.
The nominations do not explain why an attribute of each of the FDA-approved preservative-free 40 mg per 4 mL (10 mg/mL) solution products for intravenous or intramuscular administration is medically unsuitable for certain patients or identify an attribute of the approved drug products that the proposed compounded drug products are intended to address. For example, the nominations propose to compound a preserved solution because the available FDA-approved products are preservative-free, but the nominations do not identify specific data or information supporting the need for a preserved product. FDA finds no basis to conclude that an attribute of the FDA-approved products makes them medically unsuitable to treat certain patients for a condition that FDA has identified for evaluation and that a proposed compounded product is intended to address.
Because the nominations have not identified a population for whom the approved products would be medically unsuitable, FDA has not evaluated whether the proposed preserved drug products containing furosemide must be compounded from bulk drug substances rather than using the approved drug product.
Rocuronium bromide has been nominated for inclusion on the 503B Bulks List to compound drug products that serve as an adjunct to general anesthesia to facilitate both rapid sequence and routine tracheal intubation and to provide skeletal muscle relaxation during surgery or mechanical ventilation.
The nominations do not explain why an attribute of each of the FDA-approved 10 mg/mL preservative-free solution products is medically unsuitable for certain patients or
Because the nominations do not identify specific differences between drug products that would be compounded using rocuronium bromide and approved drug products containing rocuronium bromide, there is nothing for FDA to evaluate under question 2.
For the reasons stated above, we tentatively conclude that there is a clinical need for outsourcing facilities to compound drug products using the bulk drug substances arginine HCl for oral use only, lysine HCl for oral use only, and lysine HCl in combination with FDA-approved single-ingredient arginine HCl for injection for intravenous use only. We therefore propose to include those bulk drug substances on the 503B Bulks List as described in this notice.
At this time, we find no basis to conclude that there is a clinical need for outsourcing facilities to compound drug products using the bulk drug substances etomidate, furosemide, and rocuronium bromide. Therefore, we propose not to include these bulk drug substances on the 503B Bulks List.
The following references marked with an asterisk (*) are on display at the Dockets Management Staff (see
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration's (FDA or Agency) Center for Drug Evaluation and Research (CDER) is proposing to withdraw approval of a new drug application (NDA) for Bufferin (aspirin) tablets, for which Bristol Myers Products Inc., 1350 Liberty Ave., Hillside, NJ 07205 is the last holder of record, and is announcing an opportunity for the holder of the NDA to request a hearing on this proposal. The basis for the proposal is that the holder of the NDA has repeatedly failed to file required annual reports for this NDA.
The holder of the NDA may submit a request for a hearing by December 23, 2022. Submit all data, information, and analyses upon which the request for a hearing relies by January 23, 2023. Submit electronic or written comments by January 23, 2023.
The request for a hearing may be submitted by the holder of the NDA by either of the following methods:
Submit electronic comments in the following way:
•
Submit written/paper submissions as follows:
•
• Because your request for a hearing will be made public, you are solely responsible for ensuring that your request does not include any confidential information that you or a third party may not wish to be posted, such as medical information, your or anyone else's Social Security number, or confidential business information, such as a manufacturing process. The request for a hearing must include the Docket No. FDA-2022-N-2796 for “Bristol Myers Products Inc.; Proposal To Withdraw Approval of a New Drug Application for Bufferin (Aspirin) Tablets; Opportunity for a Hearing.” The request for a hearing will be placed in the docket and publicly viewable at
• Confidential Submissions—To submit any data analyses with confidential information that you do not wish to be made publicly available, submit your data and analyses only as a written/paper submission. You should submit two copies total of all data and analyses. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available for public viewing and posted on
Jennifer Forde, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6228, Silver Spring, MD 20993-0002, 301-348-3035.
On June 30, 1948, NDA 006499 for Bufferin (aspirin) tablets became effective. The holder of NDA 006499 is currently identified in FDA's records as Bristol Myers Products Inc. The Agency has received conflicting information regarding the identity of the current NDA holder. However, to change the holder of record, information specified in § 314.72 (21 CFR 314.72) must be provided to the Agency. Since the time that the holder of record was identified as Bristol Myers Products Inc., the Agency has not received change of application ownership information that would satisfy the requirements of § 314.72. The Agency therefore is identifying Bristol Myers Products Inc. as the NDA holder of record in this
The holder of an approved NDA to market a new drug for human use is required to submit annual reports to FDA concerning its approved NDA under § 314.81 (21 CFR 314.81). The holder of NDA 006499 for Bufferin (aspirin) tablets has repeatedly failed to submit the required annual reports.
Therefore, notice is given to the holder of NDA 006499 and to all other interested persons that the Director of CDER proposes to issue an order, under section 505(e) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355(e)), withdrawing approval of NDA 006499 and all amendments and supplements thereto on the grounds that the holder of the NDA has failed to submit reports required under § 314.81.
In accordance with section 505 of the FD&C Act and part 314 (21 CFR part 314), the holder of NDA 006499 is hereby provided an opportunity for a hearing to show why the approval of NDA 006499 should not be withdrawn and an opportunity to raise, for administrative determination, all issues relating to the legal status of the drug product covered by NDA 006499.
Withdrawal of the approval of NDA 006499 will not impact nonprescription aspirin products that are legally marketed without an approved application as over the counter (OTC) monograph drugs in accordance with section 505G of the FD&C Act (21 U.S.C 355h), including conforming to applicable conditions of use specified in OTC Monograph M013: Internal Analgesic, Antipyretic, and Antirheumatic Drug Products for Over-the-Counter Human Use (See OTC
To seek a hearing, the NDA holder must file the following: (1) a written notice of participation and request for a hearing (see
The failure of the NDA holder to file a timely written notice of participation and request for a hearing, as required by § 314.200, constitutes an election by the NDA holder not to avail itself of the opportunity for a hearing concerning CDER's proposal to withdraw approval of the application and constitutes a waiver of any contentions concerning the legal status of the drug product. FDA will then withdraw approval of the application, and the drug product may not thereafter be lawfully introduced or delivered for introduction into interstate commerce. Any new drug product introduced or delivered for introduction into interstate commerce without an approved application is subject to regulatory action at any time.
A request for a hearing may not rest upon mere allegations or denials but must present specific facts showing that there is a genuine and substantial issue of fact that requires a hearing. If a request for a hearing is not complete or is not supported, the Commissioner of Food and Drugs will enter summary judgment against the person who requests the hearing, making findings and conclusions, and denying a hearing.
Paper submissions under this notice of opportunity for a hearing must be filed in two copies. Except for data and information prohibited from public disclosure under 21 U.S.C. 331(j) or 18 U.S.C. 1905, the submissions may be seen at the Dockets Management Staff (see
This notice is issued under section 505(e) of the FD&C Act and under authority delegated to the Director of CDER by the Commissioner of Food and Drugs.
Food and Drug Administration, HHS.
Notice of availability.
The Food and Drug Administration (FDA, Agency, or we) is announcing the availability of a final guidance for industry entitled “Compounding Certain Beta-Lactam Products in Shortage Under Section 503A of the Federal Food, Drug, and Cosmetic Act.” This guidance describes FDA's regulatory and enforcement priorities regarding preparation of beta-lactam oral antibiotic suspension products that appear on FDA's drug shortage list by a licensed pharmacist in a State-licensed pharmacy or Federal facility.
The announcement of the guidance is published in the
You may submit either electronic or written comments on Agency guidances at any time as follows:
Submit electronic comments in the following way:
•
• If you want to submit a comment with confidential information that you do not wish to be made available to the public, submit the comment as a written/paper submission and in the manner detailed (see “Written/Paper Submissions” and “Instructions”).
Submit written/paper submissions as follows:
•
• For written/paper comments submitted to the Dockets Management Staff, FDA will post your comment, as well as any attachments, except for information submitted, marked and identified, as confidential, if submitted as detailed in “Instructions.”
• Confidential Submissions—To submit a comment with confidential information that you do not wish to be made publicly available, submit your comments only as a written/paper submission. You should submit two copies total. One copy will include the information you claim to be confidential with a heading or cover note that states “THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.” The Agency will review this copy, including the claimed confidential information, in its consideration of comments. The second copy, which will have the claimed confidential information redacted/blacked out, will be available
You may submit comments on any guidance at any time (see 21 CFR 10.115(g)(5)).
Submit written requests for single copies of the guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Tracy Rupp, Office of Compounding Quality and Compliance, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993, 301-796-3100.
We are announcing the availability of a guidance for industry entitled “Compounding Certain Beta-Lactam Products in Shortage Under Section 503A of the Federal Food, Drug, and Cosmetic Act.” This guidance is being implemented without prior public comment because FDA has determined that prior public participation for this guidance is not feasible or appropriate (see section 701(h)(1)(C) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 371(h)(1)(C)) and 21 CFR 10.115(g)(2)). This guidance document is being implemented immediately because of the public health need for amoxicillin oral antibiotic suspension products, but it remains subject to comment in accordance with the Agency's good guidance practices.
This guidance describes the Agency's regulatory and enforcement priorities regarding preparation of beta-lactam oral antibiotic suspension products that appear on FDA's drug shortage list by a licensed pharmacist in a State-licensed pharmacy or Federal facility. FDA has received a number of reports related to increased demand for amoxicillin oral antibiotic suspension products in particular. Amoxicillin oral antibiotic powder for suspension products currently appear on FDA's drug shortage list. FDA has also received requests for clarification about preparation of compounded versions of those products from FDA-approved tablets and capsules.
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on “Compounding Certain Beta-Lactam Products in Shortage Under Section 503A of the FD&C Act.” It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This guidance contains no collection of information. Therefore, clearance by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) is not required.
Persons with access to the internet may obtain the document at
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of a meeting of the National Advisory General Medical Sciences Council.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended, notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Information is also available on the Institute's/Center's home page:
Federal Emergency Management Agency, Department of Homeland Security.
60-Day notice of revision and request for comments.
The Federal Emergency Management Agency (FEMA), as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on an extension, with change, of a currently approved information collection. In accordance with the Paperwork Reduction Act of 1995, this notice seeks comments concerning FEMA's Hazard Mitigation Assistance (HMA) financial and technical assistance programs; specifically, the Pre-Disaster Mitigation Program (PDM), the Building Resilient Infrastructure and Communities (BRIC) program, BRIC Direct Technical Assistance (DTA), and the Flood Mitigation Assistance (FMA) program.
Written comments must be received on or before January 23, 2023.
Submit comments at
All submissions received must include the agency name and Docket ID. Regardless of the method used for submitting comments or material, all submissions will be posted, without change, to the Federal eRulemaking Portal at
Jennie Orenstein, Branch Chief, Policy, Tools and Training Branch, Federal Insurance and Mitigation Administration, FEMA, at
This collection of information is necessary to implement grants for the FMA, PDM, and BRIC programs.
The FMA program is authorized pursuant to the National Flood Insurance Act of 1968, as amended (Pub. L. 90-448, 42 U.S.C. 4104c). FMA was created as part of the National Flood Insurance Reform Act (NFIRA) of 1994 (Pub. L. 103-325, 42 U.S.C. 4001). The Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), Pub. L. 112-141, 42 U.S.C. 4001) consolidated the Repetitive Flood Claims (RFC) and Severe Repetitive Loss grant (SRL) programs into FMA. Under FMA, cost-share requirements were changed to allow more Federal funds for properties with repetitive flood claims. The FMA program, under 44 CFR part 77 (October 1, 2021; previously under 44 CFR part 79), provides funding for measures taken to reduce or eliminate the long-
On August 4, 2020, FEMA established the BRIC program, implementing section 1234 of Disaster Recovery Reform Act (DRRA) (Pub. L. 93-288, 42 U.S.C. 5121
The guiding principles of the BRIC program include (1) support State and local governments, Tribes, and territories through capability- and capacity-building to enable them to identify mitigation actions and implement projects that reduce risks posed by natural hazards; (2) encourage and enable innovation while allowing flexibility, consistency, and effectiveness; (3) promote partnerships and enable high-impact investments to reduce risk from natural hazards with a focus on critical services and facilities, public infrastructure, public safety, public health, and communities; (4) provide a significant opportunity to reduce future losses and minimize impacts on the Disaster Relief Fund; (5) promote equity, including by helping members of disadvantaged groups and prioritizing 40 percent of the benefits to disadvantaged communities as referenced in Executive Order (E.O.) 14008,
The BRIC program is authorized under section 203 of the Stafford Act to provide technical assistance for implementing predisaster hazard mitigation measures. BRIC implements this authority by providing non-financial DTA to eligible communities. The DTA initiative is specifically designed to assist economically disadvantaged rural communities, tribal entities, and Justice40 underserved communities. The Justice40 Initiative provides guidance on implementing environmental justice and equitable implementation of program resources. DTA delivers hazard mitigation assistance to communities who face resource barriers that prevent access to Hazard Mitigation grants and other Federal assistance grants.
In accordance with 2 CFR 200.203, FEMA requires all parties interested in receiving FEMA mitigation grants to submit an application package for grant assistance. Applications and subapplications for BRIC and FMA are submitted via FEMA GO. FEMA GO is the new system of record for grants for new grant applications beginning in Fiscal Year (FY) 2020.
The Mitigation (MT) eGrants system is used to manage FY 2022 FMA Swift Current grants, FMA annual grants awarded prior FY 2019 and Pre-Disaster Mitigation grant program offerings. The MT eGrants system is an intuitive, user-friendly, web-based application owned and operated by FIMA that allows eligible applicants and subapplicants to apply for grants and subgrants through the internet. MT eGrants is both an internal (FEMA-facing) system and an external facing system. The FEMA GO and MT eGrants systems were developed to meet the intent of the e-Government initiative, authorized by Federal Financial Assistance Management Improvement Act of 1999 (Pub. L. 106-107, 31 U.S.C. 6101). This initiative requires that all Government agencies both streamline grant application processes and provide for the means to electronically create, review, and submit a grant application via the internet.
Under 2 CFR part 200 (for BRIC and PDM) and 44 CFR 77.3 (FMA), Recipients must complete and submit progress report(s) to the FEMA Regional Administrator on a quarterly basis, certifying how the funds are being used and reporting on the progress of activities funded under the subrecipient awards made to the Recipient by FEMA. The Regional Administrator and Recipient negotiate the date for submission of the first report.
The Benefit Cost Determination is used to collect data to evaluate the proposed project's cost effectiveness. Mitigation projects must be cost effective to be eligible for Hazard Mitigation Assistance funding. Cost effectiveness is demonstrated through a FEMA-validated benefit cost analysis. The Environmental and Historic Preservation Review is used to collect information that is needed to ensure that a proposed project complies with applicable environmental and historic preservation regulations and laws. This information is collected to assure that adverse project impact is minimized according to the National Environmental Policy Act of 1969 (NEPA), as amended (Pub. L. 91-190, 42 U.S.C. 4321-4347); The Endangered Species Act of 1973 (ESA) (Pub. L. 93-205, 16 U.S.C. 1531); The National Historic Preservation Act of 1966 (Pub. L. 89-665, U.S.C. 16 U.S.C. 470); Executive Order (E.O.) 11988,
Comments may be submitted as indicated in the
Federal Emergency Management Agency, Department of Homeland Security.
60 Day notice of revision and request for comments.
The Federal Emergency Management Agency, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public to take this opportunity to comment on an extension, with change, of a currently approved information collection. In accordance with the Paperwork Reduction Act of 1995, this notice seeks comments regarding the requirements, grants management procedures, and implementation of grants awarded under the Hazard Mitigation Grant Program (HMGP), which is a post-disaster program that contributes funds toward the cost of hazard mitigation activities to reduce the risk of future damage, hardship, loss or suffering in any area affected by a major disaster.
Comments must be submitted on or before January 23, 2023.
To avoid duplicate submissions to the docket, please submit comments at
Jennie Orenstein, Chief, HMA Grants Policy Branch, at (202) 212-4071 or
Section 404 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5170c, authorizes the Hazard Mitigation Grant Program (HMGP). Program grant requirements and grants management procedures are outlined in 44 CFR part 206 subpart N, and 2 CFR parts 200 and 3002. The Federal Emergency Management Agency (FEMA) administers the HMGP, and Recipients implement the grants under the HMPG per grant agreement, rules, and regulations. The HMGP is a post-disaster program that contributes funds toward the cost of hazard mitigation activities to reduce the risk of future damage, hardship, loss or suffering in any area affected by a major disaster or any area affected by a fire for which assistance was provided under section 420 of the Stafford Act (42 U.S.C. 5187). Section 102 of the Stafford Act (42 U.S.C. 5122(4)) defines a “state” as any state of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the commonwealth of the Northern Mariana Islands. “Recipient”, as provided in 2 CFR 200, means a non-Federal entity that receives a Federal award directly from a Federal awarding agency to carry out an activity under a Federal program, or an Indian tribal government that chooses to act as a recipient rather than as a subrecipient. “Subrecipient” refers to a non-Federal entity that receives a subaward from a pass-through entity to carry out part of a Federal program; but does not include an individual that is a beneficiary of such program. A subrecipient may also be a recipient of other Federal awards directly from a Federal awarding agency. The term “Indian tribal government” is defined in Section 102 of the Stafford Act, 42 U.S.C. 5122(6), as the governing body of any Indian or Alaska Native tribe, band, nation, pueblo, village, or community that the Secretary of the Interior acknowledges to exist as an Indian tribe under the Federally Recognized Indian Tribe List Act of 1994. In addition, the Sandy Recovery Improvement Act of 2013 (Pub. L. 113-2, 42 U.S.C. 5170(b)) amended the Stafford Act to allow the Chief Executive of a federally recognized Indian tribe to make a direct request for a major disaster or emergency declaration to the President of the United States.
The Department of Homeland Security (DHS) adopted in its entirety the Uniform Administrative
The HMGP regulation describes the application process in 44 CFR 206.436. Information collected through the financial award application is the minimum information necessary for the financial award administration under the HMGP and includes the project narrative, analysis of the measure's cost-effectiveness referred to as the benefit-cost determination, and environmental review used in conjunction with OMB No. 1660-0025.
44 CFR 206.436(d) states: “The State must submit all local HMGP applications and funding requests for the purpose of identifying new projects to the Regional Administrator within 12 months of the date of disaster declaration.” Furthermore, Section 311 of the DHS Appropriations Act, 2022 (Pub. L. 117-103, 136 Stat. 331) states: “beginning between January 1, 2020, and December 31, 2021, the Federal share of assistance, including direct Federal assistance, provided under such sections shall be not less than 90 percent of the eligible cost of such assistance.” The legislation applies to all current FY 2022 HMGP local and Tribal sub applicants and significantly alters application and program financial management information collection requirements. The DHS Appropriations Act, 2022 does not provide additional funding for HMGP COVID-19 relief beyond the already established $3.46 billion.
Per 44 CFR 206.438(c), progress reports must be submitted by the HMGP Recipient to the Regional Administrator on a quarterly basis, certifying how the funds are being used and reporting on the progress of activities funded under the subrecipient awards made to the Recipient by FEMA. The Regional Administrator and Recipient negotiate the date for submission of the first report. Quarterly progress reports describe the status of those projects on which a final payment of the Federal share has not been made to the recipient, and outline any problems or circumstances expected to result in noncompliance with the approved award conditions.
The legislative changes are expected to trigger a significant increase in requests by local sub applicants who have not yet developed FY 2022 project applications. The requests will likely extend the application deadline beyond the standard 12-month deadline of August 5, 2022. Applications Period extension requests, authorized under 44 CFR 206.436(e), may add additional information collection burden.
The Foundations for Evidence-Based Policymaking Act of 2018 (Evidence Act) (Pub. L. 115-435, 5 U.S.C. 311-315) establishes evaluation using systematic data collection and analysis of programs, policies, and organizations intended to assess their effectiveness and efficiency as an essential program activity. Hazard Mitigation programs are currently revising information collections to simply data collection, reduce burden, coordinate data collection across programs, develop performance metrics, and meet goals and priorities as stipulated in the Evidence Act. Program implementation of the Evidence Act will necessitate changes to information collections. Additionally, the Build America, Buy America Act (BABAA) (Pub. L. 117-58, 70901-70927) and Executive Order (E.O.) 14008,
Comments may be submitted as indicated in the
Cybersecurity and Infrastructure Security Agency (CISA), Department of Homeland Security (DHS).
Notice of Federal Advisory Committee Act (FACA) meeting; request for comments.
CISA is publishing this notice to announce the following President's National Infrastructure Advisory Council (NIAC) meeting.
The meeting will be held virtually and will be open to the public, per 41 CFR 102-3.150(a)(4). Requests to participate will be accepted and processed in the order in which they are received. For access to the meeting, information on services for individuals with disabilities, or to request special assistance, please email
•
•
A public comment period will take place from 2:30 p.m. to 2:40 p.m. Speakers who wish to participate in the public comment period must email
Erin McJeon, 202-819-6196,
The NIAC is established under section 10 of E.O. 13231 issued on October 16, 2001, continued and amended under the authority of E.O. 14048, dated September 30, 2021. Notice of this meeting is given under the Federal Advisory Committee Act (FACA), 5 U.S.C. appendix (Pub. L. 92-463). The NIAC provides the President, through the Secretary of Homeland Security, advice on the security and resilience of the Nation's critical infrastructure sectors.
Office of Policy Development and Research, Chief Data Officer, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for an additional 30 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW, Washington, DC 20410; email Colette Pollard at
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
The
This collection of information is required specifically for the application and administration of the Department of Housing and Urban Development, Federal Housing Administration Section 242 Hospital Mortgage Insurance Program pursuant to 24 CFR 242, 241, 223(f), and 223(a)(7). The collection is a comprehensive set of HUD documents that are critically needed for processing applications and loan endorsements for FHA mortgage insurance under the Section 242 Hospital Mortgage Insurance Program, for ongoing asset management of such facilities, and other information related to these facilities for loan modifications, construction projects, and physical and environmental reviews. This information is requested and is used by the Office of Healthcare Facilities (OHF) and Office of Architecture and Engineering (OAE) within FHA's Office of Healthcare Programs (OHP).
The purpose for which the information is being collected by HUD is to review Section 242 applications to determine the eligibility of applicant hospitals for FHA mortgage insurance, underwrite insured hospital loans, ensure that the collateral securing each loan is adequate, capture administrative data, process initial/final endorsement, and manage FHA's hospital portfolio. Additional information related to loan modifications, construction projects, and physical and environmental reviews is collected if applicable.
The information being collected consists of various HUD forms that program participants complete with project specifications, technical descriptions, details, and/or signatures that are utilized by HUD during various stages of the application, underwriting, commitment, closing, and asset management processes involved with the administration of FHA's Section 242 mortgage insurance program.
The information is used by HUD staff for internal review of applications to determine if projects qualify for Section 242 hospital mortgage insurance and to manage and monitor the application, commitment, initial/final endorsement, asset management, and administration processes needed to support hospital projects insured by FHA. Agreements and legal documents are used by HUD staff, lenders, borrowers, construction managers, and depository institutions, when applicable, to process initial/final endorsement of loans. Information reported for ongoing asset management of FHA-insured facilities will be used by HUD staff to monitor and manage risk within the FHA portfolio and ensure ongoing compliance with HUD Program Obligations. Information is also used by HUD staff to determine whether the Program meets its stated goals and management objectives. The information is collected from lenders/mortgage bankers, borrowers/hospital management officials, attorneys, general contractors/construction managers, architects/engineers, agents and others involved in hospital projects, which may, at times include local government entities and other third parties, as well as HUD staff to allow OHF to manage and monitor the application, commitment, initial/final endorsement, asset management, and administration processes needed to support hospital projects insured by FHA.
This collection is needed to update and renew the current collection that was approved for a 36-month period by OMB on November 12, 2019, with an expiration date of November 30, 2022.
Three new forms are being added to this collection that are listed in the table above: HUD-90032-OHF (Lender Narrative—Interest Rate Reduction), HUD-90033-OHF (Lender's Certification in Support of Request for IRR), and HUD-2510R (Release of Regulatory Agreement). The HUD-90033-OHF and HUD-90032-OHF are being added for occasional situations involving interest rate reductions of FHA-insured hospital loans. The forms allow the lender to summarize the rationale for the request and certify that programmatic requirements for interest rate reductions have been met. The documents are based on OHF draft guidance as well as similar forms used by the Section 232 program. The HUD-2510R has been added to facilitate the process regarding the release and discharge of the Regulatory Agreement.
Two forms will be removed from the collection: HUD-91111-OHF (Survey Instructions and Borrower's Certification) and HUD-94128-OHF (Environmental Assessment and Compliance Findings for the Related Laws). The HUD-91111-OHF will be removed from the collection and the information from this form has been combined with HUD-91073-OHF (formally: HUD Survey Instructions and Surveyor's Report; and now renamed: HUD Survey Instructions, Surveyor's Report, and Borrower's Survey Certification). The HUD-94128-OHF will be removed from the collection because HUD's Environmental Review Online System (HEROS) is now used to prepare environmental reviews.
The Public Burden Statement and the Warning have been revised on all forms.
Three documents within the collection are being renewed with only changes to the revised Public Burden Statement and the Warning. The remaining thirty-seven of the forty forms within the collection are being renewed with changes. Revisions include edits that were made to clarify current policies and definitions, reflect updated general accepted accounting standards, or to address inconsistencies across documents.
A summary of the specific changes (beyond the Public Burden Statement and the Warning) made to the revised documents is provided below.
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Section 8(b)(ii)(1) and 8(b)(ii)(3) for Conditions to be Satisfied During and Following Construction. Expanded the report to include “deferred work or limited rehabilitation” for consistency with terminology in this section and clarify terms for Construction or repairs.
Section 10(b) for Property and Operation; Encumbrances. Language changed to allow Borrowers to adjudicate liens, etc. in good faith with HUD's permission.
Section 11(f) for Finances and Financial Records. Changed “reasonable time” to “10 business days” to better define the timeline to submit the documents. Added “shall be maintained in accordance with U.S. GAAP” to differentiate from OHF reporting requirements as required in the OHF Handbook. Although it should be obvious, 24 CFR 5.801 for uniform reporting financial standards for HUD programs does not specifically include the 242/OHF Program. Section 11(f) for Finances and Financial Records.
Section 11(g) for Finances and Financial Records. Added language to allow HUD or its representatives to ask questions on the finances, operation and condition of the property.
Section 13 for Mortgage Reserved Fund (MRF). Added clarifying language on type of account and beneficiary.
Section 19(a)(i) for Additional Indebtedness and Leasing for Long Term Debt: reordered some of the subsections and added some clarifying language as it relates to proposed debt.
Section 19(d) for Additional Indebtedness—Reporting Requirements: Changed the reporting requirements to an annual report due within 40 days of the Borrower's fiscal year.
Section 45 for Definitions. Clarified definitions.
•
•
•
•
•
•
•
•
This notice is soliciting comments from members of the public and affected
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
(5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
HUD encourages interested parties to submit comment in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Bureau of Indian Affairs, Interior.
Notice.
The Bureau of Indian Affairs (BIA) approved the Saginaw Chippewa Indian Tribe of Michigan Leasing Ordinance under the Helping Expedite and Advance Responsible Tribal Homeownership Act of 2012 (HEARTH Act). With this approval, the Tribe is authorized to enter into business leases without further BIA approval.
BIA issued the approval on November 17, 2022.
Ms. Carla Clark, Bureau of Indian Affairs, Division of Real Estate Services, 1001 Indian School Road NW, Albuquerque, NM 87104,
The HEARTH Act makes a voluntary, alternative land leasing process available to Tribes, by amending the Indian Long-Term Leasing Act of 1955, 25 U.S.C. 415. The HEARTH Act authorizes Tribes to negotiate and enter into business leases of Tribal trust lands with a primary term of 25 years, and up to two renewal terms of 25 years each, without the approval of the Secretary of the Interior (Secretary). The HEARTH Act also authorizes Tribes to enter into leases for residential, recreational, religious or educational purposes for a primary term of up to 75 years without the approval of the Secretary. Participating Tribes develop Tribal Leasing regulations, including an environmental review process, and then must obtain the Secretary's approval of those regulations prior to entering into leases. The HEARTH Act requires the Secretary to approve Tribal regulations if the Tribal regulations are consistent with the Department of the Interior's (Department) leasing regulations at 25 CFR part 162 and provide for an environmental review process that meets requirements set forth in the HEARTH Act. This notice announces that the Secretary, through the Assistant Secretary—Indian Affairs, has approved the Tribal regulations for the Saginaw Chippewa Indian Tribe of Michigan.
The Department's regulations governing the surface leasing of trust and restricted Indian lands specify that, subject to applicable Federal law, permanent improvements on leased land, leasehold or possessory interests, and activities under the lease are not subject to State and local taxation and may be subject to taxation by the Indian Tribe with jurisdiction. See 25 CFR 162.017. As explained further in the preamble to the final regulations, the Federal Government has a strong interest in promoting economic development, self-determination, and Tribal sovereignty. 77 FR 72440, 72447-48 (December 5, 2012). The principles supporting the Federal preemption of State law in the field of Indian leasing and the taxation of lease-related interests and activities applies with equal force to leases entered into under Tribal leasing regulations approved by the Federal Government pursuant to the HEARTH Act.
Section 5 of the Indian Reorganization Act, 25 U.S.C. 5108, preempts State and local taxation of permanent improvements on trust land.
The strong Federal and Tribal interests against State and local taxation of improvements, leaseholds, and activities on land leased under the Department's leasing regulations apply equally to improvements, leaseholds, and activities on land leased pursuant to Tribal leasing regulations approved under the HEARTH Act. Congress's overarching intent was to “allow Tribes to exercise greater control over their own land, support self-determination, and eliminate bureaucratic delays that stand in the way of homeownership and economic development in Tribal communities.” 158 Cong. Rec. H. 2682 (May 15, 2012). The HEARTH Act was intended to afford Tribes “flexibility to adapt lease terms to suit [their] business and cultural needs” and to “enable [Tribes] to approve leases quickly and efficiently.” H. Rep. 112-427 at 6 (2012).
Assessment of State and local taxes would obstruct these express Federal policies supporting Tribal economic development and self-determination, and also threaten substantial Tribal interests in effective Tribal government, economic self-sufficiency, and territorial autonomy.
Similar to BIA's surface leasing regulations, Tribal regulations under the HEARTH Act pervasively cover all aspects of leasing.
Accordingly, the Federal and Tribal interests weigh heavily in favor of preemption of State and local taxes on lease-related activities and interests, regardless of whether the lease is governed by Tribal leasing regulations or Part 162. Improvements, activities, and leasehold or possessory interests may be subject to taxation by the Saginaw Chippewa Indian Tribe of Michigan.
Bureau of Indian Affairs, Interior.
Notice.
This notice publishes the approval of the Tribal-State Gaming Compact between the State of California sand the Santa Rosa Indian Community of the Santa Rosa Rancheria (Compact) providing for Class III gaming between the Santa Rosa Indian Community of the Santa Rosa Rancheria (Tribe) and the State of California (State).
The Amendment takes effect on November 23, 2022.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Office of the Deputy Assistant Secretary—Policy and Economic Development, Washington, DC 20240,
Under section 11 of the Indian Gaming Regulatory Act (IGRA), Public Law 100-497, 25 U.S.C. 2701
Bureau of Indian Affairs, Interior.
Notice.
This notice publishes the approval of the Tribal-State Gaming Compact between the State of California sand the Tejon Indian Tribe (Compact) providing for Class III gaming between the Tejon Indian Tribe (Tribe) and the State of California (State).
The Amendment takes effect on November 23, 2022.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Office of the Deputy Assistant Secretary—Policy and Economic Development, Washington, DC 20240,
Under section 11 of the Indian Gaming Regulatory Act (IGRA), Public Law 100-497, 25 U.S.C. 2701
Bureau of Indian Affairs, Interior.
Notice.
The Assistant Secretary—Indian Affairs made a final agency determination to acquire in trust 92.18 acres, more or less, of land known as the Buschelle Site in Clearwater County, Wisconsin, (Site) for the White Earth Band of the Minnesota Chippewa Tribe, Minnesota, (Tribe) for gaming and other purposes.
This final determination was made on November 17, 2022.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Mailstop 3543, 1849 C Street NW, Washington, DC 20240,
On the date listed in the
The Assistant Secretary—Indian Affairs, on behalf of the Secretary of the Interior, will immediately acquire title to the Site in the name of the United States of America in trust for Tribe upon fulfillment of all Departmental requirements. The legal description for the Site is as follows:
The Southwest Quarter of the Northwest Quarter (SW1/4NW1/4) and Government Lot Four (4), Section Four (4), Township One Hundred Forty-six (146) North of Range Thirty-eight (38) West of the Fifth Principal Meridian in Clearwater County, Minnesota.
This notice is published in the exercise of authority delegated by the Secretary of the Interior to the Assistant Secretary—Indian Affairs by 209 Departmental Manual 8.1, and is published to comply with the requirements of 25 CFR 151.12 (c)(2)(ii) that notice of the decision to acquire land in trust be promptly provided in the
Bureau of Indian Affairs, Interior.
Notice.
The Assistant Secretary—Indian Affairs made a final agency determination to acquire in trust 320.04 acres, more or less, of land known as the Mettler Site in Kern County, California, (Site) for the Tejon Indian Tribe, (Tribe) for gaming and other purposes.
This final determination was made on November 17, 2022.
Ms. Paula L. Hart, Director, Office of Indian Gaming, Mailstop 3543, 1849 C Street NW, Washington, DC 20240,
On the date listed in the
The Assistant Secretary—Indian Affairs, on behalf of the Secretary of the Interior, will immediately acquire title to the Site in the name of the United States of America in trust for Tribe upon fulfillment of all Departmental requirements. The 320.04 acres, more or less, are described as follows:
The northeast quarter of Section 2, Township 11 North, Range 20 West, San Bernardino Meridian, in the unincorporated area of the County of Kern, State of California, according to the official plat thereof.
The northeast quarter of the southeast quarter of Section 2, Township 11 North, Range 20 West, San Bernardino Meridian, in the unincorporated area of the County of Kern, State of California, according to the official plat thereof.
The west half of the southeast quarter and the southeast quarter of the southeast quarter of section 2, township 11 north, range 20 West, San Bernardino Meridian, in the unincorporated area of the County of Kern, State of California, according to the official plat thereof.
Excepting therefrom all oil, gas, minerals and other hydrocarbon substances within or underlying said land, or that may be produced and saved therefrom, providing however, grantor, his successors and assigns shall not conduct drilling or other operations upon the surface of said land, but nothing herein contained shall be deemed to prevent the grantor, his successors and assigns, from extracting or capturing said minerals by drilling on adjacent or neighboring lands and/or from conducting subsurface drilling operations under said land at a depth of 100 feet below the surface of said land, so as not to disturb the surface of said land or any improvements thereon, as reserved by Chanslor-Western Oil and Development Company, a Delaware corporation, successor in interest to Chanslor-Canfield Midway Oil Company, a California corporation, in Deed recorded November 8, 1954, in Book 2317, Page 102, of Official Records.
All that portion of section 11, township 11 north, range 20 west, San Bernardino Meridian, in the unincorporated area of the County of Kern, State of California, according to the official plat thereof described as follows:
Beginning at the northeast corner of said section 11, thence South 78°07′14″ West 184.02 feet to the true point of beginning; thence South 89°48′55″ West 40.00 feet; thence North 0°11′05″ West 40.00 feet; thence North 89°48′55″ East 40.00 feet; thence South 0°11′05″ East 40.00 feet to the true point of beginning.
Excepting therefrom all oil, gas, minerals and other hydrocarbon substances within or underlying said land as reserved by Kern County Land Company, in Deed dated October 3,
Bureau of Land Management, Interior.
Notice.
The Department of Energy, Office of Legacy Management (DOE-LM) has filed an application with the Bureau of Land Management (BLM) requesting that the Secretary of the Interior exercise authority under Title II of the Uranium Mill Tailings Radiation Control Act of 1978 (UMTRCA) and permanently withdraw and transfer administrative jurisdiction to DOE-LM of 869.08 acres of public lands and 3,454.39 acres of Federal mineral estate at the Split Rock Site in Wyoming. The public land and interests in the land would be withdrawn from operation of the general land laws, including the United States mining laws, the mineral and geothermal leasing laws, and the mineral materials disposal laws, subject to valid existing rights, and would be transferred to DOE-LM for long term maintenance and monitoring under a Nuclear Regulatory Commission license as part of the Split Rock Disposal Cell Site. The BLM previously published notice of a DOE-LM application for withdrawal and transfer of jurisdiction for some of these lands and minerals for the same purpose in the
Comments must be received on or before December 23, 2022.
Comments should be sent to BLM Wyoming State Director, BLM Wyoming State Office, 5353 Yellowstone Road, Cheyenne, WY 82009.
Keesha Clay, Realty Specialist, BLM Wyoming State Office, (307) 775-6189, during regular business hours 8:00 a.m. to 4:30 p.m., Monday through Friday, except holidays. Individuals in the United States who are deaf, deafblind, hard of hearing, or have a speech disability may dial 711 (TTY, TDD, or TeleBraille) to access telecommunications relay services for contacting Ms. Clay. Individuals outside the United States should use the relay services offered within their country to make international calls to the point-of-contact in the United States.
The DOE-LM filed with the BLM an application that requests the Secretary of the Interior to permanently withdraw and transfer administrative jurisdiction over the following described public lands and federally owned minerals, subject to valid existing rights. DOE-LM has requested that the land and minerals be withdrawn from location and entry under the United States mining laws, from leasing under the mineral or geothermal leasing laws, and from disposal under the mineral materials laws, subject to valid existing rights. Under the UMTRCA, as amended by the Uranium Mill Tailings Remedial Action Amendments Act of 1988 (42 U.S.C. 7916), the Secretary of the Interior may make such permanent withdrawals and transfers of administrative jurisdiction. The Secretary's actions under UMTRCA are explicitly exempt from the withdrawal and transfer provisions of Section 204 of the Federal Land Policy and Management Act of 1976, as amended. The following legal land description includes public lands and Federal mineral interest underlying non-Federal surface estate in both the new application and the 2008 application. The public lands and Federal mineral estate are requested for permanent withdrawal and jurisdictional transfer for long term maintenance and monitoring by DOE-LM under applicable provisions of UMTRCA:
The areas described aggregate 869.08 acres of surface and Federal minerals.
The areas described aggregate approximately 3,454.39 acres of Federal minerals underlying non-Federal surface.
The purpose of the requested withdrawal and transfer of administrative jurisdiction is to allow the DOE-LM to administer the lands in perpetuity as a hazardous material site under the authority of the UMTRCA of 1978, 42 U.S.C. 7902
For a period until December 23, 2022, all persons who wish to submit comments, suggestions, or objections in connection with the DOE-LM application may present their views in writing to the BLM Wyoming State Office at the address listed in the
Your comments, including your name and street address, will be available for public review at the BLM Wyoming State Office during regular business hours 8:00 a.m. to 4:30 p.m. Monday through Friday, except Federal holidays. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
DOE-LM has acknowledged that segments of four National Historic Trails are present within the project area. The transfer of administrative jurisdiction would not invalidate or revoke the congressionally designated alignments of the National Historic Trail across the property, and trail wide administration would continue to be coordinated by the National Park Service.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the University of California, Berkeley has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary object and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary object were removed from Suffolk County, NY.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after December 23, 2022.
Alex Lucas, University of California, Berkeley; 50 University Hall, 2199 Addison Street, Berkeley, CA 94720, telephone (925) 791-7231, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the University of California, Berkeley. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the University of California, Berkeley.
Human remains representing, at minimum, two individuals were removed from Suffolk County, NY. They were excavated at an unknown date by F. (Frank) M. Smith, head of the Pacific Coast Borax Company. Originally from Wisconsin, his Borax mining operations were based in Death Valley. He resided in Oakland, but he had a summer residence on Shelter Island in Suffolk County, NY. The individuals and associated funerary items were donated and accessioned to the University in 1910. The one associated funerary object is a lot of faunal bones.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: archeological, geographical, historical, kinship, oral traditional, and expert opinion.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the University of California, Berkeley has determined that:
• The human remains described in this notice represent the physical remains of at least two individuals of Native American ancestry.
• The one object described in this notice is reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary object described in this notice and the Shinnecock Indian Nation.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after December 23, 2022. If competing requests for repatriation are received, the University of California, Berkeley must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. The University of California, Berkeley is responsible for sending a copy of this notice to the Indian Tribe identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Arizona State Museum (ASM) has completed an inventory of human
Repatriation of the human remains and associated funerary objects in this notice may occur on or after December 23, 2022.
Cristin Lucas, Repatriation Coordinator, Arizona State Museum, University of Arizona, P.O. Box 210026, Tucson, AZ 85721-0026, telephone (520) 626-0320, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of ASM. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the ASM.
Human remains representing, at minimum, one individual were removed from site AZ BB:14:1(ASM) in Pima County, AZ. The site was first recorded in 1925 by an archeology field class under the direction of Byron Cummings with the University of Arizona (UA). Permitted excavation was subsequently conducted in 1927 by Edward John Hands under the direction of the UA. Collections from these field seasons were brought to ASM following fieldwork; no accession number was assigned. In 1941, ASM loaned to the Harvard Peabody Museum of Archaeology and Ethnology (Peabody) a ceramic cremation vessel containing cremated human remains that had been removed from site AZ BB:14:1(ASM). The human remains and vessel remained at the Peabody until 2021 when they were recalled by ASM. No known individual was identified. The one associated funerary object is a ceramic cremation vessel.
The human remains and associated funerary object in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: anthropological, archeological, biological, geographical, historical, linguistic, and oral traditional.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, ASM has determined that:
• The human remains described in this notice represent the physical remains of one individual of Native American ancestry.
• The one object described in this notice is reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary object described in this notice and the Ak-Chin Indian Community (
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after December 23, 2022. If competing requests for repatriation are received, the ASM must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. ASM is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
National Park Service, Interior.
Notice.
The National Park Service is soliciting electronic comments on the significance of properties nominated before November 12, 2022, for listing or related actions in the National Register of Historic Places.
Comments should be submitted electronically by December 8, 2022.
Comments are encouraged to be submitted electronically to
Sherry A. Frear, Chief, National Register of Historic Places/National Historic Landmarks Program, 1849 C Street NW, MS 7228, Washington, DC 20240,
The properties listed in this notice are being considered for listing or related actions in the National Register of Historic Places. Nominations for their consideration were received by the National Park Service before November 12, 2022. Pursuant to Section 60.13 of 36 CFR part 60, comments are being accepted concerning the significance of
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
Additional documentation has been received for the following resource:
The State Historic Preservation Officer reviewed the following nominations and responded to the Federal Preservation Officer within 45 days of receipt of the nominations and supports listing the properties in the National Register of Historic Places.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the U.S. Department of the Interior, Bureau of Land Management (BLM Alaska) has completed an inventory of human remains and has determined that there is a cultural affiliation between the human remains and Indian Tribes or Native Hawaiian organizations in this notice. The human remains were removed from the Bethel Census Area, Alaska.
Repatriation of the human remains in this notice may occur on or after December 23, 2022.
Robert E. King, Bureau of Land Management, 222 W 7th Avenue, #13, Anchorage, AK 99513, telephone (907) 271-5510, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of BLM Alaska. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by BLM Alaska.
On September 9, 1907, human remains representing, at minimum, four individuals were removed from the Bethel Census Area, nearby the village of Bethel. They were removed during the 1905-1907 expedition to the middle of Alaska's Yukon Valley sponsored by the University of Pennsylvania Museum of Archaeology and Anthropology (Penn Museum) and conducted by George Byron Gordon, General Curator of American Archaeology, and his brother MacLaren Gordon. Subsequently, the human remains, which are over 150 years old, were brought back to the Penn Museum (PM 29-145-1, PM 29-145-2, PM 29-145-5, and PM 29-145-6). No known individuals were identified. No associated funerary objects are present.
The human remains in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: archeological information and oral tradition.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, BLM Alaska has determined that:
• The human remains described in this notice represent the physical remains of four individuals of Native American ancestry.
• There is a relationship of shared group identity that can be reasonably traced between the human remains described in this notice and the Orutsararmiut Traditional Native Council (
Written requests for repatriation of the human remains in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains in this notice to a requestor may occur on or after December 23, 2022. If competing requests for repatriation are received, BLM Alaska must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains are considered a single request and not competing requests. BLM Alaska is responsible for sending a copy of this notice to the Indian Tribe identified in this notice.
National Park Service, Interior.
Notice of Information Collection; request for comment.
In accordance with the Paperwork Reduction Act of 1995, we, the National Park Service (NPS) are proposing a new information collection.
Interested persons are invited to submit comments on or before December 23, 2022.
Send written comments on this information collection request (ICR) to the Office of Management and Budget's Desk Officer for the Department of the Interior by email at
To request additional information about this ICR, contact Dr. Stefanie Campbell at
In accordance with the PRA and 5 CFR 1320.8(d)(1), we provide the general public and other Federal agencies with an opportunity to comment on new, proposed, revised, and continuing collections of information. This helps us assess the impact of our information collection requirements and minimize the public's reporting burden. It also helps the public understand our information collection requirements and provide the requested data in the desired format.
A
As part of our continuing effort to reduce paperwork and respondent burdens, we are again soliciting comments from the public and other Federal agencies on the proposed ICR that is described below. We are especially interested in public comment addressing the following:
(1) Whether or not the collection of information is necessary for the proper performance of the functions of the agency, including whether or not the information will have practical utility.
(2) The accuracy of our estimate of the burden for this collection of information, including the validity of the methodology and assumptions used.
(3) Ways to enhance the quality, utility, and clarity of the information to be collected.
(4) How might the agency minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Comments that you submit in response to this notice are a matter of public record. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
The information collected will be used to determine the agents, sources, modes of transmission, or risk factors so that effective prevention and control measures can be implemented.
An agency may not conduct or sponsor and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number.
The authority for this action is the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the U.S. Department of the Interior, Bureau of Land Management (BLM Alaska) has completed an inventory of human remains and associated funerary objects and has determined that there is a cultural affiliation between the human remains and associated funerary objects and Indian Tribes or Native Hawaiian organizations in this notice. The human remains and associated funerary objects were removed from the Aleutians West Census Area, AK.
Repatriation of the human remains and associated funerary objects in this notice may occur on or after December 23, 2022.
Robert E. King, Bureau of Land Management, 222 W 7th Avenue, #13, Anchorage, AK 99513, telephone (907) 271-5510, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of BLM Alaska. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by BLM Alaska.
Human remains representing, at minimum, three individuals were removed from two locations on Unalaska Island in the Aleutians West Census Area, AK. The human remains were determined to be more than 200 years old.
Sometime prior to 1961, human remains representing, at minimum, two individuals were removed by an unknown person from the Chernofski site. In 1961, Ron Boyce deposited these human remains at the University of Alaska Museum of the North (University Museum). No known individuals were identified. The 27 associated funerary objects are one bone shaft, 11 pieces of worked bone, two pieces of decorated ivory, one piece of worked wood, one bone drill bearing, seven bone points, one ivory point, one bone handle, and two wooden spoons.
Sometime prior to 1963, human remains representing, at minimum, one individual were removed by an unknown person from the Summer Bay area. In 1963, Ron Kent deposited these human remains at the University Museum. No known individual was identified. No associated funerary objects are present.
The human remains and associated funerary objects in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: archeological and oral traditional.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, BLM Alaska has determined that:
• The human remains described in this notice represent the physical remains of three individuals of Native American ancestry.
• The 27 objects described in this notice are reasonably believed to have been placed with or near individual human remains at the time of death or later as part of the death rite or ceremony.
• There is a relationship of shared group identity that can be reasonably traced between the human remains and associated funerary objects described in this notice and the Qawalangin Tribe of Unalaska.
Written requests for repatriation of the human remains and associated funerary objects in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or
Repatriation of the human remains and associated funerary objects in this notice to a requestor may occur on or after December 23, 2022. If competing requests for repatriation are received, BLM Alaska must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains and associated funerary objects are considered a single request and not competing requests. BLM Alaska is responsible for sending a copy of this notice to the Indian Tribe identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Southern Ute Cultural Center and Museum intends to repatriate certain cultural items that meet the definition of sacred objects and that have a cultural affiliation with the Indian Tribes or Native Hawaiian organizations in this notice.
Repatriation of the cultural items in this notice may occur on or after December 23, 2022.
Tallias Cantsee, Southern Ute Cultural Center and Museum, 503 Ouray Drive, Ignacio, CO 81137, telephone (970) 563-2996, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the Southern Ute Cultural Center and Museum. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the summary or related records held by the Southern Ute Cultural Center and Museum.
The two cultural items were removed from Haudenosaunee territory through sale. Accession number SUM 251 was acquired through purchase by Southern Ute Cultural Center and Museum (SUCCM) Director Helen Hoskins, on January 29th, 1997. SUM 679 was originally a loan from the estate of Father Declan Madden to SUCCM during the directorship of Lynn Brittner. On July 17th, 2012, it was donated to SUCCM. The two sacred items are two Hatuwi (Broken Nose) False Face Masks.
The cultural items in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: historical information available on Haudenosaunee False Face Masks was used as a baseline marker, and tribal expert opinion was utilized through virtual consultations as well as a site visit.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the Southern Ute Cultural Center and Museum has determined that:
• The two cultural items described above are specific ceremonial objects needed by traditional Native American religious leaders for the practice of traditional Native American religions by their present-day adherents.
• There is a relationship of shared group identity that can be reasonably traced between the cultural items and the Cayuga Nation; Oneida Indian Nation (
Additional, written requests for repatriation of the cultural items in this notice must be sent to the Responsible Official identified in
Repatriation of the cultural items in this notice to a requestor may occur on or after December 23, 2022. If competing requests for repatriation are received, the Southern Ute Cultural Center and Museum must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the cultural items are considered a single request and not competing requests. The Southern Ute Cultural Center and Museum is responsible for sending a copy of this notice to the Indian Tribes and Native Hawaiian organizations identified in this notice.
National Park Service, Interior.
Notice.
In accordance with the Native American Graves Protection and Repatriation Act (NAGPRA), the Field Museum of Natural History has completed an inventory of human remains and has determined that there is a cultural affiliation between the human remains and Indian Tribes or Native Hawaiian organizations in this notice. The human remains were removed from Glacier and Pondera Counties, Montana.
Repatriation of the human remains in this notice may occur on or after December 23, 2022.
Helen Robbins, Repatriation Director, Field Museum of Natural History, 1400 S Lake Shore Drive, Chicago, IL 60605-2496, telephone (312) 665-7317, email
This notice is published as part of the National Park Service's administrative responsibilities under NAGPRA. The determinations in this notice are the sole responsibility of the Field Museum. The National Park Service is not responsible for the determinations in this notice. Additional information on the determinations in this notice, including the results of consultation, can be found in the inventory or related records held by the Field Museum.
Human remains representing, at minimum, one individual were removed from Glacier and Pondera Counties, MT. The human remains—a cranium belonging to an adult male—were excavated from the Blackfeet Indian Reservation by George A. Dorsey and accessioned by the Field Museum in 1897. No known individual was identified. No associated funerary objects are present.
The human remains in this notice are connected to one or more identifiable earlier groups, tribes, peoples, or cultures. There is a relationship of shared group identity between the identifiable earlier groups, tribes, peoples, or cultures and one or more Indian Tribes or Native Hawaiian organizations. The following types of information were used to reasonably trace the relationship: geographical and historical.
Pursuant to NAGPRA and its implementing regulations, and after consultation with the appropriate Indian Tribes and Native Hawaiian organizations, the Field Museum has determined that:
• The human remains described in this notice represent the physical remains of one individual of Native American ancestry.
• There is a relationship of shared group identity that can be reasonably traced between the human remains described in this notice and the Blackfeet Tribe of the Blackfeet Indian Reservation of Montana.
Written requests for repatriation of the human remains in this notice must be sent to the Responsible Official identified in
1. Any one or more of the Indian Tribes or Native Hawaiian organizations identified in this notice.
2. Any lineal descendant, Indian Tribe, or Native Hawaiian organization not identified in this notice who shows, by a preponderance of the evidence, that the requestor is a lineal descendant or a culturally affiliated Indian Tribe or Native Hawaiian organization.
Repatriation of the human remains in this notice to a requestor may occur on or after December 23, 2022. If competing requests for repatriation are received, the Field Museum must determine the most appropriate requestor prior to repatriation. Requests for joint repatriation of the human remains are considered a single request and not competing requests. The Field Museum is responsible for sending a copy of this notice to the Indian Tribe identified in this notice.
U.S. International Trade Commission.
Notice.
Notice is hereby given that on November 16, 2022, the presiding administrative law judge (“ALJ”) issued an Initial Determination on Violation of Section 337. The ALJ also issued a Recommended Determination on remedy and bonding should a violation be found in the above-captioned investigation. The Commission is soliciting submissions on public interest issues raised by the recommended relief should the Commission find a violation. This notice is soliciting comments from the public only.
Panyin A. Hughes, Office of the General Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436, telephone (202) 205-3042. Copies of non-confidential documents filed in connection with this investigation may be viewed on the Commission's electronic docket (EDIS) at
Section 337 of the Tariff Act of 1930 provides that, if the Commission finds a violation, it shall exclude the articles concerned from the United States:
19 U.S.C. 1337(d)(1). A similar provision applies to cease and desist orders. 19 U.S.C. 1337(f)(1).
The Commission is soliciting submissions on public interest issues raised by the recommended relief should the Commission find a violation, specifically: a limited exclusion order directed to certain smart thermostats, load control switches, and components thereof imported, sold for importation, and/or sold after importation by respondents Alarm.com Holdings, Inc. of Tysons, Virginia; Alarm.com Inc. of Tysons, Virginia; Ecobee, Inc. of Toronto, Ontario, Canada; EnergyHub, Inc. of Brooklyn, New York; Itron, Inc. of Liberty Lake, Washington; Resideo Smart Homes Technology (Tianjin) of Tianjin, China; and Ademco Inc. of Melville, New York (collectively, “Respondents”); and cease and desist orders directed to Respondents. Parties are to file public interest submissions pursuant to 19 CFR 210.50(a)(4).
The Commission is interested in further development of the record on the public interest in this investigation. Accordingly, members of the public are invited to file submissions of no more than five (5) pages, inclusive of attachments, concerning the public interest in light of the ALJ's Recommended Determination on Remedy and Bonding issued in this
In particular, the Commission is interested in comments that:
(i) explain how the articles potentially subject to the recommended remedial orders are used in the United States;
(ii) identify any public health, safety, or welfare concerns in the United States relating to the recommended orders;
(iii) identify like or directly competitive articles that complainant, its licensees, or third parties make in the United States which could replace the subject articles if they were to be excluded;
(iv) indicate whether complainant, complainant's licensees, and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the recommended orders within a commercially reasonable time; and
(v) explain how the recommended orders would impact consumers in the United States.
Written submissions must be filed no later than by close of business on December 16, 2022.
Persons filing written submissions must file the original document electronically on or before the deadlines stated above. The Commission's paper filing requirements in 19 CFR 210.4(f) are currently waived. 85 FR 15798 (Mar. 19, 2020). Submissions should refer to the investigation number (“Inv. No. 337-TA-1277”) in a prominent place on the cover page and/or the first page. (
Any person desiring to submit a document to the Commission in confidence must request confidential treatment by marking each document with a header indicating that the document contains confidential information. This marking will be deemed to satisfy the request procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b) & 210.5(e)(2)). Documents for which confidential treatment by the Commission is properly sought will be treated accordingly. Any non-party wishing to submit comments containing confidential information must serve those comments on the parties to the investigation pursuant to the applicable Administrative Protective Order. A redacted non-confidential version of the document must also be filed simultaneously with any confidential filing and must be served in accordance with Commission Rule 210.4(f)(7)(ii)(A) (19 CFR 210.4(f)(7)(ii)(A)). All information, including confidential business information and documents for which confidential treatment is properly sought, submitted to the Commission for purposes of this investigation may be disclosed to and used: (i) by the Commission, its employees and Offices, and contract personnel (a) for developing or maintaining the records of this or a related proceeding, or (b) in internal investigations, audits, reviews, and evaluations relating to the programs, personnel, and operations of the Commission including under 5 U.S.C. Appendix 3; or (ii) by U.S. government employees and contract personnel, solely for cybersecurity purposes. All contract personnel will sign appropriate nondisclosure agreements. All nonconfidential written submissions will be available for public inspection on EDIS.
This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of Practice and Procedure (19 CFR part 210).
By order of the Commission.
Bureau of Alcohol, Tobacco, Firearms and Explosives, Department of Justice.
30-Day notice.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Department of Justice (DOJ) will submit the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed collection OMB 1140-0091 (National Response Team Customer Satisfaction Survey) is being published to obtain comments from the public and affected agencies.
Comments are encouraged and will be accepted for an additional 30 days until December 23, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether and, if so, how the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
1.
2.
3.
4.
5.
6.
Notice is hereby given that, on October 17, 2022, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Southwest Dynamic Systems LLC, Albuquerque, NM, has withdrawn as a party to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and NSTIC intends to file additional written notifications disclosing all changes in membership.
On October 8, 2019, NSTIC filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on June 23, 2022. A notice was published in the
Notice is hereby given that, on November 2, 2022, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Pursuant to Section 6(b) of the Act, the identities of the parties to the venture are: Achilles Consulting Group, Mandeville, LA; Advanced Biomimetic Sensors, Inc., Bethesda, MD; Alentic Microscience, Inc., Halifax, CANADA; Alira Health, Framingham, MA; Altec, Inc., Natick, MA; Articulate Labs, Dallas, TX; Asante Bio, Tampa, FL; Aspen Medical USA, Inc., San Antonio, TX; Aspire Clinical Intelligence LLC, Grand Forks, ND; Athena GTX, Inc., Johnston, IA; AuraBlue, Somerville, MA; Avel eCare LLC, Sioux Falls, SD; Axon Medical Technologies, New Cumberland, PA; Biocanic, Inc., San Diego, CA; Bioscience Association of North Dakota, Grand Forks, ND; BiotechPharma Corp., Severna Park, MD; Board of Trustees of the University of Illinois, Champaign, IL; Bodies Done Right, Mayfield Village, OH; Capital Edge Consulting, Inc., McLean, VA; Cedars-Sinai Medical Center, Los Angeles, CA; Center for Innovation Foundation, Grand Forks, ND; Charles River Analytics, Cambridge, MA; Claerosol LLC, Miramar, FL; ComDel Innovation, Wahpeton, ND; DxLab, Inc., Somerville, MA; Edgewood Healthcare, Grand Forks, ND; Elevate Government Solutions, Washington, DC; Elmai Corp., Redmond, WA; EmPowerYu, Inc., Santa Clara, CA; FemtoDx, Beverly Hills, CA; Florida Institute for Human & Machine Cognition, Pensacola, FL; Flosonics Medical, Sudbury, CAN; Gakusisha LTD, Bunkyo-Ku, JPN; Health Care Originals, Rochester, NY; Jana Care, Inc., Boston, MA; Kinsa, Inc., San Francisco, CA; Kismet Technologies, Winter Park, FL; Knight Technical Solutions, Huntsville, AL; LAINE Technologies, Goose Creek, SC; Latham BioPharm Group, Inc., Elkridge, MD; Legacy Medical PLLC, Grand Forks, ND; Luna Labs, Charlottesville, VA; Matregenix, Irvine, CA; MDI Health Technologies, Studio City, CA; MedSafer, Montreal, CAN; Memsel, Inc., Fort Worth, TX; MitoSense, Inc., Great Falls, VA; MMB Healthcare Lincoln Therapeutics, Fargo, ND; Mobile Physician Associates, Beverly Hills, CA; Modulim, Irvine, CA; NeuroMetrix, Inc., Woburn, MA; North Carolina State
Notice is hereby given that, on October 31, 2022, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Guavus, Inc.—a Thales Company, San Jose, CA; and Intel Corp., Santa Clara, CA, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and OGA intends to file additional written notifications disclosing all changes in membership.
On March 31, 2022, OGA filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on August 12, 2022. A notice was published in the
Notice is hereby given that, on October 31, 2022, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and RailPulse intends to file additional written notifications disclosing all changes in membership.
On April 20, 2021, RailPulse filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on August 30, 2022. A notice was published in the
Notice is hereby given that, on October 7, 2022, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, MAK Technologies, Inc., Cambridge, MA; and Southwest Dynamic Systems LLC, Albuquerque, NM, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and NAC intends to file additional written notifications disclosing all changes in membership.
On May 2, 2000, NAC filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on August 8, 2022. A notice was published in the
Notice is hereby given that, on October 11, 2022, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and RISE intends to file additional written notifications disclosing all changes in membership.
On July 2, 2021, RISE filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 26, 2022. A notice was published in the
Notice is hereby given that, on October 27, 2022, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Specifically, the following entities have become members of the Forum: Russell Reynolds Associates, Inc., New York, NY; Fibrasil infraestrutura e fibra otica S.A., São Paulo, BRAZIL; Hoonar Tekwurks Consulting LLP, London, UNITED KINGDOM; Dotlines Pte Ltd., Singapore, SINGAPORE; Digital Nasional Berhad, Kuala Lumpur, MALAYSIA; Telecom Infrastructure North, Ha Noi City, VIETNAM; Shaanxi Fast Gear Co., LTD, Xi'an, PEOPLE'S REPUBLIC OF CHINA; Aussie Broadband Limited, Morwell, AUSTRALIA; Telemovil El Salvador, S,A de C.V., Tuscania, EL SALVADOR; Millicom Tigo Guatemala, Santa Catarina Pinula, GUATEMALA; Telefónica Celular del Paraguay SAE, Asuncion, PARAGUAY; Millicom Cable Costa Rica, S.A., San Jose, COSTA RICA; Telefonía Celular de Nicaragua, S.A., Managua, NICARAGUA; Millicom International Cellular S.A., Luxembourg, LUXEMBOURG; Vitrifi Limited, London, UNITED KINGDOM; Google, Mountain View, CA; Huazhong University of Science and Technology, Wuhan, PEOPLE'S REPUBLIC OF CHINA; University College London School of Management, London, UNITED KINGDOM; Ikue Limited, Bristol, UNITED KINGDOM; Feenix Communications Limited, Auckland, NEW ZEALAND; B-YOND, Frisco, TX; GigaComm Pty Ltd, Southbank, AUSTRALIA; Agnity Communications, Inc., Fremont, CA; Echo5G, Cumming, GA; Sofiène Kamoun, Québec, CANADA; Automatum, Campinas, BRAZIL; LigaData, Palo Alto, CA; Econet Wireless Zimbabwe, Harare, ZIMBABWE.
Also, the following members have changed their names:
INTRASOFT International S.A, NETCOMPANY—INTRASOFT S.A., Luxembourg, LUXEMBOURG; Axiata Digital Labs Pte Ltd, AXIATA DIGITAL LABS (Pvt) Ltd, Colombo, SRI LANKA; GTD Larga Distancia, Grupo GTD, Santiago, CHILE; Reliance Jio Infocomm Ltd, Jio Platforms Limited, Navi Mumbai, INDIA; NOS Technology—Concepção, Construção e Gestão de Redes de Comunicações, S.A., NOS Technology, Porto, PORTUGAL.
In addition, the following parties have withdrawn as parties to this venture: GWDG, Gesellschaft für wissenschaftliche Datenverarbeitung mbH Göttingen, Gottingen, GERMANY; VOCUS PTY LTD, Melbourne, AUSTRALIA; Altiostar, Tewksbury, MA; Apttus Corporation, San Mateo, CA; Beakwise Inc., Ümraniye, TURKEY; Boom Broadband Limited, Liverpool, UNITED KINGDOM; Business International Partners, Montevideo, URUGUAY; C3.ai, Redwood City, CA; Dawiyat, Riyadh, SAUDI ARABIA; DGIT, Prahran, AUSTRALIA; EDX, Eugene, OR; Evolving Systems, Englewood, CO; Gartner, Stamford, CT; Latro Services, Chantilly, VA; MIND C.T.I. LTD, Yoqneam Ilit, ISRAEL; PCCW Global, Wan Chai, HONG KONG-CHINA; Retixa, Warsaw, POLAND; SMART COMMUNICATIONS, INC., Makati City, PHILIPPINES; Statflo Inc., Toronto, CANADA; TAWAL, Riyadh, SAUDI
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and the Forum intends to file additional written notifications disclosing all changes in membership.
On October 21, 1988, the Forum filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on August 1, 2022. A notice was published in the
Notice is hereby given that, on October 6, 2022, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Nevada Nanotech Systems, Sparks, NV, has withdrawn as a party to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and CWMD intends to file additional written notifications disclosing all changes in membership.
On January 31, 2018, CWMD filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on July 6, 2022. A notice was published in the
Notice is hereby given that, on October 26, 2022, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Waters Corporation, Milford, MA; Dante Labs, New York, NY; JSR North America Holdings, Inc., Sunnyvale, CA; Clarivate Analytics, Philadelphia, PA; Procter & Gamble, Mason, OH; Inari, Cambridge, MA; Riffyn Nexus, Oakland, CA; Iktos, Paris, FRANCE; and Rapid Novor, Waterloo, CANADA have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Pistoia Alliance, Inc. intends to file additional written notifications disclosing all changes in membership.
On May 28, 2009, Pistoia Alliance, Inc. filed its original notification pursuant to Section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on August 4, 2022. A notice was published in the
Civil Rights Division, Department of Justice.
60-Day notice.
The Civil Rights Division, Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for sixty days until January 23, 2023.
If you have comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Alberto Ruisanchez, Deputy Special Counsel, USDOJ-CRT-IER, 950 Pennsylvania Avenue NW-4CON, Washington, DC 20530; 202-616-5594.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
1.
2.
3.
4.
5.
6.
Office on Violence Against Women, Department of Justice.
30-Day notice.
The Office on Violence Against Women (OVW), Department of Justice, will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 30 days until December 23, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
1.
2.
3.
Sponsor: Office on Violence Against Women, U.S. Department of Justice.
4.
5.
6.
Bureau of Justice Statistics, Department of Justice.
30-Day notice.
The Bureau of Justice Statistics, Office of Justice Programs, Department of Justice (DOJ), will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995.
Comments are encouraged and will be accepted for 30 days until December 23, 2022.
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact E. Ann Carson, Statistician, Bureau of Justice Statistics, 810 Seventh Street NW, Washington, DC 20531 (email:
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Bureau of Justice Statistics, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Evaluate whether and if so how the quality, utility, and clarity of the information to be collected can be enhanced; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
1.
2.
3.
4.
(a) As of December 31, the number of male and female inmates within their custody and under their jurisdiction with maximum sentences of more than one year, one year or less; and unsentenced inmates;
(b) The number of inmates housed in privately operated facilities, county or other local authority correctional facilities, or in other state or Federal facilities on December 31;
(c) Prison admission information in the calendar year for the following categories: new court commitments, parole violators, other conditional release violators returned, transfers from other jurisdictions, AWOLs and escapees returned, and returns from appeal and bond;
(d) Prison release information in the calendar year for the following categories: expirations of sentence, commutations, other conditional releases, probations, supervised mandatory releases, paroles, other conditional releases, deaths by cause, AWOLs, escapes, transfers to other jurisdictions, and releases to appeal or bond;
(e) Number of inmates under jurisdiction on December 31 by race and Hispanic origin;
(f) Number of inmates under physical custody on December 31 classified as non-citizens; U.S. citizens; and unsentenced inmates;
(g) Number of inmates under physical custody on December 31 who are citizens of the U.S. with maximum sentences of more than one year, one year or less; and unsentenced inmates;
(h) The source of U.S. citizenship data;
(i) Testing of incoming inmates for HIV; and HIV infection and AIDS cases on December 31; and
(j) The aggregated rated, operational, and/or design capacities, by sex, of the state/BOP's correctional facilities at year-end.
For the NPS-1B(T) form, five central reporters from the U.S. Territories and Commonwealths of Guam, Puerto Rico, the Northern Mariana Islands, the Virgin Islands, and American Samoa will be asked to provide information for the following categories for the calendar year just ended, and, if available, for the previous calendar year:
(a) As of December 31, the number of male and female inmates within their custody and under their jurisdiction with maximum sentences of more than one year, one year or less; and unsentenced inmates; and an assessment of the completeness of these counts (complete, partial, or estimated)
(b) The number of inmates under jurisdiction on December 31 but in the custody of facilities operated by other jurisdictions' authorities solely to reduce prison overcrowding;
(c) Number of inmates under jurisdiction on December 31 by race and Hispanic origin;
(d) The aggregated rated, operational, and/or design capacities, by sex, of the
The Bureau of Justice Statistics uses this information in published reports and for the U.S. Congress, Executive Office of the President, practitioners, researchers, students, the media, and others interested in criminal justice statistics.
5.
6.
If additional information is required contact: Robert Houser, Department Clearance Officer, Policy and Planning Staff, Justice Management Division, United States Department of Justice, Two Constitution Square, 145 N Street NE, 3E.206, Washington, DC 20530.
In accordance with section 512(a)(1) of the Employee Retirement Income Security Act of 1974 (ERISA) and the provisions of the Federal Advisory Committee Act and its implementing regulations issued by the General Services Administration (GSA), the charter for the Advisory Council on Employee Welfare and Pension Benefit Plans is renewed.
The Advisory Council on Employee Welfare and Pension Benefit Plans shall advise the Secretary of Labor on technical aspects of the provisions of ERISA and shall provide reports and/or recommendations each year on its findings to the Secretary of Labor. The Council shall be composed of fifteen members appointed by the Secretary. Not more than eight members of the Council shall be of the same political party. Three of the members shall be representatives of employee organizations (at least one of whom shall be a representative of any organization members of which are participants in a multiemployer plan); three of the members shall be representatives of employers (at least one of whom shall be a representative of employers maintaining or contributing to multiemployer plans); three members shall be representatives appointed from the general public (one of whom shall be a person representing those receiving benefits from a pension plan); and there shall be one representative each from the fields of insurance, corporate trust, actuarial counseling, investment counseling, investment management, and accounting.
The Advisory Council will report to the Secretary of Labor. It will function solely as an advisory body and in compliance with the provisions of the Federal Advisory Committee Act, and its charter will be filed under the Act. For further information, contact Christine Donahue, Executive Secretary, Advisory Council on Employee Welfare and Pension Benefit Plans, U.S. Department of Labor, 200 Constitution Avenue NW, Suite N-5700, Washington, DC 20210, telephone (202) 693-8641 or via email to
Signed at Washington, DC.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Mine Safety and Health Administration (MSHA)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before December 23, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) if the information will be processed and used in a timely manner; (3) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (4) ways to enhance the quality, utility and clarity of the information collection; and (5) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Nora Hernandez by telephone at 202-693-8633, or by email at
Under section 305(g) of the Mine Act, all electric equipment located at a coal mine shall be frequently examined, tested, and properly maintained by a qualified person to assure safe operating conditions. The determination of a person as qualified to examine, test, and maintain electric equipment at a coal mine is further defined under the provisions of Title 30 CFR 75.153 and 77.103. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition,
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Notice of availability; request for comments.
The Department of Labor (DOL) is submitting this Bureau of Labor Statistics (BLS)-sponsored information collection request (ICR) to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). Public comments on the ICR are invited.
The OMB will consider all written comments that the agency receives on or before December 23, 2022.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Comments are invited on: (1) whether the collection of information is necessary for the proper performance of the functions of the Department, including whether the information will have practical utility; (2) the accuracy of the agency's estimates of the burden and cost of the collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the burden of the collection of information on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Nicole Bouchet by telephone at 202-693-0213, or by email at
The Consumer Expenditure Surveys are used to gather information on expenditures, income, and other related subjects. These data are used to periodically update the national Consumer Price Index. In addition, the data are used by a variety of researchers in academia, government agencies, and the private sector. The data are collected from a national probability sample of households designed to represent the total civilian non-institutional population. For additional substantive information about this ICR, see the related notice published in the
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless the OMB approves it and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid OMB Control Number.
DOL seeks PRA authorization for this information collection for three (3) years. OMB authorization for an ICR cannot be for more than three (3) years without renewal. The DOL notes that information collection requirements submitted to the OMB for existing ICRs receive a month-to-month extension while they undergo review.
Occupational Safety and Health Administration (OSHA), Labor.
Notice.
In this notice, OSHA announces the application of Eurofins Electrical and Electronic Testing NA, Inc. a/k/a MET Laboratories, Inc., for expansion of the recognition as a Nationally Recognized Testing Laboratory (NRTL) and presents the agency's preliminary finding to grant the application.
Submit comments, information, and documents in response to this notice, or requests for an extension of time to make a submission, on or before December 8, 2022.
Submit comments by any of the following methods:
Information regarding this notice is available from the following sources:
OSHA is providing notice that Eurofins Electrical and Electronic Testing NA, Inc. a/k/a MET Laboratories, Inc. (MET), is applying for expansion of the current recognition as a NRTL. MET requests the addition of two test standards to the NRTL scope of recognition.
OSHA recognition of a NRTL signifies that the organization meets the requirements specified in 29 CFR 1910.7. Recognition is an acknowledgment that the organization can perform independent safety testing and certification of the specific products covered within the scope of recognition. Each NRTL's scope of recognition includes: (1) the type of products the NRTL may test, with each type specified by the applicable test standard; and (2) the recognized site(s) that has/have the technical capability to perform the product-testing and product-certification activities for test standards within the NRTL's scope. Recognition is not a delegation or grant of government authority; however, recognition enables employers to use products approved by the NRTL to meet OSHA standards that require product testing and certification.
The agency processes applications by a NRTL for initial recognition and for an expansion or renewal of this recognition, following requirements in Appendix A to 29 CFR 1910.7. This appendix requires that the agency publish two notices in the
MET currently has one facility (site) recognized by OSHA for product testing and certification, with the headquarters located at: MET Laboratories, Inc., 914 West Patapsco Avenue, Baltimore, Maryland 21230. A complete list of MET's scope of recognition is available at
MET submitted one application, dated September 3, 2021 (OSHA-2006-0028-0092), to expand the recognition to include two additional test standards. OSHA staff performed a detailed analysis of the application packet and reviewed other pertinent information. OSHA did not perform any on-site reviews in relation to this application.
Table 1, below, lists the appropriate test standards found in MET's application for expansion for testing and certification of products under the NRTL Program.
MET submitted an acceptable application for expansion of the scope of recognition. OSHA's review of the application file, and pertinent documentation, indicate that MET has met the requirements prescribed by 29 CFR 1910.7 for expanding the recognition to include the addition of the two test standards for NRTL testing and certification listed in Table 1. This preliminary finding does not constitute an interim or temporary approval of MET's application.
OSHA seeks comment on this preliminary determination.
OSHA welcomes public comment as to whether MET meets the requirements of 29 CFR 1910.7 for expansion of recognition as a NRTL. Comments should consist of pertinent written documents and exhibits.
Commenters needing more time to comment must submit a request in writing, stating the reasons for the request by the due date for comments. OSHA will limit any extension to 10 days unless the requester justifies a longer time period. OSHA may deny a request for an extension if it is not adequately justified.
To review copies of the exhibits identified in this notice, as well as comments submitted to the docket, contact the Docket Office, Occupational Safety and Health Administration, U.S. Department of Labor. These materials also are generally available online at
OSHA staff will review all comments to the docket submitted in a timely manner. After addressing the issues raised by these comments, staff will make a recommendation to the Assistant Secretary of Labor for Occupational Safety and Health on whether to grant MET's application for expansion of the scope of recognition. The Assistant Secretary will make the final decision on granting the application. In making this decision, the Assistant Secretary may undertake other proceedings prescribed in Appendix A to 29 CFR 1910.7.
OSHA will publish a public notice of the final decision in the
James S. Frederick, Deputy Assistant Secretary of Labor for Occupational Safety and Health, authorized the preparation of this notice. Accordingly, the agency is issuing this notice pursuant to 29 U.S.C. 657(g)(2), Secretary of Labor's Order No. 8-2020 (85 FR 58393, Sept. 18, 2020), and 29 CFR 1910.7.
Occupational Safety and Health Administration (OSHA), Labor.
Request for nominations.
OSHA invites interested persons to submit nominations for membership on the Maritime Advisory Committee on Occupational Safety and Health (MACOSH).
Nominations for MACOSH membership must be submitted by January 13, 2023.
You may submit nominations and supporting materials, including attachments, electronically at:
OSHA will post submissions in response to this
The Secretary of Labor (Secretary) invites interested persons to submit nominations for membership on MACOSH.
MACOSH was established by Section 7(d) of the Occupational Safety and Health Act of 1970 (OSH Act) (29 U.S.C. 651, 656) to advise the Secretary of Labor through the Assistant Secretary of Labor for Occupational Safety and Health (Assistant Secretary) in formulating maritime industry standards and regarding matters pertaining to the administration of the OSH Act related to the maritime industry. MACOSH is a non-discretionary advisory committee of indefinite duration (see section 3510 of the National Defense Authorization Act of 2020 (Pub. L. 116-92)).
MACOSH operates in accordance with the Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2), its implementing regulations (41 CFR parts 101-6 and 102-3), and OSHA's regulations on Advisory Committees (29 CFR part 1912). Pursuant to FACA (5 U.S.C. App. 2, 14(b)(2)), the MACOSH charter must be renewed every two years.
The Committee meets approximately two times per year. Committee members serve without compensation, but OSHA provides travel and per diem expenses. Members serve a two-year term, which begins from the date of appointment by the Secretary of Labor. The current MACOSH membership will expire on April 12, 2023.
MACOSH consists of not more than 15 members appointed by the Secretary of Labor. The agency seeks committed members who have a strong interest in the safety and health of workers in the maritime industries. The U.S. Department of Labor is committed to equal opportunity in the workplace. The Secretary of Labor will appoint members to create a broad-based, balanced, and diverse committee reflecting the shipyard, longshoring, and commercial fishing industries, and representing affected interests such as employers, employees, safety and health professional organizations, government organizations with interests or activities related to the maritime industry, academia, and the public.
Nominations of new members, or resubmissions of current or former members, will be accepted in all categories of membership. Interested persons may nominate themselves or submit the name of another person whom they believe to be interested in and qualified to serve on MACOSH. Nominations may also be submitted by organizations from one of the categories listed above (
Any individual or organization may nominate one or more qualified persons for membership on MACOSH. Nominations must include the following information:
(1) The nominee's name, contact information, and current employment or position;
(2) The nominee's resume or curriculum vitae, including prior membership on MACOSH and other relevant organizations and associations;
(3) The maritime industry interest (
(4) A summary of the background, experience, and qualifications that addresses the nominee's suitability for membership; and
(5) A statement that the nominee is aware of the nomination, is willing to regularly attend and participate in MACOSH meetings, and has no conflicts of interest that would preclude membership on MACOSH.
OSHA will conduct a basic background check of candidates before their appointment to MACOSH. The background check will involve accessing publicly available, internet-based sources.
The Secretary of Labor will select MACOSH members based on their experience, knowledge, and competence in the field of occupational safety and health, particularly in the maritime industries. Information received through this nomination process, and other relevant sources of information, will assist the Secretary of Labor in appointing members to MACOSH. In selecting MACOSH members, the Secretary of Labor will consider individuals nominated in response to this
James S. Frederick, Deputy Assistant Secretary of Labor for Occupational Safety and Health, authorized the preparation of this notice pursuant to 29 U.S.C. 653, 655, and 656, FACA, as amended (5 U.S.C. App. 2), the implementing regulations (41 CFR part 102-3), Department of Labor Manual Series Chapter 1-900 (August 31, 2020), OSHA's regulations on Advisory Committees (29 CFR part 1912), and Secretary of Labor's Order No. 8-2020 (85 FR 58393, Sept. 18, 2020).
Millennium Challenge Corporation.
Notice of a new system of records.
The Millennium Challenge Corporation (MCC) proposes to add a new system of records to its inventory of records systems subject to the Privacy Act of 1974, as amended. This action complies with the requirements of the Privacy Act to publish in the
Comments must be received no later than November 30, 2022.
Send written comments to the Millennium Challenge Corporation, ATTN: Christopher Ice, Chief Privacy Officer, Department of Administration and Finance, 1099 Fourteenth Street NW, Suite 700, Washington, DC 20005-3550.
Christopher E. Ice, Chief Privacy Officer, Millennium Challenge Corporation,
MCC is giving notice of a system of records pursuant to the Privacy Act of 1974 (5 U.S.C. 552a) for the MCC Evidence Platform. This platform is used to disseminate the data and documentation produced by MCC-funded data activities. The records information collected is required for researchers to obtain or retain a benefit of accessing MCC-funded data managed and shared through a public-facing platform by University of Michigan's Interagency Consortium for Political and Social Research (ICPSR). To manage access to specific data that must be protected to maintain data respondent confidentiality, ICPSR acts as MCC's data steward. The information collection is used by ICPSR to review and vet data users requesting access to restricted-use data. The information collected includes: (i) Restricted Data Use Agreement (RDUA) signed by both the data user and a representative of their institution; (ii) Documentation of Institutional Review Board (IRB) approval or exemption; (iii) research proposal; (iv) name and contact information of all researchers at the institution who will have access to the data; (v) list of data sets requested and why needed; and (vi) CV/Resume/Biosketch for each user that will access the restricted-use data.
MCC-Evidence Platform. MCC-003.
Unclassified.
Millennium Challenge Corporation—1099 Fourteenth Street NW, Suite 700, Washington, DC 20005-3550
ICPSR—330 Packard Street, Ann Arbor, MI 48104
My H. Le, Director Digital Services, Millennium Challenge Corporation,
22 U.S.C. 7705, Chapter 84—Millennium Challenge.
The system will:
• Store and share de-identified data for public-use—To directly replace the MCC Evaluation Catalog, the platform is the mechanism by which MCC shares data and documentation that is de-identified by MCC contractors, reviewed for clearance by the MCC Disclosure Review Board (DRB), and posted to the new platform.
• Store and share restricted-access data—Given promises of confidentiality and MCC's commitments to protecting the privacy of data activity participants, some data cannot be de-identified in a way that reduces re-identification risk and retains the usability of the data for accountability and learning objectives. In cases where limited data sharing is facilitated by the informed consent process, this data can be prepared for sharing through a restricted-access mechanism which carefully protects access to data for specific statistical analysis. The platform is the mechanism by which MCC shares restricted-access data through an ICPSR-managed Virtual Data Enclave (VDE) following preparation by MCC contractors, review by the MCC DRB, and deposit of the restricted-access data with ICPSR.
• Collects:
(i) Restricted Data Use Agreement (RDUA) signed by both the data user and a representative of their institution;
(ii) Documentation of Institutional Review Board (IRB) approval or exemption;
(iii) Research proposal;
(iv) Name and contact information of all researchers at the institution who will have access to the data;
(v) List of data sets requested and why needed; and
(vi) CV/Resume/Biosketch—defining the qualifications the individual has to lead statistical analysis of the proposed research analysis.
• US Congress, staffers, and general public;
• Country partners; and
• Academic researchers, faculty, and students.
(i) Restricted Data Use Agreement (RDUA) signed by both the data user and a representative of their institution; (ii) Documentation of Institutional Review Board (IRB) approval or exemption; (iii) research proposal; (iv) name and contact information of all researchers at the institution who will have access to the data; (v) list of data sets requested and why needed; and (vi) CV/Resume/Biosketch—defining the qualifications the individual has to lead statistical analysis of the proposed research analysis.
From the individual.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information contained in this system may be disclosed to authorized entities, as determined to be relevant and necessary, outside MCC as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
• Audits and oversight;
• Congressional inquiries;
• For investigations of potential violations of law;
• With the National Archives and Records Administration (NARA) for records management purposes; and
• For data breach and mitigation response.
This system is electronically stored on a central computer database, hosted by ICPSR.
Records are retrievable by personal name, organizational affiliation name, or a combination of search functions.
MCC retains records in accordance with the National Archives and Records Administration (NARA), General Records Schedule (GRS).
MCC safeguards the information in accordance with applicable laws, rules, and policies, including the Federal Information Security Modernization Act of 2014; OMB Circular A-130, Management of Federal Resources; and MCC policies and procedures. MCC protects records from unauthorized access through appropriate administrative, physical, and technical safeguards. These safeguards include restricting access to authorized personnel who have need-to-know, and the process of authentication using user identifications (IDs) and passwords that function as an identity and authentication method of access. Personnel with authorized access to the system have received training in the proper handling of Privacy Act information and in information security requirements for both paper copies and electronically stored information.
Individuals seeking knowledge of the system's records must submit a written request to the MCC Privacy Officer, at the above mailing address, clearly marked as “Privacy Act Request” on the envelope and letter. The request must include the requestor's full name, current address, the name or number of the system to be searched, and if possible, the record identification number. The request must be signed by either notarized signature or by signature under penalty of perjury under 28 U.S.C. 1746.
Same as the Records Access Procedure above; the request should also clearly and concisely describe the information contested, the reasons for contesting it, and the proposed amendment sought, pursuant to 45 CFR 5b.7.
Same as Records Access Procedures.
None.
None.
National Aeronautics and Space Administration.
Notice of intent to grant exclusive, co-exclusive or partially exclusive patent license.
NASA hereby gives notice of its intent to grant an exclusive, co-exclusive or partially exclusive patent license to practice the inventions described and claimed in the patents and/or patent applications listed in
The prospective exclusive, co-exclusive or partially exclusive license may be granted unless NASA receives written objections including evidence and argument, no later than December 8, 2022 that establish that the grant of the license would not be consistent with the requirements regarding the licensing of Federally owned inventions as set forth in the Bayh-Dole Act and implementing regulations. Competing applications completed and received by NASA no later than December 8, 2022 will also be treated as objections to the grant of the contemplated exclusive, co-exclusive or partially exclusive license. Objections submitted in response to this notice will not be made available to the public for inspection and, to the extent permitted by law, will not be released under the Freedom of Information Act.
NASA intends to grant an exclusive, co-exclusive, or partially exclusive patent license in the United States to practice the inventions described and claimed in U.S. Patent Application Serial No.17/451,643, entitled “Large Format Fractional Thermal Runaway Calorimeter (L-FTRC)” to KULR Technology Group, Inc., having its principal place of business in San Diego, California. The fields of use may be limited. NASA has not yet made a final determination to grant the requested license and may deny the requested license even if no objections
This notice of intent to grant an exclusive, co-exclusive or partially exclusive patent license is issued in accordance with 35 U.S.C. 209(e) and 37 CFR 404.7(a)(1)(i). The patent rights in these inventions have been assigned to the United States of America as represented by the Administrator of the National Aeronautics and Space Administration. The prospective license will comply with the requirements of 35 U.S.C. 209 and 37 CFR 404.7.
Information about other NASA inventions available for licensing can be found online at
National Credit Union Administration (NCUA).
Notice and request for comment.
The National Credit Union Administration (NCUA), as part of a continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on the following extensions of a currently approved collection, as required by the Paperwork Reduction Act of 1995.
Written comments should be received on or before January 23, 2023 to be assured consideration.
Interested persons are invited to submit written comments on the information collection to Dawn Wolfgang, National Credit Union Administration, 1775 Duke Street, Suite 6032, Alexandria, Virginia 22314; email at
Address requests for additional information to Dawn Wolfgang at the address above or telephone 703-548-2279.
By Melane Conyers-Ausbrooks, Secretary of the Board, the National Credit Union Administration, on November 17, 2022.
In accordance with the Federal Advisory Committee Act (Pub. L. 92-463, as amended), the National Science Foundation (NSF) announces the following meeting:
December 15, 2022; 1 p.m.-5 p.m. (eastern).
December 16, 2022; 12 p.m.-4 p.m. (eastern).
National Science Foundation (NSF).
Notice and request for comments.
The National Science Foundation (NSF) is announcing plans to establish this information collection request. In accordance with the Paperwork Reduction Act of 1995, and as part of its continuing effort to reduce paperwork and respondent burden, NSF is providing an opportunity for public comment on this proposed information collection request. After obtaining and considering public comment, NSF will prepare the submission requesting Office of Management and Budget (OMB) clearance of this collection.
Written comments on this notice must be received by January 23, 2023, for consideration. Comments received after that date will be considered to the extent practicable. Please send comments to the address below.
Suzanne H. Plimpton, Reports Clearance Officer, National Science Foundation, 2415 Eisenhower Avenue, Suite W18200, Alexandria, Virginia 22314; telephone (703) 292-7556; or send email to
More specifically, the INCLUDES initiative seeks to improve collaborative efforts for systemic change in STEM education and professions for groups that have been historically underrepresented in STEM fields. The historically underrepresented groups include African Americans/Blacks,
Significant advancement in the inclusion of underrepresented groups in STEM education and professions is expected to occur through collaboration among a diverse group of institutions that support the pathways of STEM students and professionals. This type of collaboration requires a strong infrastructure to facilitate the work and enable progress toward goals. INCLUDES has established five design elements of collaborative infrastructure that are essential to funded projects: (1) shared vision; (2) partnerships; (3) goals and metrics; (4) leadership and communication; and (5) expansion, sustainability, and scale. The Shared Measures framework for the INCLUDES initiative provides a common structure for documenting funded projects' individual and collective progress toward implementing the design elements of collaborative infrastructure, and implementing systemic approaches to solving broadening participation challenges in STEM.
NSF is requesting OMB approval to collect data for the evaluation of the INCLUDES initiative. The data will be used to:
1. Evaluate the initiative's effectiveness in broadening the participation of historically underrepresented groups in STEM education and the STEM workforce.
2. Assess the maturity of Alliances in building collaborative infrastructure and the degree to which their maturity contributes to progress toward broadening participation outcomes.
3. Document the expansion, sustainability, and scale of the relationships and networks established by the initiative.
4. Examine the degree to which leadership, actions, activities, and structures are inclusive of historically underrepresented groups.
The proposed information collection will use self-completed surveys, interviews, and focus groups to obtain data essential to the evaluation. Data will be collected using:
• A national survey of representatives of the different project types funded by the INCLUDES initiative, including Alliances (the largest funded project type investment), Planning Grants, Design and Development Launch Pilots (DDLPP), Collaborative Change Consortia, Network Connectors, Conferences, and Alliance partners. Specifically, this survey will ask about the demographics of project leads, the engagement of organizations focus on serving underserved communities, the presence of the five elements of collaborative infrastructure, and the impact of the Coordination Hub. Survey data will allow the evaluation to corroborate the information with multiple representatives from each of the above types of projects and with focus group findings. The survey questionnaire will contain mostly close-ended response options with a few open-ended options. Survey findings will inform (1) the determination of the maturity of the Alliances and correlations between their maturity and broadening participation outcomes, (2) the implementation of inclusive and equity-centered practices, and (3) the assessment of the expansion, sustainability, and scale of partnerships and networks.
• Focus groups with Alliance leads and program/project beneficiaries (
• Interviews with Coordination Hub staff to learn more about implementation outcomes. These findings will corroborate the information collected about the impact of the Hub through the survey and focus groups.
The amount of time to participate in the interviews will be approximately 60 minutes. NSF estimates the average annual burden for the evaluation will be no more than 6 hours (almost one day) per [24 individuals × 100% response × 60 minutes]/4 years).
The amount of time to participate in the focus groups will be approximately 60 minutes. NSF estimates the average annual burden for the evaluation will be no more than 231 hours (about 4 weeks) per year ([1,234 individuals × 75% response × 60 minutes]/4 years).
Please submit one copy of your comments by only one method. All submissions received must include the agency name and collection name identified above for this information collection. Commenters are strongly encouraged to transmit their comments electronically via email. Comments, including any personal information provided become a matter of public record. They will be summarized and/or included in the request for Office of Management and Budget approval of the information collection request.
Fincham, J. (2008). Response rates and responsiveness for surveys, standards, and the Journal.
Hendra, R. & Hill, A. (2019). Rethinking response rates: New evidence of little relationship between survey response rates and nonresponse bias.
Kelley, K., Clark, B., Brown, V., & Sitzia, J. (2003). Good practice in the conduct and reporting of survey research.
Nuclear Regulatory Commission.
Notice of submission to the Office of Management and Budget; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for renewal of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, “NRC Forms 540 and 540A, Uniform Low-Level Radioactive Waste Manifest (Shipping Paper) and Continuation Page.”
Submit comments by December 23, 2022. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
David C. Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2021-0043 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
•
Written comments and recommendations for the proposed information collection should be sent
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, “NRC Forms 540 and 540A, Uniform Low-Level Radioactive Waste Manifest (Shipping Paper) and Continuation Page.” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The NRC published a
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Renewal of existing information collection; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on the renewal of Office of Management and Budget (OMB) approval for an existing collection of information. The information collection is entitled, “NRC Form 327, Special Nuclear Material (SNM) and Source Material (SM) Physical Inventory Summary Report, and NUREG/BR-0096, Instructions and Guidance for Completing Physical Inventory Summary Reports.”
Submit comments by January 23, 2023. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal rulemaking website:
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David C. Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2022-0088 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
•
The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility? Please explain your answer.
2. Is the estimate of the burden of the information collection accurate? Please explain your answer.
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice of submission to the Office of Management and Budget; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for renewal of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, “NRC Forms 541 and 541A, Uniform Low-Level Radioactive Waste Manifest Container and Waste Description and Continuation Page.”
Submit comments by December 23, 2022. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
David C. Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2021-0044 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
•
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, “NRC Forms 541 and 541A, Uniform Low-Level Radioactive Waste Manifest Container and Waste Description and Continuation Page.” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The NRC published a
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Proposed information collection; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) invites public comment on this proposed information collection. The information collection is entitled, “Regulatory Issue Summary 2009-06, Revision 1, Importance of Giving the NRC Advance Notice of Intent to Pursue License Renewal.”
Submit comments by January 23, 2023. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
You may submit comments by any of the following methods; however, the NRC encourages electronic comment submission through the Federal rulemaking website:
•
•
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David C. Cullison, Office of the Chief Information Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2022-0051 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
•
The NRC encourages electronic comment submission through the Federal rulemaking website (
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC is requesting public comment on its intention to request the OMB's approval for the information collection summarized below.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
The NRC is seeking comments that address the following questions:
1. Is the proposed collection of information necessary for the NRC to properly perform its functions? Does the information have practical utility? Please explain your answer.
2. Is the estimate of the burden of the information collection accurate? Please explain your answer.
3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?
4. How can the burden of the information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice of submission to the Office of Management and Budget; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for renewal of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, “NRC Form 313, “Application for Materials License” and NRC Forms 313A (RSO), 313A (AMP), 313A (ANP), 313A (AUD), 313A (AUT), and 313A (AUS).”
Submit comments by December 23, 2022. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
David C. Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2022-0107 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
•
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, “NRC Form 313, “Application for Materials License” and NRC Forms 313A (RSO), 313A (AMP), 313A (ANP), 313A (AUD), 313A (AUT), and 313A (AUS).” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The NRC published a
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
The documents identified in the following table are available to interested persons through ADAMS.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Notice of submission to the Office of Management and Budget; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) has recently submitted a request for renewal of an existing collection of information to the Office of Management and Budget (OMB) for review. The information collection is entitled, “NRC Forms 542 and 542A, Uniform Low-Level Radioactive Waste Manifest Index and Regional Compact Tabulation and Continuation Page.”
Submit comments by December 23, 2022. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received on or before this date.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
David C. Cullison, NRC Clearance Officer, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2084; email:
Please refer to Docket ID NRC-2021-0045 when contacting the NRC about the availability of information for this action. You may obtain publicly available information related to this action by any of the following methods:
•
•
•
•
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
The NRC cautions you not to include identifying or contact information in comment submissions that you do not want to be publicly disclosed in your comment submission. All comment submissions are posted at
If you are requesting or aggregating comments from other persons for submission to the OMB, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that comment submissions are not routinely edited to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
Under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the NRC recently submitted a request for renewal of an existing collection of information to OMB for review entitled, “NRC Forms 542 and 542A, Uniform Low-Level Radioactive Waste Manifest Index and Regional Compact Tabulation and Continuation Page.” The NRC hereby informs potential respondents that an agency may not conduct or sponsor, and that a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.
The NRC published a
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
For the Nuclear Regulatory Commission.
Office of Personnel Management.
60-Day notice and request for comments.
The Office of Personnel Management (OPM) offers the opportunity to comment on a new information collection request (ICR) titled Personnel Vetting Questionnaire (PVQ). The proposed information collection will streamline multiple existing information collections, as well as the renewal cycle for them, commensurate with on-going efforts to improve personnel vetting processes and the experience of individuals undergoing personnel vetting. OPM is proposing to discontinue the information collections for OMB control numbers 3206-0261, 3206-0258, and 3206-0005 as these information collections will become parts of the new Personnel Vetting Questionnaire information collection and assigned a new OMB control number.
Comments are encouraged and will be accepted until January 23, 2023.
You may submit comments, identified by docket number and/or Regulatory Information Number (RIN) and title, by the following method:
All submissions received must include the agency name and docket number or RIN for this document. The general policy for comments and other submissions from members of the public is to make these submissions available for public viewing at
A copy of this ICR, with applicable supporting documentation, may be obtained by email to
As required by the Paperwork Reduction Act of 1995 (Pub. L. 104-13, 44 U.S.C. chapter 35) as amended by the Clinger-Cohen Act (Pub. L. 104-106), OPM is soliciting comments for this collection (OMB No. 3206-XXXX). OPM is particularly interested in comments that:
1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of the agency, including whether the information will have practical utility;
2. Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
3. Enhance the quality, utility, and clarity of the information to be collected; and
4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The PVQ will be a common form and will consolidate the following ICRs:
As appropriate to the risk and sensitivity of an individual's position, questions contained within the proposed personnel vetting questionnaire will be used by the U.S. Government in conducting personnel vetting investigations for persons under consideration for, or retention in, low risk, public trust, and/or national security positions as defined in 5 CFR 731 and 5 CFR 1400, including individuals requiring eligibility for access to classified information under Executive Order 12968, as amended.
This questionnaire will also be used for making trust determinations associated with an individual's initial and ongoing suitability or fitness for Federal employment, fitness for contract employment, eligibility to hold a sensitive position or for access to classified information, or eligibility for physical and logical access to federally controlled facilities or information systems.
OPM serves as the sponsor for the common form PVQ, collecting comments as well as posting the information collection; however, OPM works closely with the Office of the Director of National Intelligence (ODNI), National Counterintelligence and Security Center to develop and propose content, since the information collected is used for background investigations that are under the purview of OPM as the Suitability and Credentialing Executive Agent and ODNI as the Security Executive Agent, pursuant to Executive Order 13467, as amended. The information collection is used for background investigations conducted by the Defense Counterintelligence and Security Agency (DCSA), the Government's primary background investigations provider and other authorized investigating agencies. The information is used by federal agencies in making trust determinations as described above.
OPM is requesting clearance of the comprehensive personnel vetting questionnaire that contains all of the potential questions that could be asked of individuals undergoing personnel vetting investigations; however, the respondent completing the form will only be asked to complete the questions required for their position risk and designation. The higher the risk and sensitivity of the position, the greater the information collection. Part A of the PVQ contains a set of core required questions that will be required of all individuals undergoing a background investigation. Part B contains additional questions that will be required of individuals in non-sensitive public trust positions as well as individuals in sensitive positions, and Part C contains further questions that will be required only of individuals in sensitive positions.
Currently, there are multiple standard form questionnaires for personnel vetting investigations:
• The SF 85, Questionnaire for Non-Sensitive Positions, completed by individuals in non-sensitive low risk positions. This will be replaced by Part A of the PVQ.
• The SF 85P, Questionnaire for Public Trust Positions, completed by individuals in non-sensitive moderate risk and high-risk positions. The SF 85P will be replaced by Parts A and B of the PVQ.
• The SF 86, Questionnaire for National Security Positions, completed by individuals in national security positions, as the term is defined at 5 CFR part 1400, including individuals requiring eligibility for access to classified information under E.O. 12968. The SF 86 will be replaced by Parts A, B, and C of the PVQ.
• Individuals in certain law enforcement positions may also complete the supplemental form SF 85P-S, Supplemental Questionnaire for Selected Positions. The SF 85P-S will be replaced by Part D of the PVQ.
Questions within the PVQ will be presented to individuals in the electronic application system of the Defense Counterintelligence and Security Agency (DCSA) that is the successor to the Electronic Questionnaires for Investigations Processing (e-QIP) system. As in e-QIP today, the questions will branch to collect additional details as appropriate to the individual's response. For example, if a respondent responds affirmatively to a question regarding foreign travel, the question will expand to ask for the country, dates of travel, and other details. In this sense, the information collection is tailored to the individual's personal history and the burden on the individual will vary depending on the extent to which each individual has relevant information to provide.
For further clarity, below is a comparison, by position designation, of the current forms required and the parts of the PVQ that will be required to be completed.
Part A contains questions covering the following areas:
Part B contains the following additional areas:
Part C contains the following additional areas:
Part D contains the following areas:
Streamlining the multiple existing information collections into parts that build upon one another according to the risk and sensitivity of the position will allow for greater efficiency in vetting processes and reduce the burden on individuals who move to positions of greater risk or sensitivity. The PVQ will introduce the ability to collect the additional part(s) needed for the position rather than requiring the individual to start from scratch with a different investigative questionnaire. This practice will align with the streamlined personnel vetting investigative requirements for transfer of trust and upgrades as issued by OPM and ODNI under the Trusted Workforce 2.0 transformation of personnel vetting. In addition to enhancing the experience of individuals undergoing personnel vetting and providing efficiencies for federal agencies' personnel vetting processes, the PVQ will consolidate the renewal cycle and process for the personnel vetting information collections, thereby reducing the level of effort and resources required for managing multiple renewal cycles.
In comparison to the content of the current investigative questionnaires, the content of each part of the PVQ uses more plain language to collect information from the respondents and provides additional explanations to the respondents regarding the reasons for the questions. To the extent practicable, the framing of more complex questions has been simplified and avoids “double- barreled” questions. While some questions in Part A have been expanded to cover a greater scope of time, the overall effect of streamlining the collection into parts that build upon each other in support of the Trusted Workforce investigative standards is a general reduction in the scope of time covered by the questions.
Other differences between the PVQ and the current investigative questionnaires are provided as follows:
Sex and Gender. Unlike the current investigative questionnaires, the PVQ does not require the respondent to indicate “Male” or “Female.” Data collection on sex has traditionally been used to assist in identity matching for a small number of data checks in the investigative process. However, over time, the utility of this information for data matching has been reduced by changes at the state and municipality level. At present, approximately 45 states allow an individual to amend their birth certificate to match their gender. A subset of 15 states allows an individual to choose a non-binary option. The process to change these records varies from self-certification to requiring court orders, depending on the jurisdiction. Similarly, states and municipalities vary on how they code certain records checked in investigations. Given the variables in data fields used by various records providers and the possibility that an individual's self-identified sex may differ than what was previously provided (such as at the time of a past arrest), the effectiveness of using an individual's self-identified sex as a tool for identity verification/validation has decreased. While additional fields could be added to the questionnaire, workarounds would be required to accomplish data matching due to the way vital records and criminal history repositories maintain the information and because an individual's self- identification may change over time. Ultimately, OPM and ODNI concluded that asking the respondent to indicate “Male” or “Female” no longer has utility in the investigative process to justify the burden of requiring it from respondents.
The PVQ uses gender inclusive terminology, such as parent and sibling, rather than terms that are not gender inclusive, such as mother, father, sister, brother. OPM and ODNI considered whether changes to use gender inclusive terminology would have any adverse consequences for effective background investigation and adjudication processing. OPM and ODNI concluded that changing terminology on the forms to be gender inclusive would not adversely affect personnel vetting processes.
The PVQ retains the requirement to provide “Other Names Used” as OPM and ODNI considered the necessity of this collection and determined that this collection is necessary for properly conducting background investigations of individuals. Recognizing that this collection is particularly sensitive for transgender and gender non-conforming and non-binary employees and applicants, the PVQ includes new instruction language designed to help mitigate privacy concerns by clarifying how the collected information will be used during the personnel vetting process.
These aspects of the PVQ are consistent with Administration priorities. On June 15, 2021, President Biden issued Executive Order (E.O.) 14035, on
E.O. 14035 directed that the Director of National Intelligence, in consultation with the Director of OPM and the heads of agencies, “take steps to mitigate any barriers in security clearance and background investigation processes for LGBTQ+ employees and applicants, in particular transgender and gender non-conforming and non-binary employees and applicants.” Taken together with the NSM-3 direction to assess additional reforms to eliminate bias within personnel vetting processes, OPM and ODNI have embarked upon initiatives to improve federal personnel vetting processes in support of DEIA in the federal workforce.
Selective Service. Questions regarding Selective Service registration are no longer included as employing agencies collect necessary information regarding Selective Service registration earlier in the process using the Declaration for Federal Employment (OF 306). Confirmation of registration is available to agencies as a service during the hiring and staffing process and is no longer automatically included as part of the personnel vetting background investigation.
Handling Protected Information. The PVQ includes questions not included in the existing investigative questionnaires that inquire as to whether the respondent has deliberately violated rules or regulations for safeguarding protected information. In addition, questions regarding use of information technology systems that were previously asked of public trust positions and national security positions are now presented to all respondents in Part A. These questions are appropriate for all respondents as they are relevant to inform decisions regarding eligibility to be issued a federal personal identity credential permitting access to federal facilities and information systems. OPM's July 31, 2008,
Illegal Use of Drugs and Drug Activity. Questions regarding illegal drug use on the PVQ are divided into separate areas to distinguish between use of marijuana or cannabis derivatives containing THC and use of other illegal drugs or controlled substances, in recognition of changing societal norms. In addition, the PVQ has a more limited scope of questioning regarding past use of marijuana in comparison to other illegal drugs. Currently, use of marijuana by federal employees is prohibited, while past use of marijuana by applicants is evaluated on a case-by-case basis when agencies make trust determinations. Given the legal landscape at the state level regarding use of marijuana, distinguishing between past marijuana use and use of other illegal drugs on the PVQ may improve the pool of applicants for federal employee and federal contractor positions.
Association Record. OPM and ODNI conducted a careful review of the questions regarding association record on the existing investigative questionnaires. The PVQ contains some new questions as well as some updated questions that have been modified to reduce complexity and further compel candid responses. As with all aspects of PVQ, the information collection serves to inform investigations that are the basis for personnel vetting determinations, consistent with OPM's guidance for credentialing, suitability, and fitness determinations and ODNI's guidance for national security positions, as applicable.
The Association Record aspects of the PVQ are also consistent with Administration priorities. On his first full day in office, President Biden directed his national security team to lead a 100-day comprehensive review of U.S. Government efforts to address domestic terrorism. As part of that review, interagency experts identified the possibility that domestic terrorists could attempt to exploit or abuse authoritative positions or sensitive access and recommended potential modifications for consideration as part of the periodic update of the SF 85, 85P and 86.
As noted in the Administration's June 2021 National Strategy for Countering Domestic Terrorism, “Pre-employment background checks and re-investigations for government employees are a critical screening process that must account for all possible terrorist threats.” Strategic Goal 3.3 of the Strategy, “Ensure that screening and vetting processes consider the full range of terrorism threats” recommended augmenting personnel vetting screening processes by considering changes to the investigative questionnaires, as recommended by the interagency experts. The objectives of the changes are to ensure new applicants and employees undergoing vetting abide by legal obligations, including in providing candid and forthright representations and to prevent individuals who pose domestic terrorism threats from being placed in positions of trust.
Psychological and Emotional Health. Questions regarding psychological and emotional health are presented only in Parts C and D of the PVQ, consistent with the existing questioning in this area that is limited to the Questionnaire for National Security Positions (SF 86) and the Supplemental Questionnaire for Selected Positions (SF 85P-S).
The language in the current SF 86 has been in place since 2016 and was the outcome of a protracted effort to shift the focus away from questions about seeking mental health treatment while allowing for the collection of information regarding potentially serious or uncontrolled conditions that could substantially affect judgment or reliability. While the intent this area of questioning has always been to surface any concerns regarding the individual's judgment or reliability, the approach has shifted from asking about all mental health treatment or counseling to a more tailored set of questions regarding hospitalization and specific diagnoses. The PVQ seeks to further reduce perceived stigma associated with seeking mental health treatment or counseling by further limiting the scope of questioning.
ODNI, as the Security Executive Agent, convened a working group through the ODNI National Security Psychology Leadership Council (NSPLC) consisting of clinical and research psychologists with subject matter expertise in personnel security, to examine the utility of the psychological and emotional health questions on the SF 86. The NSPLC provided recommendations to improve the efficacy of the questions while targeting issues of concern for national security, addressing perceived stigma, and protecting privacy.
The resulting questioning in the PVQ focuses on serious mental health illnesses that have very low base rates in the general population. Respondents receiving treatment or counseling for the most common mental health issues, such as depression and anxiety, as well as those seeking treatment or counseling after experiencing trauma or other stressful events, are unlikely to answer affirmatively to any of the items in the PVQ. By focusing on the most serious mental health illness, the PVQ will assist in enabling security professionals to screen for significant psychological and emotional health concerns with the intent to decrease the risk from insiders with significant mental illness, including risk of violence at federal installations.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange is filing a proposal to amend the MIAX Pearl Options Fee Schedule (the “Fee Schedule”) to amend its monthly Trading Permit
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend the Fee Schedule to amend the amount and calculation of the monthly Trading Permit fees for Market Makers. Currently, the Exchange assesses Trading Permit fees based upon the monthly total volume executed by the Member
The Exchange now proposes to amend the calculation and amount of Trading Permit fees for Market Makers by moving away from the above-described volume tier-based fee structure to harmonize the Trading Permit fee structure for Market Makers with that of the Exchange's affiliates, Miami International Securities Exchange, LLC (“MIAX”) and MIAX Emerald, LLC (“MIAX Emerald”).
The Exchange proposes that the amount of the monthly Trading Permit fees for Market Makers would be based on the lesser of either the per class traded or percentage of total national average daily volume (“ADV”) measurement based on classes traded by volume. The amount of monthly Market Maker Trading Permit fee would be based upon the number of classes in which the Market Maker was registered to quote on any given day within the calendar month, or upon the class volume percentages.
Specifically, the Exchange proposes to adopt the following Trading Permit fees for Market Makers: (i) $3,000 for Market Maker registrations in up to 10 option classes or up to 20% of option classes by national ADV; (ii) $5,000 for Market Maker registrations in up to 40 option classes or up to 35% of option classes by ADV; (iii) $7,000 for Market Maker registrations in up to 100 option classes or up to 50% of option classes by ADV; and (iv) $9,000 for Market Maker registrations in over 100 option classes or over 50% of option classes by ADV up to all option classes listed on MIAX Pearl. For example, if Market Maker 1 elects to quote the top 40 option classes which consist of 58% of the total national average daily volume in the prior calendar quarter, the Exchange would assess $5,000 to Market Maker 1 for the month which is the lesser of `up to 40 classes' and `over 50% of classes by volume up to all classes listed on MIAX Pearl'. If Market Maker 2 elects to quote the bottom 1000 option classes which consist of 10% of the total national average daily volume in the prior quarter, the Exchange would assess $3,000 to Market Maker 2 for the month which is the lesser of `over 100 classes' and `up to 20% of classes by volume.' The Exchange notes that the proposed tiers (ranging from $3,000 to $9,000) are lower than the tiers recently approved by the Commission in BOX's filing to adopt market maker trading permit fees (ranging from $4,000 to $10,000) for similar per class tier thresholds.
With the proposed changes, a Market Maker would be determined to be registered in a class if that Market Maker has been registered in one or more series in that class.
The Exchange also proposes to adopt an alternative lower Trading Permit fee for Market Makers who fall within the 2nd, 3rd and 4th levels of the Market Maker Trading Permit fee table: (i) Market Maker registrations in up to 40 option classes or up to 35% of option classes by volume; (ii) Market Maker registrations in up to 100 option classes or up to 50% of option classes by volume; and (iii) Market Maker registrations in over 100 option classes or over 50% of option classes by volume up to all option classes listed on MIAX Pearl. In particular, the Exchange proposes to adopt footnote “**” following the Market Maker Trading Permit fee table for these Monthly Trading Permit tier levels. New proposed footnote “**” will provide that if the Market Maker's total monthly executed volume during the relevant month is less than 0.040% of the total monthly TCV for MIAX Pearl-listed option classes for that month, then the fee will be $3,500 instead of the fee otherwise applicable to such level.
The purpose of the alternative lower fee designated in proposed footnote “**” is to provide a lower fixed cost to those Market Makers who are willing to quote the entire Exchange market (or substantial amount of the Exchange market), as objectively measured by either number of classes assigned or national ADV, but who do not otherwise execute a significant amount of volume on the Exchange. The Exchange believes that, by offering lower fixed costs to Market Makers that execute less volume, the Exchange will retain and attract smaller-scale Market Makers, which are an integral component of the option marketplace, but have been decreasing in number in recent years, due to industry consolidation and lower market maker profitability. Since these smaller-scale Market Makers utilize less Exchange capacity due to lower overall volume executed, the Exchange believes it is reasonable and equitable to offer such Market Makers a lower fixed cost. The Exchange notes that the Exchange's affiliates, MIAX and MIAX Emerald, also provide lower Trading Permit fees for Market Makers who quote the entire MIAX and MIAX Emerald markets (or substantial amount of those markets), as objectively measured by either number of classes assigned or national ADV, but who do not otherwise execute a significant amount of volume on MIAX or MIAX Emerald.
As illustrated by the table below, the Exchange notes that the proposed Trading Permit fees for Market Makers are in line with, or cheaper than, the similar trading permit fees and membership fees charged by other options exchanges. The Exchange believes other exchanges' membership and trading permit fees are useful examples of alternative approaches to providing and charging for membership and provides the table for comparison purposes only to show how the Exchange's proposed fees compare to fees currently charged by other options exchanges for similar membership and trading permits.
The Exchange also proposes to amend the first table of Trading Permit fees in Section 3)b) of the Fee Schedule to provide additional clarity. The Exchange has two categories of Members, Market Makers and Electronic Exchange Members
The Exchange notes that it previously filed similar proposals to amend the amount and calculation of Trading Permit fees for Market Makers, which filings contained other changes to the Exchange's Trading Permit fees for EEMs. The Exchange has withdrawn those filings and replaced them with the current filing.
The proposed rule change is immediately effective.
The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, in general, and Section 6(b)(4) and 6(b)(5) of the Act,
The Exchange commenced operations in February 2017
Later in 2018, as the Exchange's market share increased,
The Exchange recently reviewed its current Trading Permit fees. In its review, the Exchange determined that the calculation and amount of Trading Permit fees would need to be amended, and volume tier-based Trading Permit fees for all Member types is no longer appropriate. Specifically, the Exchange found that Market Makers were benefitting from lower Trading Permit fees while (1) consuming the most bandwidth and resources of the network; (2) transacting the vast majority of the volume on the Exchange; and (3) requiring the high touch network support services provided by the Exchange and its staff. The Exchange notes that Broker Dealers, Professional Customers, and Priority Customers
The Exchange notes that while Market Makers continue to account for a vast majority of the increased costs and resources placed on the Exchange and its systems (as discussed herein), Market Makers continue to be valuable market participants on the exchanges as the options market is a quote driven industry. The Exchange recognizes the value that Market Makers bring to the Exchange. In fact, the Exchange provides Market Makers transactional volume-based discounts and rebates to incentivize Market Makers to direct order flow to the Exchange to obtain the benefit of the rebate, which will in turn benefit all market participants by increasing liquidity on the Exchange.
In its review of Trading Permit fees, the Exchange found that since 2018, Market Makers were paying nearly the same Trading Permit fees as EEMs that used the MEO Interface despite Market Makers consuming the most resources on the Exchange's system and contributing to increased costs for the Exchange. As such, the Exchange proposes to establish higher, separate electronic Trading Permit fees for Market Makers that are more aligned with the costs and resources that Market Makers continue to place on the Exchange and its systems and will align the Trading Permit fees with those of the majority of other options exchanges at similar or lower rates.
Additionally, the Exchange believes that the proposed change will better align the Exchange's Trading Permit fees with rates charged by its affiliates and competing options exchanges in the industry for similar Trading Permits for such market participants. As such, the Exchange believes the proposed Market Maker Trading Permit fees are reasonable in that they are lower than comparable fees at other options exchanges.
The proposed fees are equitable and not unfairly discriminatory as the fees apply equally to all Market Makers. As such, all similarly situated Market Makers, with the same number of appointments, will be subject to the same Market Maker Trading Permit fee. With the proposed changes, a Market Maker would be determined to be registered in a class if that Market Maker has been registered in one or more series in that class. Exchange Rule 602(a) provides that a Member that has qualified as a Market Maker may register to make markets in individual series of options. The proposed tiered structure is based on the number of options classes the Market Maker is registered in, not the number of series within the options class. The Exchange believes its proposal is fair and reasonable because the proposed tiered structure would encourage Market Makers to register in more series within each options class as each additional series in that class would not count towards the particular Market Maker's overall number of classes assigned, and cause them to qualify for a higher tier and higher fee.
The Exchange also believes that assessing lower fees to Market Makers that quote in fewer classes is reasonable and appropriate as it will allow the Exchange to retain and attract smaller-scale Market Makers, which are an integral component of the options industry marketplace. Since these smaller Market Makers utilize less bandwidth and capacity on the Exchange network due to the lower number of quoted classes, the Exchange believes it is reasonable and appropriate to offer such Market Makers a lower fee. The Exchange also notes that other options exchanges assess permit fees at different rates, based upon a member's participation on that exchange,
Further, the Exchange believes the proposed tiered structure of the Market Maker Trading Permit fees is reasonable and appropriate. Under the proposal, Market Makers will be charged monthly fees based on the greatest number of classes quoted on any given trading day in a calendar month or upon certain class volume percentages of national ADV. Under the proposed fee structure, the fees increase as the number of classes quoted by a Market Maker increases. The Exchange believes this structure is reasonable and not unfairly discriminatory because the Exchange's system requires increased performance and capacity in order to provide the opportunity for Market Makers to quote in a higher number of options classes on the Exchange. Specifically, the more classes that are actively quoted on the Exchange by a Market Maker requires increased memory for record retention, increased bandwidth for optimized performance, increased functionalities on each application layer, and increased optimization with regard to surveillance and monitoring of such classes quoted. As such, basing the Market Maker Trading Permit fee on the greatest number of classes quoted in on any given day in a calendar month is reasonable and appropriate when taking into account how the increased number of quoted classes directly impact the costs and resources required for the Exchange. Further, the Exchange believes that the proposed structure is equitable and not unfairly discriminatory as all similarly situated Market Makers will be charged the same fee. The Exchange notes that options exchanges in the industry calculate Market Maker Permit Fees in the same manner.
There is no requirement, regulatory or otherwise, that any broker-dealer connect to and access any (or all of) the available options exchanges. One other exchange recently noted in a proposal to amend their own trading permit fees
The Exchange believes that elasticity of demand for Exchange Membership exists when it comes to purchasing a Trading Permit and, as evidenced by the data provided below, prior fee proposals have resulted in Members terminating their memberships.
Further, other exchanges have also experienced termination of memberships if their members deem permit or membership fees to be unreasonable or excessive. For example, the Exchange notes that a BOX participant modified its access to BOX in connection with the implementation of a proposed change to BOX's permit fees.
The Exchange notes that there are material costs associated with providing the infrastructure and headcount to fully-support access to the Exchange. The Exchange incurs technology expenses related to establishing and maintaining Information Security services, enhanced network monitoring and customer reporting associated with its network technology. While some of the expense is fixed, much of the expense is not fixed, and thus increases as the expenses associated with access services for Market Makers increases. For example, new Market Makers to the Exchange may require the purchase of additional hardware to support those Members as well as enhanced monitoring and reporting of customer performance that the Exchange provides. Further, as the total number of Market Makers increase, the Exchange may need to increase its data center footprint and consume more power, resulting in increased costs charged by their third-party data center provider. Accordingly, the cost to the Exchange to provide access to its Market Makers is not fixed. The Exchange believes the proposed Market Maker Trading Permit fees are reasonable in order to offset a portion of the costs to the Exchange associated with providing access to Market Makers to its quote and order infrastructure.
The Exchange believes that charging higher fees to Market Makers, who connect solely through the MEO Interface, is not unfairly discriminatory because Market Makers continue to account for the vast majority of network capacity utilization and trading activity on the Exchange and the MEO Interface provides higher throughput and enhanced functionality compared to the FIX Interface, justifying the increased cost. MEO Interface users account for the majority of expenses placed on the Exchange's systems. The MEO Interface also provides additional functionality that Market Makers using the MEO Interface use to fulfill their market making obligations. The Exchange offers three time-in-force modifiers:
The Exchange notes that while Market Makers continue to account for a vast majority of the increased System usage placed on the Exchange, Market Makers continue to be valuable market participants on the exchanges as the options market is a quote driven industry. The Exchange recognizes the value that Market Makers bring to the Exchange. The Exchange proposes higher, separate fees for Market Makers that are more aligned with the costs and resources that Market Makers continue to place on the Exchange and its systems.
The Exchange believes that the proposed Market Maker Trading Permit fees are reasonable, equitable, and not unfairly discriminatory. The Exchange believes that the reasonableness of its proposed fees is demonstrated by the very fact that such fees are in line with, and in some cases lower than, the costs of similar access fees at other exchanges.
The Exchange again notes that it operates in a highly competitive market in which market makers can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually adjust its fees for services and products, in addition to order flow, to remain competitive with other exchanges. The Exchange believes that the proposed changes reflect this competitive environment.
The Exchange again notes it is not aware of any reason why Market Makers could not simply drop their access to an exchange (or not initially access an exchange) if an exchange were to establish prices for its non-transaction fees that, in the determination of such Market Maker, did not make business or economic sense for such Market Maker to access such exchange. The Exchange again notes that no market makers are required by rule, regulation, or competitive forces to be a Market Maker on the Exchange.
In sum, the Exchange believes the proposed fees are reasonable and reflect a competitive environment, as the Exchange seeks to amend its Trading Permit fees for Market Makers, while still attracting Market Makers to continue to, or seek to, access the Exchange. The Exchange further believes the proposed Trading Permit fees discussed herein are an appropriate balance between offsetting the costs to which Market Makers cost the Exchange and continuing to incentivize Market Makers to access and make a market on the Exchange.
The Exchange believes its proposal to change the word “Member” to “EEM” under the heading “Type of Trading Permit” in the table of Trading Permit fees that are based on type of interface used, FIX or MEO, is reasonable because it will provide additional clarity within the Fee Schedule. As stated above, the Exchange has two categories of Members, Market Makers and EEMs. This proposed change would remove impediments to and perfect the mechanism of a free and open market and a national market system because it specify that there are separate Trading Permit fee tables for EEMs and Market Makers, removing the potential investor confusion and clearly setting forth which fee is applicable to EEMs and which fee is applicable to Market Makers.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
The Exchange believes that the proposed Market Maker Trading Permit fees do not place certain market participants at a relative disadvantage to other market participants because the proposed fees do not favor certain categories of market participants in a manner that would impose a burden on competition; rather, the fee rates are designed in order to provide objective criteria for Market Makers of different sizes and business models that best matches their quoting activity on the Exchange. Further, the Exchange believes that the proposed Market Maker Trading Permit fees will not impose a burden on intramarket competition because, when these fees are viewed in the context of the overall activity on the Exchange, Market Makers: (1) consume the most bandwidth and resources of the network; (2) transact the vast majority of the volume on the Exchange; and (3) require the high touch network support services provided by the Exchange and its staff, including more costly network monitoring, reporting and support services, resulting in a much higher cost to the Exchange. The Exchange notes that the majority of customer demand comes from Market Makers, whose transactions make up a majority of the volume on the Exchange. Further, as discussed herein, other Member types (Broker Dealers, Professional Customers, and Priority Customers) take up significantly less Exchange resources and costs. As such, the Exchange does not believe charging Market Makers higher Trading Permit fees than other Member types will impose a burden on intramarket competition.
The Exchange believes that the tiered structure of the proposed Market Maker Trading Permit fees will not impose a burden on intramarket competition because the tiered structure takes into account the number of classes quoted by each individual Market Maker. As discussed herein, the Exchange's system requires increased performance and capacity in order to provide the opportunity for each Market Maker to quote in a higher number of options classes on the Exchange. Specifically, the more classes that are actively quoted on the Exchange by a Market Maker requires increased memory for record retention, increased bandwidth for optimized performance, increased functionalities on each application layer, and increased optimization with regard to surveillance and monitoring of such classes quoted. As such, basing the Market Maker Trading Permit fee on the greatest number of classes quoted in on any given day in a calendar month is reasonable and appropriate when taking into account how the increased number of quoted classes directly impact the costs and resources for the Exchange.
The Exchange believes the proposed Market Maker Trading Permit fees do
Market making firms are not forced to become market makers on all options exchanges. The Exchange notes that it has far less Market Makers as compared to the much greater number of market makers at other options exchanges. There are a number of large market makers that are participants of other options exchange but not Members of the Exchange. The Exchange is also unaware of any assertion that its existing fee levels or the proposed Market Maker Trading Permit fees would somehow unduly impair its competition with other options exchanges. To the contrary, if the fees charged are deemed too high by a market making firm, they can simply discontinue their membership with the Exchange.
The Exchange operates in a highly competitive market in which market participants can readily favor one of the 15 competing options venues if they deem fee levels at a particular venue to be excessive. Based on publicly-available information, and excluding index-based options, no single exchange has more than 11-12% equity options market share.
Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment.
The Exchange believes its proposal to change the word “Member” to “EEM” under the heading “Type of Trading Permit” in the table of Trading Permit fees that are based on type of interface used, FIX or MEO, will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes the proposed changes will not impose any burden on intra-market competition because the change simply clarifies that the first table of Trading Permit fees applies only to EEMs. The Exchange believes the proposed change will have not impose any burden on intra-market competition as the proposed change is not designed to address any competitive issue but rather is designed to provide clarity to the Fee Schedule. In addition, the Exchange does not believe the proposal will impose any burden on inter-market competition as the proposal does not address any competitive issues and is intended to protect investors by providing further transparency and precision for the Fee Schedule.
Written comments were neither solicited nor received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to delay implementation of pending amendments to Equity 4, Rules 4120, 4702 and 4703
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
On November 14, 2022, the Exchange plans introduce a new upgraded version of the OUCH Order entry protocol
By way of background, the functional enhancements to OUCH set forth in the Proposal will enable the Exchange to upgrade the logic and implementation of certain of its Order Types and Order Attributes so that the features are more robust, streamlined, and harmonized across the Exchange's Systems and Order entry protocols. The Exchange developed OUCH with simplicity in mind, and therefore, it presently lacks certain complex order handling capabilities. By contrast, the Exchange specifically designed its RASH Order Entry Protocol
Specifically, the Proposal will amend Rule 4702 pertaining to Order Types to specify that, going forward, OUCH may be used to enter certain Order Types together with certain Order Attributes, whereas now, Rule 4702 specifies that RASH, FIX, and QIX, but not OUCH, may be used to enter such combinations of Order Types and Attributes.
Unfortunately, none of these new OUCH functionalities set forth in the Proposal will be available on November 14, 2022, and they may not be available for several months thereafter due to delays in completing the necessary
As such, the new Rules set forth in the Proposal will not be operational on November 14th. Instead, existing Rules governing Order Types, Order Attributes and Order handling and trading behavior on the Exchange will continue to apply as of November 14th and until such date as all of the functional upgrades to OUCH are complete and ready for implementation. The Exchange will announce the implementation date of the new OUCH functionalities, and of the new Rules set forth in the Proposal, in an Equity Trader Alert at least 30 days prior to implementation. A present, the Exchange expects that the new OUCH functionality will be ready for full implementation in the second or third quarter of 2023, although that time frame is subject to change.
The Exchange believes that its proposal is consistent with Section 6(b) of the Act,
It is consistent with the Act to delay implementation of pending amendments to the Exchange's Rulebook relating to effectuate functional upgrades to OUCH because such functional upgrades will not be ready for implementation upon the launch of the new version of the OUCH protocol on November 14, 2022. The Exchange believes that it is in the best interests of investors and the public, and consistent with the maintenance of an orderly market, to avoid confusion by maintaining its current Rulebook governing OUCH until such time as the Exchange is ready to implement the new functionality.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change will merely delay the implementation schedule for the Proposal as well as the Rules that will apply to participants and their Orders in the interim period.
No written comments were either solicited or received.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing.
The Commission believes that a waiver of the operative delay is consistent with the protection of investors and the public interest because it allow the Exchange to avoid confusion that might otherwise arise on November 14, 2022, the date when the Proposal is currently scheduled to become operative, if the Exchange's Rulebook was to suggest to participants that OUCH Orders will behave in a manner that is not yet accurate. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B)
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
On May 26, 2022, The Depository Trust Company (“DTC”), Fixed Income Clearing Corporation (“FICC”), and National Securities Clearing Corporation (“NSCC”) (each a “Clearing Agency,” and collectively, the “Clearing Agencies”), filed with the Securities and Exchange Commission (“Commission”) proposed rule changes SR-DTC-2022-006, SR-FICC-2022-004, and SR-NSCC-2022-006 (the “Proposed Rule Changes”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Proposed Rule Changes were published for comment in the
The Clearing Agencies adopted the Clearing Agency Stress Testing Framework (Market Risk) (“ST Framework”) to set forth the manner in which they identify, measure, monitor, and manage their credit exposures to participants and those arising from their respective payment, clearing, and settlement processes by, for example, maintaining sufficient prefunded financial resources to cover its credit exposures to each participant fully with a high degree of confidence and testing the sufficiency of those prefunded financial resources through stress testing.
First, the proposed rule change would amend both the ST Framework and the LRM Framework to move descriptions of the Clearing Agencies' liquidity stress testing activities,
Second, the proposed changes would amend the ST Framework to (1) enhance stress testing for GSD to obtain certain data utilized in stress testing from external vendors and implement a back-up stress testing calculation that would
Third, the proposed changes would amend the LRM Framework to update and clarify the statements in the LRM Framework, as further described below.
Finally, the proposed changes would amend the MBSD Rules to remove duplicative disclosures regarding the stress testing program, as further described below.
The proposed changes would amend both the ST Framework and the LRM Framework to move descriptions of the Clearing Agencies' liquidity stress testing activities from the LRM Framework to the ST Framework. These activities are primarily performed by the Stress Testing Team within the Group Chief Risk Office (“GCRO”) of the Depository Trust and Clearing Corporation, which includes members of the Market Risk Management and the Liquidity Risk Management groups within the GCRO.
The Clearing Agencies propose several amendments to both the ST Framework and the LRM Framework to incorporate these changes. First, Section 1 (Executive Summary) and Section 4 (Liquidity Risk Management Regulatory Requirements) of the LRM Framework would be amended to make clear that compliance with the requirements of Rule 17Ad-22(e)(7)(vi) are not addressed in that document, and are addressed in the ST Framework. Section 2 (Glossary of Key Terms) of the LRM Framework would also be amended to include definitions of “Clearing Agency Stress Testing Framework” and the “Stress Testing Team,” and to remove the definition of the Enterprise Stress Testing Council, which is an internal forum that addresses stress testing matters. Finally, Section 6 (Liquidity Risk Management) of the LRM Framework would be amended to describe at a high-level the activities related to stress testing of the Clearing Agencies' qualifying liquid resources and to state that these activities are described in greater detail in the ST Framework.
The proposed change would also require revisions throughout the ST Framework to include descriptions of liquidity stress testing activities that support the Clearing Agencies' compliance with the requirements of Rule 17Ad-22(e)(7)(vi) within the existing sections of the ST Framework. These proposed changes would include revisions to Section 1 (Executive Summary) of the ST Framework to clarify that stress testing related to liquidity risk management is described in this document, and revisions to Section 2 (Glossary of Key Terms) to include definitions related to these activities. These definitions would include the Liquidity Risk Management group within GCRO and a Clearing Agency Liquidity Risk Management Framework. Section 4 of the ST Framework would be renamed “Stress Testing Requirements” and would be amended to make clearer which requirements in Rules 17Ad-22(e)(4) and (7) are addressed in the ST Framework, and to identify the documents where the requirements not addressed in the ST Framework are addressed.
The proposed changes to the ST Framework would create a new Section 6, which would be named “Qualifying Liquid Resources—Liquidity Risk Management,” to describe at a high-level how each of the Clearing Agencies determine the amount and regularly test the sufficiency of their respective qualifying liquid resources. This new section would include language that is substantially identical to language that would be removed from Section 6 (Liquidity Risk Management) of the LRM Framework.
The new Section 7 (Stress Testing Methodologies) (previously numbered Section 6) of the ST Framework would be updated to include descriptions of the methodologies used in liquidity stress testing. Such methodologies would not change substantively, and the language used in the revisions to this section would be substantively identical to language that would be removed from Section 6 (Liquidity Risk Management) of the LRM Framework.
Finally, the new Section 8 of the ST Framework (previously numbered Section 7), which would be renamed “Stress Testing Governance and Escalation Procedures,” would be amended to include matters related to liquidity stress testing. More specifically, the new Section 8.1 would address governance and oversight of stress testing, which is set forth in a number of internal documents, and overseen by a stress testing committee, the Management Risk Committee and the Risk Committee of the Board of Directors of the Clearing Agencies. The new Section 8.2 would describe the daily monitoring for threshold breaches and liquidity shortfalls, and the escalations and actions that would follow those breaches. More specifically, the Clearing Agencies monitor for breaches of a “Cover One Ratio,” which is defined as the ratio of a family of affiliated Members' deficiency over the total value of the applicable Clearing Agencies' Clearing Fund or Participants Fund, excluding the sum value of the applicable family's required deposit to the Clearing Fund or Participants Fund, as applicable. With respect to liquidity stress testing, the Clearing Agencies monitor daily for liquidity shortfalls, which trigger a series of escalations and remediation actions, which would be identified in this new Section 8.2.
The new Section 8.3 would address comprehensive analyses of stress scenarios, which occur on at least a monthly basis. These analyses include (1) daily stress testing results, model parameters, model assumptions, and model performance, and (2) each stress scenario set for its comprehensiveness and relevance, including any changes or updates to such scenarios for the period. The new Section 8.4 would address the escalations and reporting of the monthly analyses of stress scenarios. Finally, the new Section 8.5 would address the regular escalation of the results of stress testing, including any concerns related to those results.
Each of these subsections would address stress testing related to market risk, using language that is currently in the ST Framework, and would include language to address liquidity stress testing that would be substantially similar to the language removed from the LRM Framework. Revisions to the language removed from the LRM
In connection with the changes described above, the proposed amendments would also reflect the recategorization of liquidity stress scenarios. Previously, liquidity stress scenarios were categorized as Level 1, 2 and 3 scenarios. Level 1 scenarios described qualifying liquid resources under normal market conditions and were considered “baseline” scenarios. Level 2 scenarios assumed a wide range of foreseeable stress scenarios that included, but were not limited to, the default of the family of affiliated Members that would generate the largest aggregate payment obligation for each Clearing Agency in extreme but plausible market conditions. These scenarios were designed to identify the qualifying liquid resources each Clearing Agency should maintain to meet compliance with Rule 17Ad-22(e)(7)(i). Finally, the Level 3 scenarios were divided into either (1) regulatory scenarios, which were designed to meet the requirements of Rule 17Ad-22(e)(7)(vi)(A), and (2) informational scenarios, which were designed to be performed for informational and monitoring purposes using stress scenarios that exceed the requirements of Rule 17Ad-22(e)(7)(vi)(A).
The Clearing Agencies state that, while they continue to maintain a wide range of stress scenarios that are designed to comply with the requirements of Rules 17Ad-22(e)(7), in order to simplify the descriptions of its liquidity stress scenarios and align them with the categorization of market risk stress scenarios, the Clearing Agencies have re-categorized the liquidity stress scenarios and eliminated the Level 1, Level 2 and Level 3 categories. Instead, all stress scenarios would be described in Section 6 of the ST Framework as being either (1) regulatory stress scenarios, which are designed to comply with the requirements of Rules 17Ad-22(e)(4)(i) and (vi)(A), and Rules 17Ad-22(e)(7)(i) and (vi)(A); or (2) informational stress scenarios, which may utilize parameters and assumptions that exceed the requirements of Rules 17Ad-22(e)(4)(vi)(A) and (7)(vi)(A) and are utilized for informational, analytical and/or monitoring purposes only. The Clearing Agencies state that this proposed change is a change only to the categorization of these stress scenarios and is not a change to how the Clearing Agencies conduct liquidity stress testing or otherwise meet the requirements of Rule 17Ad-22(e)(7)(vi)(A).
The proposed changes would amend the ST Framework to (1) incorporate the use of certain data utilized in stress testing from external vendors and implement a back-up stress testing calculation that would be utilized in the event such data is not supplied by its vendors, similar to the process currently used at MBSD, which is currently the case; (2) reflect that a stress testing team is primarily responsible for the actions described in the ST Framework, and (3) make other revisions to update and clarify the statements in the ST Framework, as further described below.
First, the proposed changes would amend GSD stress testing to utilize vendor-supplied historical risk factor time series data (“Historical Data”) and vendor-supplied security-level risk sensitivity data (“Security-Level Data”) in the stress testing program. This proposed enhancement would be similar to the approach utilized in MBSD stress testing.
The vendor-sourced Historical Data would include data regarding (1) interest rate, (2) implied inflation rate, (3) agency spread, (4) mortgage option adjusted spread, (5) interest rate volatility, and (6) mortgage basis. The vendor-sourced Security-Level Data would include data regarding (1) sensitivity to interest rates, (2) implied inflation rate, (3) agency spread, (4) convexity, (5) sensitivity to mortgage option adjusted spread, (6) sensitivity to interest rate volatility, and (7) sensitivity to mortgage basis. FICC currently utilizes the Historical Data and Security-Level Data in GSD's value-at-risk (“VaR”) model, which calculates the VaR Charge component of GSD's Clearing Fund (referred to in the GSD Rulebook as Required Fund Deposit).
As described in greater detail in the ST Framework,
FICC would utilize the vendor-sourced data in the development of historical stress scenarios and in the risk measurement and aggregation process of the GSD stress testing program. More specifically, the Historical Data would be used to identify the largest historical changes of risk factors that influence the pricing of product cleared by GSD, in connection with the development of stress scenarios. The vendor-sourced Historical Data would identify stress risk exposures under broader and more varied market conditions than the data currently available to FICC.
FICC would utilize both the Historical Data and the Security-Level Data in the risk measurement and aggregation process of stress testing. FICC believes that the vendor-sourced Security-Level Data is more stable and robust than the data currently utilized by FICC for GSD stress testing.
Finally, the proposed changes to enhance GSD stress testing would also implement a back-up calculation that GSD would utilize in the event that the vendor fails to provide such data to GSD. Specifically, if the vendor fails to provide any data or a significant portion of data in accordance with the timeframes agreed to by FICC and the vendor, FICC would use the most recently available data on the first day that such disruption occurs in its stress
The proposed back-up calculation would include the following calculations: (1) calculate each Netting Member's portfolio net exposures, (2) calculate the historical stress return, and (3) calculate each Netting Member's stress profits and losses. FICC would use publicly available indices as the data source for the stress return calculations. This calculation would be referred to as the Back-up Stress Testing Calculation in the ST Framework.
The Clearing Agencies would describe the use of vendor-sourced data in stress testing for GSD and MBSD and the Back-up Stress Testing Calculation, as described above, in a new Section 7.1 of the ST Framework.
As described above, stress testing for the Clearing Agencies is primarily performed by the Stress Testing Team, which includes members of both Market Risk Management and Liquidity Risk Management of DTCC within GCRO. The Stress Testing Team took over stress testing responsibilities related to liquidity risk management in late 2019 to centralize stress testing and related responsibilities under one team.
Therefore, the Clearing Agencies are proposing to include a general statement in Section 1 (Executive Summary) of the ST Framework that, unless otherwise specified, actions in the ST Framework related to stress testing are performed by the Stress Testing Team. The proposed changes would also amend Section 3 (Framework Ownership and Change Management) of the ST Framework to make it clear that the Stress Testing Team owns and manages the ST Framework and is responsible for reviewing the ST Framework no less frequently than annually.
In connection with this proposed change, the ST Framework would also be updated to describe actions related to stress testing without specifically identifying the group responsible for those actions. These proposed changes would simplify the descriptions in the ST Framework, while clarifying the team responsible for conducting these actions in a general statement in the ST Framework.
Finally, the proposed changes would also make immaterial revisions to update and clarify the ST Framework. For example, the proposed changes would update the names of certain documents that support the ST Framework to refer to the Clearing Agencies, rather than DTCC, in the document titles. These documents were renamed to conform to internal document naming conventions. The proposed changes would also amend Section 2 (Glossary of Key Terms) of the ST Framework to clarify and simplify the use of certain key terms. For example, the proposed changes would move the definitions of “Members” and “Participants” from a footnote in Section 4 to Section 2, and would update the definition of “BRC,” which refers to the Risk Committee of the Boards of Directors of the Clearing Agency, to be more descriptive.
The proposed amendments would update Section 4 (Stress Testing Requirements) of the ST Framework to (1) more clearly state which requirements under Rules 17Ad-22(e)(4) and (7) are addressed in the ST Framework, (2) identify the separate documents that describe the requirements that are not addressed in the ST Framework, and (3) identify the requirements that are not applicable to the Clearing Agencies and, therefore, not described in any document.
In addition, the proposed change would also revise the description of reverse stress testing to more clearly describe the goal and purpose of this testing.
None of these proposed changes would make substantive revisions to the ST Framework or reflect material changes to how the Clearing Agencies conduct the activities described in the ST Framework but would update and clarify those descriptions.
In addition to removing descriptions of stress testing activities from the LRM Framework, as described in section I.A above, the proposed changes would also make immaterial revisions to update and clarify the LRM Framework. For example, the proposed changes would update the name of the team within the GCRO that is responsible for liquidity risk management from the Liquidity Product Risk Unit, or LPRU, to Liquidity Risk Management. This proposed change would reflect a recent organizational change to the name of this group.
Additionally, the proposed changes would update Section 10 (Liquidity Risk Tolerances) of the LRM Framework to state that an officer in Liquidity Risk Management is responsible for reviewing the Liquidity Risk Tolerance Statement.
Finally, the proposed rule change would remove descriptions of stress testing from the MBSD Rules, which would be duplicative of statements added to the ST Framework, described above. The Clearing Agencies do not believe that it is necessary to describe its stress testing program in multiple places in its rules, and that duplicative disclosures create a risk of inconsistencies. The ST Framework was designed to, among other things, describe the manner in which the Clearing Agencies test the sufficiency of their respective prefunded financial
As such, the proposed change would remove the duplicative descriptions of the MBSD stress testing program from the MBSD Rules by deleting the definition of “Back-up Stress Testing Calculation” from MBSD Rule 1 and Section 13 of MBSD Rule 4. As described in section II.C.1 above, the matters being removed from the MBSD Rules in this proposal would be addressed in the ST Framework.
Section 19(b)(2)(C) of the Act
Section 17A(b)(3)(F) of the Act
As described above in sections I.B, I.C.2, I.C.3, I.D, and I.E, the proposed changes would (1) amend both the ST Framework and the LRM Framework to move the descriptions of liquidity stress testing from the LRM Framework to the ST Framework, as well as to simplify the categorization of the liquidity stress scenarios; (2) amend the ST Framework to reflect that the Stress Testing Team is primarily responsible for stress testing activities; (3) update and clarify descriptions within the ST Framework; (4) update and clarify descriptions within the LRM Framework; and (5) remove certain duplicative sections from the MBSD Rules, as described above. These proposed changes should assist the Clearing Agencies in carrying out their stress testing and liquidity risk management functions and improve the clarity of the Frameworks in describing the Clearing Agencies' processes and responsibilities. With respect to the ST Framework, as described in sections I.B, I.C.2, and I.C.3, these changes should help maintain the Clearing Agencies' ability to determine and evaluate the credit risk presented by Clearing Agencies' members by testing (i) the sufficiency of their credit resources in a variety of extreme but plausible scenarios, and (ii) the potential losses to the Clearing Agencies from a participant default. The continued ability to evaluate credit risk could, in turn, enable the Clearing Agencies to deploy their risk-management tools more effectively to manage the credit and market presented by such members. Through such preparation, the Framework could decrease the possibility of a member default. By enabling the Clearing Agencies to use their risk-management tools to monitor its credit and market more effectively, the proposed amendments to the ST Framework are designed to help mitigate the risk that the Clearing Agencies and their non-defaulting members would suffer a loss from a member default.
Similarly, with respect to the LRM Framework, as described in sections I.D, these changes should help continue the Clearing Agencies' ability to carry out its liquidity risk management strategy such that, with respect to FICC and NSCC, they maintain liquid resources sufficient to meet the potential amount of funding required to settle outstanding transactions of a defaulting participant or family of affiliated participants in a timely manner, and with respect to DTC, it maintains sufficient available liquid resources to complete system-wide settlement on each business day, with a high degree of confidence and notwithstanding the failure to settle of the participant or affiliated family of participants with the largest settlement obligation. As such, the Clearing Agencies' liquidity risk management strategies address the Clearing Agencies' maintenance of sufficient liquid resources, which allow them to continue the prompt and accurate clearance and settlement of securities and can continue to assure the safeguarding of securities and funds which are in their custody or control or for which they are responsible notwithstanding the default of a participant or family of affiliated participants.
In addition, moving the description of the Clearing Agencies' liquidity stress testing activities into the ST Framework, the proposed change should create a description of the Clearing Agencies' collective stress testing activities in one place. Moreover, based on its review of the Proposed Rule Changes and its supervisory knowledge, the Commission understands that the Clearing Agencies are not amending their stress testing program in a substantive manner, but instead are reorganizing the stress testing scenarios and Frameworks to avoid duplication and confusion.
Therefore, the Commission finds that the proposed rule changes are designed to help promote prompt and accurate clearance and settlement, and assure the safeguarding of securities and funds which are in the custody or control of the Clearing Agencies or for which they are responsible, consistent with Section 17A(b)(3)(F) of the Act.
Second, as described in Section I.C.1, FICC proposes to use vendor-supplied data in GSD's stress testing program. The Commission believes that vendor-supplied data should allow FICC to identify and analyze risk exposures under a broad and varied range of stressed market conditions, which should, in turn, help FICC identify the amount of financial resources necessary to cover its credit exposure under stress scenarios in extreme but plausible market conditions. The Commission further believes that the use of vendor-supplied data should enable FICC to perform a robust assessment of the stress profits and losses calculation, identify and address potential risks with respect to specific Clearing Members and their affiliates, and in turn, should help FICC ensure that it is collecting adequate prefunded financial resources to cover its potential losses resulting from the default of clearing members and their affiliates under extreme but plausible market conditions.
Moreover, as also described in Section I.C.1., FICC proposes to use a back-up calculation for the GSD stress testing program in the event the vendor fails to provide FICC with the vendor-sourced data. The Commission believes that the back-up calculation is designed to provide FICC with a reasonable alternative method for calculating stress profit-and-loss in the event of an interruption in the vendor-sourced data feed. By providing FICC with a reasonable alternative method for conducting stress testing, the
Taken together, the Commission believes that these aspects of the proposed rule change, as described in section I.C.1, should better enable FICC to evaluate and manage the credit risk presented by its Clearing Members. The Commission believes that the proposed rule change is designed to improve FICC's ability to establish, implement, maintain and enforce written policies and procedures reasonably designed to maintain sufficient prefunded financial resources that, at a minimum, enable FICC to cover the default of the Clearing Member (including relevant affiliates) that would potentially cause the largest aggregate credit exposure for FICC in extreme but plausible conditions, as required under Rule 17Ad-22(e)(4)(iii).
Rule 17Ad-22(e)(4)(iii) requires, in part, each covered clearing agency to establish, implement, maintain and enforce written policies and procedures reasonably designed to effectively identify, measure, monitor, and manage its credit exposures to participants and those arising from its payment, clearing, and settlement processes, by maintaining additional financial resources at the minimum to enable it to cover a wide range of foreseeable stress scenarios that include, but are not limited to, the default of the participant family that would potentially cause the largest aggregate credit exposure for the covered clearing agency in extreme but plausible market conditions.
As described above in Section I.C.1, FICC proposes to change its stress testing methodology to use vendor-supplied data in the GSD stress testing program and to incorporate a back-up calculation that it would utilize in the event of an interruption in the availability of that data. Taken together, these changes should allow FICC to identify and analyze risk exposures under a broader range of stressed market conditions covering a longer time period, which should, in turn, help FICC identify the amount of financial resources necessary to cover its credit exposure under stress scenarios in extreme but plausible market conditions.
Accordingly, the Commission believes that FICC's proposed amendments to the ST Framework with respect to the GSD stress testing program set forth in section I.C.1 are consistent with Rule 17Ad-22(e)(4)(iii) because it should better enable FICC to assess its ability to maintain sufficient financial resources to cover a wide range of foreseeable stress scenarios that include the default of the member (including relevant affiliates) that would potentially cause FICC's largest aggregate credit exposure in extreme but plausible conditions.
On the basis of the foregoing, the Commission finds that the Proposed Rule Changes are consistent with the requirements of the Act and in particular with the requirements of Section 17A of the Act
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
The MSRB filed with the Commission a proposed rule change to amend Supplementary Material .01, Temporary Relief for Completing Office Inspections, of MSRB Rule G-27, on supervision, to further extend the current regulatory relief and permit brokers, dealers and municipal securities dealers (collectively, “dealers”) to conduct office inspections, due to be completed during calendar year 2023, remotely, through June 30, 2023 (the “proposed rule change”).
The MSRB has designated the proposed rule change as constituting a “noncontroversial” rule change under Section 19(b)(3)(A)
The text of the proposed rule change is available on the MSRB's website at
In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The MSRB has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
The MSRB has continued to monitor the impact of the coronavirus disease (“COVID-19” or “pandemic”) on municipal market participants and how dealers' operations and business models have evolved during the public health crisis. The MSRB understands that a large number of firms have integrated a hybrid work environment in which particular business functions continue to be de-centralized. Given that dealers are still devising plans and spending time to implement hybrid work environments more fully, the MSRB believes the additional time of a six-month extension to conduct office inspections remotely, due to be completed in calendar year 2023, would allow dealers time to focus on the integration of their hybrid work environments.
The MSRB previously filed a proposed rule change for immediate effectiveness with the SEC in April 2020,
Through stakeholder engagement, the MSRB understands that dealers delayed their original return to office plans due to the continued pandemic and only more recently implemented long-term hybrid work arrangements dependent on functions and regulatory requirements, which continue to lead to logistical challenges to conducting in-person office inspections that are still being addressed. To that end, in recognition of the aforementioned challenges, and in order to address ongoing industry-wide concerns regarding having to conduct in-person office inspections while safety concerns continue to evolve as new infections, hospitalizations, and deaths due to the COVID-19 virus still persist in the United States,
The conditions required to be met for dealers to avail themselves of the option to conduct office inspections remotely would remain unchanged under Rule G-27; however, amendments are being proposed to paragraphs (a) and (d) of Supplementary Material .01 to reflect the additional extension of time under the proposed rule change. Pursuant to paragraphs (b)-(d) of Supplementary Material .01 of MSRB Rule G-27, dealers electing to conduct their office inspections remotely must (i) amend or supplement their written supervisory procedures as appropriate to provide for remote inspections that are reasonably designed to assist in detecting and preventing violations of, and achieving compliance with, applicable securities laws and regulations, and with applicable Board rules; (ii) use remote office inspections as part of an effective supervisory system, which would include the ongoing review of activities and functions occurring at all offices and locations whether or not the dealer conducts inspections remotely; and (iii) make and maintain the required records for all offices or locations that had inspections that were conducted remotely; and any offices or locations for which the dealer determined to impose additional supervisory procedures or more frequent monitoring.
The MSRB believes that the proposed rule change is consistent with Section 15B(b)(2)(C) of the Exchange Act,
The proposed rule change is designed to provide dealers additional time to comply with certain obligations under MSRB rules for a temporary period of time. The proposed rule change does not relieve dealers from compliance with their core regulatory obligations to establish and maintain a system to supervise the activities of each of their associated persons that is reasonably designed to achieve compliance with applicable rules and regulations, and with applicable MSRB rules, which serve to protect investors, municipal entities, obligated persons, and the public interest. The MSRB continues to believe that an additional extension affording dealers the option to conduct remote inspections, due to be completed in calendar year 2023, for the first half of the calendar year, or until June 30, 2023, is a prudent regulatory approach. This approach will allow dealers time to adapt to long-term hybrid work arrangements more fully and to continue to assess the ongoing events related to the pandemic while continuing to serve the important investor protection objectives of the inspection obligations.
In a time when faced with unique challenges resulting from the sustained pandemic and while much uncertainty still remains, the proposed rule change will afford dealers the ability to safeguard the health and safety of their personnel and to more effectively allocate resources to serve and promote the protection of investors, municipal entities, obligated persons and the public interest. In addition, the proposed rule change also will alleviate some of the operational challenges dealers may be experiencing, which will allow them to more effectively allocate resources to the operations that facilitate transactions in municipal securities and municipal financial products, to remove impediments to and perfect the mechanism of a free and open market in municipal securities and municipal financial products.
Section 15B(b)(2)(C) of the Act requires that MSRB rules be designed not to impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
Written comments were neither solicited nor received on the proposed rule change.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
For the Commission, pursuant to delegated authority.
Securities and Exchange Commission (“Commission”).
Notice.
Notice of an application under section 6(c) of the Investment Company Act of 1940 (the “Act”) for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c-1 under the Act and under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act.
The Commission:
Deepak T. Pai, Senior Counsel, or Lisa Reid Ragen, Branch Chief, at (202) 551-6825 (Division of Investment Management, Chief Counsel's Office).
For Applicants' representations, legal analysis, and conditions, please refer to Applicants' second amended and restated application, dated November 16, 2022, which may be obtained via the Commission's website by searching for the file number at the top of this document, or for an Applicant using the Company name search field, on the SEC's EDGAR system. The SEC's EDGAR system may be searched at
For the Commission, by the Division of Investment Management, under delegated authority.
Pursuant to Section 19(b)(1)
The Exchange proposes to (1) make certain revisions to the preamble to Rule 10.9217 (Violations Appropriate for Disposition Under Rule 10.9216(b)); (2) add Rule 2.1210 (Registration Requirements) to the list of minor rule violations in Rule 10.9217(f) and associated fine levels in Rule 10.9217(g); and (3) make certain non-substantive clarifying changes to Rule 10.9217. The proposed rule change is available on the Exchange's website at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item III below. The Exchange has prepared summaries, set forth in sections A, B, and C below,
The Exchange proposes to (1) make certain revisions to the preamble to Rule 10.9217 (Violations Appropriate for Disposition Under Rule 10.9216(b)); (2) add Rule 2.1210 (Registration Requirements) to the list of minor rule violations in Rule 10.9217(f) and associated fine levels in Rule 10.9217(g); and (3) make certain non-substantive clarifying changes to Rule 10.9217.
The preamble to current Rule 10.9217 consists of four subsections (a) through (d). The Exchange propose to modify subsections (a) through (d) based on the preamble to the version of Rule 10.9217 adopted by the Exchange's affiliate NYSE Arca, Inc. (“NYSE Arca”), as follows.
Subsection (a) currently provides that any ETP Holder or Associated Person may be subject to a fine under Rule 10.9216(b) with respect to any rules listed in the rule and that the fine amounts and fine levels set forth therein apply to the fines imposed. Subsection (a) further provides that any fine imposed pursuant to the rule and not contested shall not be publicly reported, except as may be required by Rule 19d-1 under the Exchange Act or as may be required by any other regulatory authority.
The Exchange proposes that the current first sentence of subsection (a) would be unchanged except that the Exchange would add “, not to exceed $5,000,” after “fine” to clarify that a minor rule fine on the Exchange cannot exceed $5,000.
Subsection (b) currently provides that if a person or organization that has been fined pursuant to the rule pays the fine, such payment shall be deemed a waiver of any right to a disciplinary proceeding under the Rule 10.9000 Series and of any right to review of the matter by the BCC, CFR or the Board of Directors. This provision incorporated requirements originally set forth in the Exchange's legacy Rule 8.15(c). The Exchange's affiliates' rules contained similar provisions.
Subsection (c) currently provides that any person or organization that has been fined pursuant to Rule 10.9217 may contest such fine by filing with Enforcement a written application containing: (1) an identification of the Exchange action over which the review is being requested; (2) the reason(s) why the applicant disagrees with such action; and (3) the relief sought. Such written application must be submitted not more than five (5) business days after receipt of written notification that a fine has been imposed pursuant to this Rule. The subsection further provides that if a determination is contested pursuant to this subsection, the matter shall become a formal disciplinary action, and any penalty imposed by a hearing panel shall be publicly reported to the Exchange membership after such decision has become “final” pursuant to Rule 10.8313. Further, any person or organization found in violation of a minor rule under this plan is not required to report such violation on SEC Form BD or Form U-4, provided that the sanction imposed consists of a fine not exceeding $2,500 and the sanctioned person or organization has not sought an adjudication, including a hearing, or otherwise exhausted the administrative remedies available with respect to the matter. Finally, any fine imposed in excess of $2,500 will be subject to current rather than quarterly reporting pursuant to Rule 19d-1 under the Act.
The Exchange proposes to no longer permit persons or organizations fined pursuant to Rule 10.9217 to contest the minor rule violation letter by filing a written application and converting it into a regular disciplinary proceeding. None of the Exchange's affiliates that adopted the FINRA disciplinary rules permit persons or organizations fined pursuant to their version of Rule 10.9217 to contest the fine in this manner, including affiliates such as the NYSE that also permitted such a procedures under its legacy rules.
In order to effectuate this change, the Exchange proposes to delete the first three sentences of subsection (c). The last two sentences, which are identical to NYSE Arca Rule 10.9217(c), would remain unchanged.
The Exchange does not proposes any changes to current Rule 10.9217(d).
The Exchange proposes to add Rule 2.1210 the list of eligible rules in Rule 10.9217(f).
Rule 2.1210, which was adopted in 2018,
The Exchange proposes to add Rule 2.1210 to the list of rules in Rule 10.9217(f) eligible for disposition pursuant to a fine. A substantially similar version of Rule 2.1210 was adopted by the NYSE in 2018
The Exchange believes that the proposed change would strengthen the Exchange's ability to carry out its oversight and enforcement responsibilities in cases where full disciplinary proceedings are unwarranted in view of the minor nature of the particular violation.
The Exchange proposes to add clarifying language regarding the disposition of minor rule fines for violations of the CAT Compliance Rules in the Rule 6.6800 Series based on language adopted by the Exchange's affiliates. Specifically, the Exchange would add a new footnote 2 to current item 6 (proposed item 7, discussed above) of Rule 10.9217(g)(2) that would provide as follows:
For failures to comply with the Consolidated Audit Trail Compliance Rule requirements of the Rule 6.6800 Series, the Exchange may impose a minor rule violation fine of up to $2,500. For more serious violations, other disciplinary action may be sought.
The language is identical to that adopted by the Exchange's affiliates NYSE and NYSE Chicago, Inc.
The proposed rule change is consistent with Section 6(b) of the Act,
The Exchange believes that harmonizing the preamble to Rule 10.9217 with that of its affiliates would remove impediments to and perfect the mechanism of a free and open market and a national market system by a providing greater harmonization between Exchange rules and those of its affiliates in connection with minor rule fines, thereby fostering cooperation and coordination with persons engaged in facilitating transactions in securities and will remove impediments to and perfect the mechanism of a free and open market and a national market system. Moreover, by adopting the same applicable minor rule standards for violations of those standards as its affiliates, the Exchange would promote regulatory consistency.
More specifically, the Exchange believes that the proposed changes to Rule 10.9217(a) clarifying that minor rule fines cannot exceed $5,000 and deleting duplicative information
Minor rule fines provide a meaningful sanction for minor or technical violations of rules when the conduct at issue does not warrant stronger, immediately reportable disciplinary sanctions. The inclusion of a rule in Rule 10.9217 does not minimize the importance of compliance with the rule, nor does it preclude the Exchange from choosing to pursue violations of eligible rules through formal disciplinary action if the nature of the violations or prior disciplinary history warrants more significant sanctions. Rather, the Exchange believes that the proposed rule change will strengthen the Exchange's ability to carry out its oversight and enforcement responsibilities in cases where full disciplinary proceedings are unwarranted in view of the minor nature of the particular violation. The option to impose a minor rule sanction gives the Exchange additional flexibility to administer its enforcement program in the most effective and efficient manner while still fully meeting the Exchange's remedial objectives in addressing violative conduct.
The proposed rule change is thus designed to prevent fraudulent and manipulative acts and practices because it will provide the Exchange the ability to issue a minor rule fine for violations of the registration requirements set forth in Rule 2.1210 where a more formal disciplinary action may not be warranted or appropriate. In addition, the Exchange believes that adding rules based on the rules of its affiliate to the Exchange's minor rule plan, and adding associated fine levels based on the treatment of similar registration rule violations by its affiliate NYSE, would promote fairness and consistency in the marketplace by permitting the Exchange to issue a minor rule fine for violations of substantially similar rules that are already eligible for minor rule treatment, thereby harmonizing minor rule plan fines across affiliated exchanges for the same conduct. As noted, the proposed fine levels would be the same as the applicable fine levels for individuals violating NYSE Rule 1210 set forth in NYSE Rule 9217.
The Exchange further believes that the proposed amendments to Rule 10.9217 are consistent with Section 6(b)(6) of the Act,
The Exchange believes that the proposed non-substantive clarifying changes described above would add clarity, consistency and transparency to the Exchange's rules. The Exchange believes that adding such clarity and transparency would also be consistent with the public interest and the protection of investors because investors will not be harmed and in fact would benefit from increased transparency, thereby reducing potential confusion. In addition, the Exchange believes that the incorporating language relating to violations of the CAT Compliance Rules adopted by the Exchange's affiliates would promote fairness and consistency in the marketplace by eliminating differences and harmonizing language related to minor rule treatment of similar rule violations across affiliates. The proposed change is not intended to make any substantive change to the applicability of minor rule fines to violations of the CAT Compliance Rules or the amount of those fines.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not designed to address any competitive issue but rather to update the Exchange's rules to strengthen the Exchange's ability to carry out its oversight and enforcement functions and deter potential violative conduct and to align the Exchange's rule setting forth violations eligible for a minor rule fine more closely with that of its affiliates.
No written comments were solicited or received with respect to the proposed rule change.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.
As stated above, the Exchange proposes to (1) make certain revisions to the preamble to Rule 10.9217 (Violations Appropriate for Disposition Under Rule 10.9216(b)); (2) add Rule 2.1210 (Registration Requirements) to the list of minor rule violations in Rule 10.9217(f) and associated fine levels in Rule 10.9217(g); and (3) make certain non-substantive clarifying changes to Rule 10.9217.
The Commission believes that Rules 10.9216(b) and 10.9217 are an effective way to discipline a member for a minor violation of a rule. More specifically, the Commission believes that the proposed revisions to the preamble of Rule 10.9217 are consistent with the Act because they would add clarity to the Exchange's rules and may help the Exchange's ability to better carry out its oversight and enforcement responsibilities. The proposed revisions to the preamble of Rule 10.9217 also would align Rule 10.9217 with the rules of the Exchange's affiliates. The Commission believes that the proposed addition of Rule 2.1210 (Registration Requirements) to the Exchange's list of current minor rule violations provides a reasonable means of addressing violations that do not rise to the level of requiring formal disciplinary proceedings, while providing greater flexibility in handling certain violations. Furthermore, the Commission believes that amending the associated fine schedule is consistent with the Act because it may help the Exchange's ability to better carry out its oversight and enforcement responsibilities by levying appropriate fines for minor violations of the rules included in Rule 10.9217, including minor violations of Rule 2.1210. Finally the Commission believes that the Exchange's proposal to make certain non-substantive changes to Rule 10.9217 are consistent with the Act because these changes will add clarity to the Exchange's rules.
In approving the proposed rule change, the Commission in no way minimizes the importance of compliance with the Exchange's rules and all other rules subject to fines under Rules 10.9216(b) and 10.9217. The Commission believes that a violation of any self-regulatory organization's rules, as well as Commission rules, is a serious matter. However, Rules 10.9216(b) and 10.9217 provide a reasonable means of addressing rule violations that may not rise to the level of requiring formal disciplinary proceedings, while providing greater flexibility in handling certain violations. The Commission expects that the Exchange will continue to conduct surveillance with due diligence and make a determination based on its findings, on a case-by-case basis, whether a fine of more or less than the recommended amount is appropriate for a violation under Rules 10.9216(b) and 10.9217 or whether a violation requires formal disciplinary action.
For the same reasons as discussed above, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
The Exchange is filing a proposal to amend Exchange Rule 404, Series of Option Contracts Open for Trading.
The text of the proposed rule change is available on the Exchange's website at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
The Exchange proposes to amend Exchange Rule 404, Series of Option Contracts Open for Trading. Specifically, the Exchange proposes to amend Interpretations and Polices .02 of Rule 404 to (i) limit the number of Short Term Option Expiration Dates for options on SPDR S&P 500 ETF Trust (SPY), the INVESCO QQQ Trust
The Exchange also proposes to amend the definition of a Short Term Option Series contained in Exchange Rule 100.
Currently, after an option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day (“Short Term Option Opening Date”) series of options on that class that expire at the close of business on each of the next five Fridays that are business days and are not Fridays in which monthly options series or Quarterly Options Series expire (“Short Term Option Expiration Dates”). The Exchange may have no more than a total of five Short Term Option Expiration Dates not including any Monday or Wednesday SPY, QQQ, and IWM Expirations. Further, if the Exchange is not open for business on the respective Thursday or Friday, the Short Term Option Opening Date will be the first business day immediately prior to that respective Thursday or Friday. Similarly, if the Exchange is not open for business on a Friday, the Short Term Option Expiration Date will be the first business day immediately prior to that Friday.
Today, with respect to Wednesday SPY, QQQ, and IWM Expirations, the Exchange may open for trading on any Tuesday or Wednesday that is a business day series of options on SPY, QQQ, and IWM to expire on any Wednesday of the month that is a business day and is not a Wednesday in which Quarterly Options Series expire (“Wednesday SPY Expirations,” “Wednesday QQQ Expirations,” and “Wednesday IWM Expirations”). With respect to Monday SPY, QQQ, and IWM Expirations, the Exchange may open for trading on any Friday or Monday that is a business day series of options on SPY, QQQ, or IWM to expire on any Monday of the month that is a business day and is not a Monday in which Quarterly Options Series expire (“Monday SPY Expirations,” “Monday QQQ Expirations,” and “Monday IWM Expirations”), provided that Monday SPY Expirations, Monday QQQ Expirations, and Monday IWM Expirations that are listed on a Friday must be listed at least one business week and one business day prior to the expiration. The Exchange may list up to five consecutive Wednesday SPY Expirations, Wednesday QQQ Expirations, and Wednesday IWM Expirations and five consecutive Monday SPY Expirations, Monday QQQ Expirations, and Monday IWM Expirations at one time; the Exchange may have no more than a total of five each of Wednesday SPY Expirations, Wednesday QQQ Expirations, and Wednesday IWM Expirations and a total of five each of Monday SPY Expirations, Monday QQQ Expirations, and Monday IWM Expirations. Monday and Wednesday SPY Expirations, Monday and Wednesday QQQ Expirations, and Monday and Wednesday IWM Expirations will be subject to the provisions of Interpretations and Policies .02 of Exchange Rule 404.
At this time, the Exchange proposes to curtail the number of Short Term Option Expiration Dates from five to two
The Exchange proposes to create a new category of Short Term Option Expiration Dates called “Short Term Option Daily Expirations” which will only permit two Short Term Option Expiration Dates for each of Monday, Tuesday, Wednesday, and Thursday expirations at one time. The Exchange proposes to include a table, labeled “Table 1,” within Interpretations and Policies .02 of Rule 404, which specifies each symbol that qualifies as a Short Term Option Daily Expiration. The table would note the number of expirations for each symbol as well as expiration days. The Exchange proposes to include
In addition to the above, the Exchange may open for trading series of options on the symbols provided in Table 1 below that expire at the close of business on each of the next two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that are business days and are not business days in which monthly options series or Quarterly Options Series expire (“Short Term Option Daily Expirations”). The Exchange may have no more than a total of two Short Term Option Daily Expirations for each of Monday, Tuesday, Wednesday, and Thursday expirations at one time. Short Term Option Daily Expirations would be subject to this Policy .02
SPY, QQQ, and IWM Friday expirations and other option symbols expiring on a Friday that are not noted in Table 1 will continue to have a total of five Short Term Option Expiration Dates provided those Friday expirations are not Fridays in which monthly options series or Quarterly Options Series expire (“Friday Short Term Option Expiration Dates”). These expirations would be referred to as “Short Term Option Weekly Expirations” to distinguish them from the proposed expirations that would be subject to Short Term Option Daily Expirations. The Exchange proposes to add rule text to Policy .02 of Exchange Rule 404, which states that Monday Short Term Option Expiration Dates, Tuesday Short Term Option Expiration Dates, Wednesday Short Term Option Expiration Dates, and Thursday Short Term Option Expiration Dates, together with Friday Short Term Option Expiration Dates, are collectively “Short Term Option Expiration Dates.”
At this time, the Exchange proposes to expand the Short Term Option Series Program to permit the listing and trading of no more than a total of two consecutive Tuesday and Thursday “Tuesday Short Term Option Daily Expirations” and “Thursday Short Term Option Daily Expirations” each for SPY and QQQ at one time. Tuesday and Thursday Short Term Option Daily Expirations would be subject to Policy .02 of Exchange Rule 404.
A Short Term Option Series means a series in an option class that is approved for listing and trading on the Exchange in which the series is opened for trading on any Monday, Tuesday, Wednesday, Thursday, or Friday, that is a business day and that expires on the Monday, Wednesday, or Friday of the following business week that is a business day, or, in the case of a series that is listed on a Friday and expires on a Monday, is listed one business week and one business day prior to that expiration. If a Tuesday, Wednesday, Thursday, or Friday, is not a business day, the series may be opened (or shall expire) on the first business day immediately prior to that Tuesday, Wednesday, Thursday, or Friday. For a series listed pursuant to this section for Monday expiration, if a Monday is not a business day, the series shall expire on the first business day immediately following that Monday.
The Exchange proposes to amend the definition of Short Term Option Series in Exchange Rule 100 to accommodate the listing of options series that expire on Tuesdays and Thursdays. Specifically, the Exchange proposes to add Tuesday and Thursday to the permitted expiration days, which currently include Monday, Wednesday, and Friday, that it may open for trading.
The Exchange also proposes corresponding changes within Policy .02 of Exchange Rule 404, which sets forth the requirements for SPY and QQQ options that are listed pursuant to the Short Term Option Series Program as Short Term Option Daily Expirations. Similar to Monday and Wednesday SPY, QQQ, and IWM Short Term Option Daily Expirations within Policy .02 of Exchange Rule 404, the Exchange proposes that it may open for trading on any Monday or Tuesday that is a business day series of options on the symbols provided in Table 1 that expire at the close of business on each of the next two Tuesdays that are business days and are not business days in which monthly options series or Quarterly Options Series expire (“Tuesday Short Term Option Expiration Date”).
Likewise, the Exchange proposes that it may open for trading on any Wednesday or Thursday that is a business day series of options on symbols provided in Table 1 that expire at the close of business on each of the next two Thursdays that are business days and are not business days in which monthly options series or Quarterly Options Series expire (“Thursday Short Term Option Expiration Date”).
In the event that options on SPY and QQQ expire on a Tuesday or Thursday and that Tuesday or Thursday is the same day that a monthly option series or Quarterly Options Series expires, the Exchange would skip that week's listing and instead list the following week; the two weeks would therefore not be consecutive. Today, Monday and Wednesday Expirations in SPY, QQQ, and IWM skip the weekly listing in the event the weekly listing expires on the same day in the same class as a Quarterly Options Series. Currently, there is no rule text provision that states that Monday and Wednesday Expirations in SPY, QQQ, and IWM skip the weekly listing in the event the weekly listing expires on the same day in the same class as a monthly option series. Practically speaking, Monday and Wednesday Expirations in SPY, QQQ, and IWM would not expire on the same day as a monthly expiration.
The interval between strike prices for the proposed Tuesday and Thursday SPY and QQQ Short Term Option Daily Expirations will be the same as those for the current Short Term Option Series for Monday, Wednesday, and Friday expirations applicable to the Short Term Option Series Program.
With respect to the Short Term Option Series Program, a Tuesday or Thursday expiration series shall expire on the first business day immediately prior to that Tuesday or Thursday,
Currently, for each option class eligible for participation in the Short
Finally, the Exchange is amending Policy .02(b) of Exchange Rule 404, to conform the rule text to the usage of the term “Short Term Option Daily Expirations.” Today, with the exception of Monday and Wednesday SPY Expirations, Monday and Wednesday QQQ Expirations, and Monday and Wednesday IWM Expirations, no Short Term Option Series may expire in the same week in which monthly option series on the same class expire. With this proposal, Tuesday and Thursday SPY Expirations and Tuesday and Thursday QQQ Expirations would be treated similarly to existing Monday and Wednesday SPY, QQQ, and IWM Expirations. With respect to monthly option series, Short Term Option Daily Expirations will be permitted to expire in the same week in which monthly option series on the same class expire. Not listing Short Term Option Daily Expirations for one week every month because there was a monthly on that same class on the Friday of that week would create investor confusion.
Further, as with Monday and Wednesday SPY, QQQ, and IWM Expirations, the Exchange would not permit Tuesday and Thursday Short Term Option Daily Expirations to expire on a business day in which monthly options series or Quarterly Options Series expire.
The Exchange does not believe that any market disruptions will be encountered with the introduction of P.M.-settled Tuesday and Thursday Short Term Option Daily Expirations. The Exchange has the necessary capacity and surveillance programs in place to support and properly monitor trading in the proposed Tuesday and Thursday Short Term Option Daily Expirations. The Exchange currently trades P.M.-settled Short Term Option Series that expire Monday and Wednesday for SPY, QQQ, and IWM and has not experienced any market disruptions nor issues with capacity. Today, the Exchange has surveillance programs in place to support and properly monitor trading in Short Term Option Series that expire Monday and Wednesday for SPY, QQQ, and IWM.
The Exchange's proposal mirrors that of Nasdaq ISE, which was recently approved by the Commission.
Notwithstanding this implementation, Monday and Wednesday Expirations in SPY, QQQ, and IWM that were listed prior to the date of implementation will continue to be listed on the Exchange until those options expire pursuant to current Short Term Option Series Rules within Interpretations and Policies .02 of Exchange Rule 404.
The Exchange believes that its proposed rule change is consistent with Section 6(b) of the Act
The proposal is consistent with the Act as this proposal reduces the number of Short term Option Expirations to be listed on the Exchange. This reduction would remove impediments to and perfect the mechanism of a free and open market by encouraging Market Makers
Similar to SPY, QQQ, and IWM Monday and Wednesday Expirations (proposed to be SPY, QQQ, and IWM Monday and Wednesday Short Term Daily Expirations), the introduction of SPY and QQQ Tuesday and Thursday Short Term Daily Expirations is consistent with the Act as it will, among other things, expand hedging tools available to market participants and continue the reduction of the premium cost of buying protection. The Exchange believes that SPY and QQQ Tuesday and Thursday expirations (renamed SPY and QQQ Tuesday and Thursday Short Term Daily Expirations) will allow market participants to purchase SPY and QQQ options based on their timing as needed and allow them to tailor their investment and hedging needs more effectively. Further, the proposal to permit Tuesday and Thursday Short Term Daily Expirations for options on SPY and QQQ listed pursuant to the Short Term Option Series Program, subject to the proposed limitation of two expirations, would protect investors and the public interest by providing the investing public and other market participants more flexibility to closely tailor their investment and hedging decisions in SPY and QQQ options, thus
In particular, the Exchange believes the Short Term Option Series Program has been successful to date and that Tuesday and Thursday SPY and QQQ Short Term Daily Expirations should simply expand the ability of investors to hedge risk against market movements stemming from economic releases or market events that occur throughout the month in the same way that the Short Term Option Series Program has expanded the landscape of hedging. Similarly, the Exchange believes Tuesday and Thursday SPY and QQQ Short Term Daily Expirations should create greater trading and hedging opportunities and flexibility, and will provide customers with the ability to tailor their investment objectives more effectively. The Exchange currently lists Monday and Wednesday SPY, QQQ, and IWM Expirations (renamed SPY, QQQ, and IWM Monday and Wednesday Short Term Daily Expirations).
Today, with the exception of Monday and Wednesday SPY Expirations, Monday and Wednesday QQQ Expirations, and Monday and Wednesday IWM Expirations, no Short Term Option Series may expire in the same week in which monthly option series on the same class expire. With this proposal, Tuesday and Thursday SPY Expirations and Tuesday and Thursday QQQ Expirations would be treated similarly to existing Monday and Wednesday SPY, QQQ, and IWM Expirations. The Exchange believes that permitting Short Term Option Daily Expirations to expire in the same week that standard monthly options expire on Fridays is consistent with the Act. Not listing Short Term Option Daily Expirations for one week every month because there was a monthly on that same class on the Friday of that week would create investor confusion.
Further, as with Monday and Wednesday SPY, QQQ, and IWM Expirations, the Exchange would not permit Tuesday and Thursday Short Term Option Daily Expirations to expire on a business day in which monthly options series or Quarterly Options Series expire. Therefore, all Short Term Option Daily Expirations would expire at the close of business on each of the next two Mondays, Tuesdays, Wednesdays, and Thursdays, respectively, that are business days and are not business days in which monthly options series or Quarterly Options Series expire. The Exchange believes that it is consistent with the Act to not permit two expirations on the same day in which a monthly options series or a Quarterly Options Series would expire similar to Monday and Wednesday SPY, QQQ, and IMW [sic] Expirations.
There are no material differences in the treatment of Wednesday SPY and QQQ expirations for Short Term Option Series as compared to the proposed Tuesday and Thursday SPY and QQQ Short Term Daily Expirations. Given the similarities between Wednesday SPY, QQQ, and IWM Expirations and the proposed Tuesday and Thursday SPY and QQQ Short Term Daily Expirations, the Exchange believes that applying the provisions in Policy .02 of Exchange Rule 404 that currently apply to Wednesday SPY, QQQ, and IWM Expirations to Tuesday and Thursday SPY and QQQ Short Term Daily Expirations is justified.
Finally, the Exchange represents that it has an adequate surveillance program in place to detect manipulative trading in the proposed Tuesday and Thursday SPY and QQQ Short Term Daily Expirations, in the same way that it monitors trading in the current Short Term Option Series and trading in Monday and Wednesday SPY, QQQ, and IWM Expirations. The Exchange also represents that it has the necessary systems capacity to support the new options series. Finally, the Exchange does not believe that any market disruptions will be encountered with the introduction of Tuesday and Thursday SPY and QQQ Short Term Daily Expirations.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
The proposal will provide an overall reduction in the number of Short Term Option Expirations to be listed on the Exchange. The Exchange believes this reduction will not impose an undue burden on competition, rather, it should encourage Market Makers to continue to deploy capital more efficiently and improve displayed market quality.
Similar to SPY, QQQ, and IWM Monday and Wednesday Expirations, the introduction of SPY and QQQ Tuesday and Thursday Short Term Daily Expirations does not impose an undue burden on competition. The Exchange believes that it will, among other things, expand hedging tools available to market participants and continue the reduction of the premium cost of buying protection. The Exchange believes that SPY and QQQ Tuesday and Thursday Short Term Daily Expirations will allow market participants to purchase SPY and QQQ options based on their timing as needed and allow them to tailor their investment and hedging needs more effectively.
The Exchange does not believe the proposal will impose any burden on inter-market competition, as nothing prevents the other options exchanges from proposing similar rules to list and trade Short Term Option Series with Tuesday and Thursday Short Term Daily Expirations. The Exchange notes that having Tuesday and Thursday SPY and QQQ expirations is not a novel proposal, as Wednesday SPY, QQQ, and IWM Expirations are currently listed on the Exchange.
Further, the Exchange does not believe the proposal will impose any burden on intra-market competition, as all market participants will be treated in the same manner under this proposal.
Written comments were neither solicited nor received.
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”)
The MSRB filed with the Commission a proposed rule change to amend Rule G-3, on professional qualification requirements, to delete references to certain temporary regulatory relief,
The MSRB has designated the proposed rule change as constituting a “non-controversial” rule change under Section 19(b)(3)(A)
The text of the proposed rule change is available on the MSRB's website at
In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The MSRB has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements.
In 2020, 2021 and 2022, the MSRB provided temporary regulatory relief to brokers, dealers, and municipal securities dealers (“dealers”) and municipal advisors (collectively “regulated entities”) in complying with certain obligations under MSRB rules in light of operational challenges due to the pandemic.
In response to the test center closures and in light of other operational challenges due to the pandemic, such as stay-at-home orders imposed by many states and the vast number of regulated entities operating under business continuity plans, the April 2020 relief extended the time to comply with certain professional qualification obligations, as follows:
• The date by which an individual functioning in the capacity as a principal before passing the applicable MSRB-owned principal qualification examination pursuant to Rule G-3(b)(ii)(D), G-3(b)(iv)(B)(4) and G-3(c)(ii)(D), as applicable, would be extended 120 days from the time that the MSRB announces that Prometric has resumed access to its testing centers; thereby, marking the expiration date of the temporary period.
• The date by which an individual must complete their Regulatory Element component of continuing education training,
• The date by which certain individuals are required to become qualified with the Municipal Advisor Principal Qualification Examination (“Series 54”) was extended until November 30, 2021. On October 11, 2019, the MSRB announced that a municipal advisor principal, as defined under Rule G-3(e),
• The Firm Element
• The annual needs analysis and the delivery of continuing education pursuant to Rule G-3(i)(i)(B) and G-3(i)(ii), as applicable, was deemed to have been timely completed for calendar year 2020, provided that the needs analysis and the delivery of continuing education were completed on or before March 31, 2021.
These modified obligations were reflected in Supplementary Material to Rule G-3. By their terms, Supplementary Material paragraphs .13, .15 and .16 have expired.
Prometric fully restored access to its test centers, thus permitting individuals seeking to take an MSRB-owned professional qualification examination to visit any Prometric test center in-person to take a principal qualification examination.
The 2022 Notice also announced that the temporary relief from Regulatory Element requirements for registered persons under Supplementary Material .14 of Rule G-3 would expire on August 29, 2022. Accordingly, persons designated under Supplementary Material .14 who are subject to the Regulatory Element must complete any Regulatory Element required under Rule G-3 (i)(i)(A)(1) within 120 days of August 29, 2022, or by December 27, 2022—recognizing the stated regulatory relief was not intended to provide regulatory relief to individuals who may need to complete Regulatory Element pursuant to the rule of another regulatory authority; and thereby, may have completed such continuing education requirements.
The MSRB intends to have the proposed rule change become operative on December 27, 2022. This aligns with the provision of allowing 120 days from August 29, 2022, the expiration date of the temporary regulatory relief under Supplementary Material .10 through .12 and .14 under Rule G-3, for individuals to meet their regulatory obligation. Thus, upon the operative date of December 27, 2022, the expired regulatory relief will be deleted from MSRB Rule G-3. The MSRB notes that, while the temporary regulatory relief related to Supplementary Material .10 through .12 and .14 expired on August 29, 2022, the MSRB will continue to monitor the impact of the ongoing pandemic and work in close coordination with other regulatory and governmental authorities, as needed, to address any additional pandemic-related issues that may arise in the future.
Section 15B(b)(2) of the Exchange Act,
Section 15B(b)(2)(C) of the Act
The proposed rule change to remove outdated references to the regulatory relief that is no longer applicable would ensure that rule provisions are clear, accurate, and streamlined, thereby facilitating compliance and promoting just and equitable principles of trade by clarifying the regulatory obligations of dealers and municipal advisors. The removal of expired and outdated references will promote just and equitable principles of trade by reducing the risk of potential confusion as to the current state of one or more regulatory obligations and ensuring that the existing rule provisions are accurate and understandable by all dealers and municipal advisors.
Section 15B(b)(2)(C) of the Exchange Act requires that MSRB rules not be designed to impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Exchange Act.
Additionally, Section 15B(b)(2)(L)(iv) of the Act requires that MSRB rules not impose a regulatory burden on small municipal advisors that is not necessary or appropriate in the public interest and for the protection of investors, municipal entities, and obligated persons, provided that there is robust protection of investors against fraud.
Written comments were neither solicited nor received on the proposed rule change.
Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's internet comment form (
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.
For the Commission, pursuant to delegated authority.
U.S. Small Business Administration.
Notice.
This is a notice of an Administrative declaration of a disaster for the State of Oklahoma dated 11/17/2022.
Issued on 11/17/2022.
Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205-6734.
Notice is hereby given that as a result of the Administrator's disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations.
The following areas have been determined to be adversely affected by the disaster:
The number assigned to this disaster for physical damage is 17708 C and for economic injury is 17709 0.
The States which received an EIDL Declaration # are Oklahoma, Arkansas, Texas.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes revisions of OMB-approved information collections.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or
Or you may submit your comments online through
The information collections below are pending at SSA. SSA will submit them to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than January 23, 2023. Individuals can obtain copies of the collection instruments by writing to the above email address.
1. Incorporation by Reference of Oral Findings of Fact and Rationale in Wholly Favorable Written Decisions (Bench Decision Regulation)—20 CFR 404.953 and 416.1453—0960-0694. If a judge makes a wholly favorable oral decision, including all the findings and rationale for the decision for a claimant of Title II or Title XVI payments, at an administrative appeals hearing, the judge sends a Notice of Decision (Form HA-82), as the records from the oral hearing preclude the need for a written decision. We call this the incorporation-by-reference process. In addition, as part of the information we include on the HA-82, if the involved parties want a record of the oral decision, they may submit a written request for these records. As explained to the respondent on the HA-82, SSA collects identifying information under the aegis of sections 20 CFR 404.953 and 416.1453 of the Code of Federal Regulations to determine how to send interested individuals written records of a favorable incorporation-by-reference oral decision made at an administrative review hearing. Since SSA did not create a form for the public to use to request a written record of the decision, the involved parties send SSA their contact information and reference the hearing for which they would like a record to the hearings office indicated on the HA-82. SSA employees collect this information only once. The respondents are applicants for Disability Insurance Benefits and Supplemental Security Income (SSI) payments based on disability, or their representatives as applicable, who receive a fully favorable oral decision under the regulations cited above, and who choose to request a copy of the records for this decision.
2. Request for Waiver of Special Veterans Benefits (SVB) Overpayment Recovery or Change in Repayment Rate—20 CFR 408.900-408.950—0960-0698. Title VIII of the Social Security Act (Act) requires SSA to pay a monthly benefit to qualified World War II veterans who reside outside the United States. When SSA notes an overpayment in this SVB, we inform the beneficiary. As part of the information we send, SSA explains how the beneficiary can request a waiver of recovery of the overpayment or a change in the repayment rate. SSA requests the respondent to submit Form SSA-2032-BK via mail to ensure SSA obtains the information necessary to establish whether the claimant meets the waiver of recovery provisions of the overpayment, and to determine the repayment rate if we do not waive repayment. Respondents are SVB beneficiaries who have overpayments on their Title VIII record and wish to file a claim for waiver of recovery or change in repayment rate.
3. Methods for Conducting Personal Conferences When Waiver of Recovery of a Title II or Title XVI Overpayment Cannot Be Approved—20 CFR 404.506 & 416.557—0960-0769. SSA conducts personal conferences when we cannot approve a waiver of recovery of a Title II or Title XVI overpayment. The Act and our regulatory citations require SSA to give overpaid Social Security beneficiaries and SSI recipients the right to request a waiver of recovery and
Notice of open meeting.
A meeting of the Department of State's Advisory Committee on International Law will take place on Monday, December 12, 2022, from 9:00 a.m. to 3:15 p.m. at the George Washington University Law School, Michael K. Young Faculty Conference Center, 716 20th St. NW, 5th Floor, Washington, DC. Acting Legal Adviser Richard Visek will chair the meeting, which will be open to the public up to the capacity of the meeting room. The meeting will include discussions on the future of the international rules-based order, a special tribunal on the crime of aggression in Ukraine, and developments in international law concerning state responsibility in outer space.
Members of the public who wish to attend should contact the Office of the Legal Adviser by December 8 at
Tara M. Rangchi, Executive Director, Advisory Committee on International Law, U.S. Department of State (telephone: (202) 485-6590, email:
Revolution Rail Holding Company, LLC (RRHC), a noncarrier, has filed a verified notice of exemption under 49 CFR 1150.31 to acquire from Saratoga and North Creek Railroad (SNCR) approximately 29.71 miles of rail line between milepost NC 0.0 at North Creek, N.Y., and its terminus at milepost NC 29.71 near the former Tahawus Mine, as well as approximately 2.97 miles of passing tracks and siding (the Line).
RRHC states that that it was the successful bidder in the March 2022 bankruptcy auction of SNCR's assets and it subsequently entered into an Amended Asset Purchase Agreement (the Agreement) with the Plan Administrator to purchase those assets, including the Line. (Verified Notice 5, 8-9, Ex. B.) RRHC further states that it is willing to assume the common carrier obligation and has partnered with SMS Rail Service, Inc. (SMS), a Class III rail carrier, to provide freight rail service on the Line if any service is requested in
The transaction may be consummated on or after December 7, 2022, the effective date of the exemption.
RRHC certifies that proposed transaction will not result in projected annual operating revenues exceeding $5 million and will not result in the creation of a Class I or Class II rail carrier.
If the verified notice contains false or misleading information, the exemption is void ab initio. Petitions to revoke the exemption under 49 U.S.C. 10502(d) may be filed at any time. The filing of a petition to revoke will not automatically stay the effectiveness of the exemption. Petitions for stay must be filed no later than November 30, 2022 (at least seven days before the exemption becomes effective).
All pleadings, referring to Docket No. FD 36612, must be filed with the Surface Transportation Board either via e-filing on the Board's website or in writing addressed to 395 E Street SW, Washington, DC 20423-0001. In addition, a copy of each pleading must be served on RRHC's representative, Daniel R. Elliott, GKG Law, P.C., 1050 Thomas Jefferson Street NW, Suite 500, Washington, DC 20007.
According to RRHC, this action is categorically excluded from environmental review under 49 CFR 1105.6 and from historic reporting requirements under 49 CFR 1105.8.
Board decisions and notices are available at
By the Board, Mai T. Dinh, Director, Office of Proceedings.
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently the Bureau of the Fiscal Service within the Department of the Treasury is soliciting comments concerning the Management of Federal Agency Disbursements.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments and requests for additional information to Bureau of the Fiscal Service, Bruce A. Sharp, Room #4006-A, P.O. Box 1328, Parkersburg, WV 26106-1328, or
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently the Bureau of the Fiscal Service within the Department of the Treasury is soliciting comments concerning the Application Form for U.S. Department of the Treasury Accountable Official Stored Value Card (SVC) Program.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments and requests for additional information to Bureau of the Fiscal Service, Bruce A. Sharp, Room #4006-A, P.O. Box 1328, Parkersburg, WV 26106-1328, or
This information is collected under the authority in: 31 U.S.C. 321, General Authority of the Secretary of the Treasury; Public Law 104-134, Debt Collection Improvement Act of 1996, as amended; Department of Defense Financial Management Regulation (DoDFMR) 7000.14-R, as amended; 5
The information on this form may be disclosed as generally permitted under 5 U.S.C. 552(a)(b) of the Privacy Act of 1974, as amended. It may be disclosed outside of the U.S. Department of the Treasury to its Fiscal and Financial Agents and their contractors involved in providing SVC services, or to the Department of Defense (DoD) for the purpose of administering the Treasury SVC programs. In addition, other Federal, State, or local government agencies that have identified a need to know may obtain this information for the purpose(s) as identified by Fiscal Service's Routine Uses as published in the
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently the Bureau of the Fiscal Service within the Department of the Treasury is soliciting comments concerning the Description of United States Savings Bonds Series HH/H and Description of United States Bonds/Notes.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments and requests for additional information to Bureau of the Fiscal Service, Bruce A. Sharp, Room #4006-A, P.O. Box 1328, Parkersburg, WV 26106-1328, or
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently the Bureau of the Fiscal Service within the Department of the Treasury is soliciting comments concerning the Application Forms for U.S. Department of the Treasury Stored Value Card (SVC) Program.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments and requests for additional information to Bureau of the Fiscal Service, Bruce A. Sharp, Room #4006-A, P.O. Box 1328, Parkersburg, WV 26106-1328, or
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently the Bureau of the Fiscal Service within the Department of the Treasury is soliciting comments concerning the Request to Reissue United States Savings Bonds.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments and requests for additional information to Bureau of the Fiscal Service, Bruce A. Sharp, Room #4006-A, P.O. Box 1328, Parkersburg, WV 26106-1328, or
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently the Bureau of the Fiscal Service within the Department of the Treasury is soliciting comments concerning the Direct Deposit, Go Direct, and Direct Express Sign-Up Forms.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments and requests for additional information to Bureau of the Fiscal Service, Bruce A. Sharp, Room #4006-A, P.O. Box 1328, Parkersburg, WV 26106-1328, or
Notice and request for comments.
The Department of the Treasury, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995. Currently the Bureau of the Fiscal Service within the Department of the Treasury is soliciting comments concerning the Electronic Funds Transfer (EFT) Market Research Study.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments and requests for additional information to Bureau of the Fiscal Service, Bruce A. Sharp, Room #4006-A, P.O. Box 1328, Parkersburg, WV 26106-1328, or
Office of Foreign Assets Control, Treasury.
Notice.
The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC's List of Specially Designated Nationals and Blocked Persons (SDN List) based on OFAC's determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
See
OFAC: Andrea Gacki, Director, tel.: 202-622-2490; Associate Director for Global Targeting, tel.: 202-622-2420; Assistant Director for Licensing, tel.: 202-622-2480; Assistant Director for Regulatory Affairs, tel.: 202-622-4855; or the Assistant Director for Sanctions Compliance & Evaluation, tel.: 202-622-2490.
The SDN List and additional information concerning OFAC sanctions programs are available on OFAC's website (
On November 17, 2022, OFAC determined that the property and interests in property subject to U.S. jurisdiction of the following persons are blocked under the relevant sanctions authority listed below.
1. HURTADO OLASCOAGA, Johnny (a.k.a. “EL FISH”; a.k.a. “EL MOJARRO”; a.k.a. “EL MUHADO”; a.k.a. “EL PESCADO”; a.k.a. “EL PEZ”; a.k.a. “PECADO PEZ”), Mexico; DOB 01 Mar 1973; POB Guerrero, Mexico; nationality Mexico; Gender Male;
2. HURTADO OLASCOAGA, Jose Alfredo (a.k.a. “EL FRESA”), Mexico; DOB 02 Sep 1984; POB Guerrero, Mexico; nationality Mexico; Gender Male; C.U.R.P. HUOA840902HGRRLL03 (Mexico) (individual) [ILLICIT-DRUGS-EO14059]. Sanctioned pursuant to section 1(a)(i) of the Order for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production.
1. LA NUEVA FAMILIA MICHOACANA (a.k.a. “LNFM”), Guerrero, Mexico; Michoacan, Mexico; Target Type Criminal Organization [ILLICIT-DRUGS-EO14059]. Sanctioned pursuant to section 1(a)(i) of the Order for having engaged in, or attempted to engage in, activities or transactions that have materially contributed to, or pose a significant risk of materially contributing to, the international proliferation of illicit drugs or their means of production.
Internal Revenue Service (IRS), Treasury.
Notice and request for comments.
The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995 (PRA). The IRS is soliciting comments concerning Form 2063, U.S. Departing Alien Income Tax Statement.
Written comments should be received on or before January 23, 2023 to be assured of consideration.
Direct all written comments to Andres Garcia, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224 or by email to
Requests for additional information or copies of the form and instructions should be directed to Sara Covington, (202) 317-5744, at Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet at
The following paragraph applies to all of the collections of information covered by this notice:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
Department of the Treasury (Treasury), Small Business Administration (SBA), Department of Commerce (Commerce), Department of Transportation (DOT), Department of Housing and Urban Development (HUD), and Department of Agriculture (USDA), (collectively, the Agencies).
Request for information; extension of comment period.
On October 4, 2022, representatives comprising the Interagency Community Investment Committee (ICIC)—the Department of the Treasury (Treasury), Small Business Administration (SBA), Department of Commerce (Commerce), Department of Transportation (DOT), Department of Housing and Urban Development (HUD), and Department of Agriculture (USDA), (collectively, the Agencies)—invited the public to comment on how the ICIC can promote economic conditions and systems that reduce racial disparities and produce stronger economic outcomes for all communities. Responses may be used to inform ICIC's future actions to improve the operations and delivery of federal community investment programs through stronger
The comment period for the notice published at 87 FR 60236 on October 4 2022, is extended by two weeks. Responses must be received by December 19, 2022 to be assured of consideration.
Please submit comments electronically through the Federal eRulemaking Portal:
Please contact Viraj Parikh, Phone Number: 202-923-5161, or
The Biden-Harris Administration is deploying trillions of dollars of public-sector investment authorized through programs under the American Rescue Plan Act of 2021 (ARP), Bipartisan Infrastructure Law (BIL), Consolidated Appropriations Act, 2021, the bipartisan CHIPS and Science Act (CHIPS) and the Inflation Reduction Act (IRA). These transformational investments present an opportunity to implement federal service delivery solutions that will support catalytic growth in historically underserved communities and address racial and geographic economic disparities.
On October 4, 2022, the Agencies published a Notice in the
1. Please describe examples of best practices and lessons learned from community investment projects that have layered a mix of public, private, and/or philanthropic capital. How could these projects have been more impactful or more cost effective to implement? In responding to this question, examples may address any of the four substantive areas of focus described in this RFI: (1) strengthening the capacity of community financial institutions; (2) supporting small businesses and entrepreneurship; (3) improving financial health and inclusion; and (4) investing in community facilities and infrastructure. In addition, a non-exhaustive list of example programs is provided in the appendix of this RFI as a reference.
2. From the examples provided in response to question 1, what specific changes could agencies consider to facilitate the layering of federal funds to attract greater private follow-on funding, as they implement new community investment programs and contemplate modifications to others?
3. As agencies are implementing new programs under recent CHIPS and IRA legislation, how can they best incorporate these lessons to streamline design and delivery, as well as ensure historically underserved communities benefit from federal funds?
4. Community financial institutions play a critical role in providing safe, affordable capital and financial services to historically underserved communities. How can federal agency coordination help build the capacity of these organizations to serve their communities?
5. What specific changes to federal credit or securitization programs could facilitate additional private investment in community financial institutions, and what are the most important existing limitations of these programs that may prohibit additional scale that could be achieved?
6. How can the Agencies incentivize or structure data collection and reporting to promote increased private sector and philanthropic investment in community financial institutions?
7. How can further alignment of and coordination between federal agencies in the four areas of substantive focus result in stronger outcomes with regards to reducing racial economic disparities, improving financial security and economic mobility, and generating broadly shared economic opportunity?
8. What data should the Agencies consider collecting to better understand and report the impact of community investments in reducing racial, gender, and geographic, or other economic disparities?
9. How can the Agencies collaborate on providing technical assistance, opportunities for peer-to-peer learning, and other non-financial resources to support the deployment of capital or implementation of community-serving projects in historically underserved communities?
10. Please describe best-in-class examples of how federal technical assistance has been best implemented through public-private partnerships.
Programs that support CDFIs, MDIs, credit unions, and community banks with assets less than $1 billion:
Programs that support small business access to capital (debt & equity), technical assistance for entrepreneurs, contracting:
Programs that support the creation of high-quality jobs and access to consumer credit, payments, and savings products:
Programs that support the preservation or development of affordable housing, community facilities, public transportation, and high-quality broadband:
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden, and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection revision should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20006, (202) 266-4688 or email
Section 116 of the law authorizes VA to establish a 5-year high technology pilot program for Veterans as an educational program provided by leading technology employers. Section 116 also requires that VA receive Employment Certification from School Certifying Officials (SCOs) and Veterans enrolled in the VET TEC pilot program.
Additionally, Section 116 of Public Law 115-48, and Section 8006 of Public Law 117-2, authorized VA to implement both the Veteran Employment through Technology Education Courses (VET TEC), and the Veteran Rapid Retraining Assistance Program (VRRAP), respectively. Both of these programs provide assistance to an eligible Veteran for the pursuit of a covered program of education. This form therefore allows Veterans who either participated in a VRRAP or VET TEC program to certify to VA that they have found employment in a field related to their program of education. The VET TEC Employment Certification Form 22-10201, which is also used as the employment certification for VRRAP, will allow student Veterans and SCOs to certify that a student Veteran has obtained meaningful employment with the skills acquired during their training program funded by those programs. VA continues to require approval of this information collection, so that VA can verify Veteran employment, as required by the law. VA would not comply with statute, if we do not collect the Veteran Employment Certification. The new laws require VA to certify and verify employment for student Veterans, which aligns with the skills acquired during their training program, funded by the VET TEC program offered by the Department of Veterans Affairs.
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995, this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to
Maribel Aponte, Office of Enterprise and Integration, Data Governance Analytics (008), 810 Vermont Ave. NW, Washington, DC 20006, (202) 266-4688 or email
An agency may not conduct or sponsor, and a person is not required to respond to a collection of information unless it displays a currently valid OMB control number. The
By direction of the Secretary.
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).
Final rule with comment period; final rules.
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).
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.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
For information on viewing public comments, see the beginning of the
Elise Barringer,
Advisory Panel on Hospital Outpatient Payment (HOP Panel), contact the HOP Panel mailbox at
Ambulatory Surgical Center (ASC) Payment System, contact Scott Talaga via email at
Ambulatory Surgical Center Quality Reporting (ASCQR) Program Administration, Validation, and Reconsideration Issues, contact Anita Bhatia via email at
Ambulatory Surgical Center Quality Reporting (ASCQR) Program Measures, contact Cyra Duncan via email at
Blood and Blood Products, contact Josh McFeeters via email at
Cancer Hospital Payments, contact Scott Talaga via email at
CMS Web Posting of the OPPS and ASC Payment Files, contact Chuck Braver via email at
Composite APCs (Multiple Imaging and Mental Health), via email at Mitali Dayal via email at
Comprehensive APCs (C-APCs), contact Mitali Dayal via email at
COVID-19 Final Rules, contact Elise Barringer via email at
Hospital Inpatient Quality Reporting Program—Administration Issues, contact Julia Venanzi at
Hospital Outpatient Quality Reporting (OQR) Program Administration, Validation, and Reconsideration Issues, contact Shaili Patel via email
Hospital Outpatient Quality Reporting (OQR) Program Measures, contact Janis Grady via email
Hospital Outpatient Visits (Emergency Department Visits and Critical Care Visits), contact Elise Barringer via email at
Inpatient Only (IPO) Procedures List, contact Abigail Cesnik via email at
Mental Health Services Furnished Remotely by Hospital Staff to Beneficiaries in Their Homes, contact Emily Yoder via email at
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
New Technology Intraocular Lenses (NTIOLs), contact Scott Talaga via email at
No Cost/Full Credit and Partial Credit Devices, contact Scott Talaga via email at
OPPS Brachytherapy, contact Scott Talaga via email at
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
OPPS Drugs, Radiopharmaceuticals, Biologicals, and Biosimilar Products, contact Josh McFeeters via email at
OPPS New Technology Procedures/Services, contact the New Technology APC mailbox at
OPPS Packaged Items/Services, contact Mitali Dayal via email at
OPPS Pass-Through Devices, contact the Device Pass-Through mailbox at
OPPS Status Indicators (SI) and Comment Indicators (CI), contact Marina Kushnirova via email at
Organ Acquisition Payment Policies, contact Katie Lucas via email at
Outpatient Department Prior Authorization Process, contact Yuliya Cook via email at
Overall Hospital Quality Star Rating, contact Tyson Nakashima via email at
Partial Hospitalization Program (PHP) and Community Mental Health Center (CMHC) Issues, contact the PHP Payment Policy Mailbox at
Request for Information on Use of CMS Data to Drive Competition in Healthcare Marketplaces, contact Terri Postma via email at
Rural Emergency Hospital and Critical Access Hospital Conditions of Participation (CoP) Issues, contact Kianna Banks at
Rural Emergency Hospital Provider Enrollment, contact Frank Whelan via email at
Rural Emergency Hospital Quality Reporting (REHQR) Program Issues, contact Anita Bhatia via email at
Rural Emergency Hospital (REH) Physician Self-Referral Law Update Issues, contact Lisa O. Wilson via email at
Skin Substitutes, contact Josh McFeeters via email at
Use of the Medicare Outpatient Observation Notice by REHs, contact Nishamarie Sherry via email at
All Other Issues Related to Hospital Outpatient Payments Not Previously Identified, contact the OPPS mailbox at
All Other Issues Related to the Ambulatory Surgical Center Payments Not Previously Identified, contact the ASC mailbox at
In the past, a majority of the Addenda referred to in our OPPS/ASC proposed and final rules were published in the
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.
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).
•
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.
•
•
•
•
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.
•
•
•
•
•
•
•
•
•
•
•
•
•
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.
•
•
•
•
•
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.
•
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.
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
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.
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.
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.
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.
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.
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
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.
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 § 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.
On April 7, 2000, we published in the
Since initially implementing the OPPS, we have published final rules in the
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.
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,
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
• 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
We received approximately 1,599 timely pieces of correspondence on the CY 2023 OPPS/ASC proposed rule that appeared in the
We received approximately 13 timely pieces of correspondence on the CY 2022 OPPS/ASC final rule with comment period that appeared in the
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.
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:
Addendum N to the CY 2023 OPPS/ASC proposed rule (which is available via the internet on the CMS website at:
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:
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.
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:
• 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.
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.
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.
In this section of this final rule with comment period, we discuss the use of claims to calculate the OPPS payment
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:
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:
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
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.
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
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
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.
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
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
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
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):
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”.
• 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
Items included in the packaged payment provided in conjunction with the primary service also include all drugs, biologicals, and radiopharmaceuticals, regardless of cost, except those drugs with pass-through payment status and SADs, unless they function as packaged supplies (78 FR 74868 through 74869 and 74909 and 79 FR 66800). We refer readers to Section 50.2M, Chapter 15, of the Medicare Benefit Policy Manual for a description of our policy on SADs treated as hospital outpatient supplies, including lists of SADs that function as supplies and those that do not function as supplies.
We define each hospital outpatient claim reporting a single unit of a single primary service assigned to status indicator “J1” as a single “J1” unit procedure claim (78 FR 74871 and 79 FR 66801). Line item charges for services included on the C-APC claim are converted to line item costs, which are then summed to develop the estimated APC costs. These claims are then assigned one unit of the service with status indicator “J1” and later used to develop the geometric mean costs for the C-APC relative payment weights. (We note that we use the term “comprehensive” to describe the geometric mean cost of a claim reporting “J1” service(s) or the geometric mean cost of a C-APC, inclusive of all of the items and services included in the C-APC service payment bundle.) Charges for services that would otherwise be separately payable are added to the charges for the primary service. This process differs from our traditional cost accounting methodology only in that all such services on the claim are packaged (except certain services as described above). We apply our standard data trims, which exclude claims with extremely high primary units or extreme costs.
The comprehensive geometric mean costs are used to establish resource similarity and, along with clinical similarity, dictate the assignment of the primary services to the C-APCs. We establish a ranking of each primary service (single unit only) to be assigned to status indicator “J1” according to its comprehensive geometric mean costs. For the minority of claims reporting more than one primary service assigned to status indicator “J1” or units thereof, we identify one “J1” service as the primary service for the claim based on our cost-based ranking of primary services. We then assign these multiple “J1” procedure claims to the C-APC to which the service designated as the primary service is assigned. If the reported “J1” services on a claim map to different C-APCs, we designate the “J1” service assigned to the C-APC with the highest comprehensive geometric mean cost as the primary service for that claim. If the reported multiple “J1” services on a claim map to the same C-APC, we designate the most costly service (at the HCPCS code level) as the primary service for that claim. This process results in initial assignments of claims for the primary services assigned to status indicator “J1” to the most appropriate C-APCs based on both single and multiple procedure claims reporting these services and clinical and resource homogeneity.
• 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
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.
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
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.
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.
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.
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
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.
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”.
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.
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.
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.
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.
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.
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
• 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
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.
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
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.
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.
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.
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
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:
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
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.
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
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
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.
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.
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.
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.
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 (
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 § 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:
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,
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.
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.
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
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:
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
We no longer publish a table in the
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 § 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.
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.
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 § 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.
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.
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 § 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
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.
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
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:
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
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).
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.
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.
The national unadjusted payment rate is the is payment rate for most APC's before accounting for the wage index
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.
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.
The formula below is a mathematical representation of Step 4 and adjusts the
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.
The formula below is a mathematical representation of Step 6 and applies the rural adjustment for rural SCHs.
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.
We did not receive any public comments on our proposal and therefore, we are finalizing it as proposed.
Section 1833(t)(3)(B) of the Act requires the Secretary to set rules for determining the unadjusted copayment amounts to be paid by beneficiaries for covered OPD services. Section 1833(t)(8)(C)(ii) of the Act specifies that the Secretary must reduce the national unadjusted copayment amount for a covered OPD service (or group of such services) furnished in a year in a manner so that the effective copayment rate (determined on a national unadjusted basis) for that service in the year does not exceed a specified percentage. As specified in section 1833(t)(8)(C)(ii)(V) of the Act, the effective copayment rate for a covered OPD service paid under the OPPS in CY 2006, and in CYs thereafter, shall not exceed 40 percent of the APC payment rate.
Section 1833(t)(3)(B)(ii) of the Act provides that, for a covered OPD service (or group of such services) furnished in a year, the national unadjusted copayment amount cannot be less than 20 percent of the OPD fee schedule amount. However, section 1833(t)(8)(C)(i) of the Act limits the amount of beneficiary copayment that may be collected for a procedure (including items such as drugs and biologicals) performed in a year to the amount of the inpatient hospital deductible for that year.
Section 4104 of the Affordable Care Act eliminated the Medicare Part B coinsurance for preventive services furnished on and after January 1, 2011, that meet certain requirements, including flexible sigmoidoscopies and screening colonoscopies, and waived the Part B deductible for screening colonoscopies that become diagnostic during the procedure. For a discussion of the changes made by the Affordable Care Act with regard to copayments for preventive services furnished on and after January 1, 2011, we refer readers to section XII.B of the CY 2011 OPPS/ASC final rule with comment period (75 FR 72013).
Section 122 of the Consolidated Appropriations Act (CAA) of 2021 (Pub. L. 116-260), Waiving Medicare Coinsurance for Certain Colorectal Cancer Screening Tests, amends section 1833(a) of the Act to offer a special coinsurance rule for screening flexible sigmoidoscopies and screening colonoscopies, regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure, that is furnished in connection with, as a result of, and in the same clinical encounter as the colorectal cancer screening test. We refer readers to section X.B, “Changes to Beneficiary Coinsurance for Certain Colorectal Cancer Screening Tests,” of the CY 2022 OPPS/ASC final rule with comment period for the full discussion of this policy (86 FR 63740 through 63743). Under the regulation at 42 CFR 410.152(l)(5)(i)(B), the Medicare Part B payment percentage for colorectal cancer screening tests described in the regulation at § 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.
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
• If no codes are added to or removed from an APC and, after recalibration of its relative payment weight, the new payment rate is
• 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
• 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).
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.
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.
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.
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.
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);
• 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.
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.
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
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.
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.
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
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.
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
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.
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
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:
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
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:
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:
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:
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
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
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
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.
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.
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® 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® II procedure and the Argus® 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® 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® 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® II device is no longer available in the marketplace and that outpatient hospital providers are no longer performing the Argus® 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® II device and the Argus® II implantation procedure to indicate that Medicare payment is no longer available for the device and the implementation procedure as the Argus® 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
We did not receive any public comments on our proposal and, therefore, we are finalizing our proposal without modification.
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®) 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.
Interested parties, including the manufacturer of Luxturna®, recommended CPT code 67036 (Vitrectomy, mechanical, pars plana approach) for the administration of the gene therapy.
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
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).
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.
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.
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.
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
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.
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.
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.
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.
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
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).
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.
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.
CPT code 0686T (Histotripsy (
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.
CPT code 0648T (Quantitative magnetic resonance for analysis of tissue composition (
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 (
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
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.
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
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.
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.
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
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 (
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.
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
The CardiAMP cell therapy IDE studies are two randomized, double-blinded, controlled IDE studies: the CardiAMP Cell Therapy Chronic Myocardial Ischemia Trial
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
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
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.
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).
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:
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,
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.
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.
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.
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.”
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
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.
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.
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
Refer to Table 36 for the code descriptor, APC assignment, status indicator assignment, and payment indicator assignment for CPT code 68841 for CY 2023.
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 § 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
For the July 2020 update, the AMA's CPT Editorial Panel established three CPT codes to describe the CUSTOMFLEX® ARTIFICIALIRIS device implantation procedure. The long descriptors for the codes are listed below.
•
•
•
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® 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® 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® 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.
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.
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
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.
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.
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.
•
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.
•
•
•
•
•
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:
•
•
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
• 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.
In addition, we remind the commenters that requests for changes to the current BMM definition should be directed to CMS as described in § 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
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.
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.
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 (
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.
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.
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.
•
•
•
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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:
•
•
•
•
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.
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.
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.
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.
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.
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.
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.
After consideration of the public comment, we are finalizing our proposal without modification to continue to
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
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.
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.
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
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
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
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.
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.
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.
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.
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.
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,
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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
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.
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.
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.
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:
•
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
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.
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.
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,
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.
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.
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.
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 (
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 (
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.
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:
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.
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.
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.
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.
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 (
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.
For CY 2023, we proposed to continue to assign HCPCS code C9781 (Arthroscopy, shoulder, surgical; with implantation of subacromial spacer (
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.
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.
•
•
•
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.
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.
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.
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.
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)).
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.
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.
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).
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.
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.
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.
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
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:
•
•
•
•
•
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.
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.
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).
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.
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.
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.
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.
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
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.
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.
For CY 2023, we proposed to assign CPT code 19281 (Placement of breast localization device(s) (
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
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.
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).
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.
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.
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.
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)).
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.
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 (
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.
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:
•
•
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.
HCPCS code C9780 (Insertion of central venous catheter through central venous occlusion via inferior and superior approaches (
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.
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.
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.
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.
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.
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.
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.
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
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.
The following summaries describe the public comments we received on our proposal.
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.
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 (
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 (
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.
•
•
•
•
•
•
•
•
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.
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.
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.
The AquaBeam® 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® 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.
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
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 (
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.
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.
The intent of transitional device pass-through payment, as implemented at § 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 § 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 § 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.
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
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
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
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.
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.
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 § 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 § 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 § 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 § 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 § 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
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 § 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 § 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:
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 aprevo
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:
Discussions of the applications we received by the March 1, 2022 deadline are included below.
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.
Carlsmed, Inc. submitted an application for a new device category for transitional pass-through payment status for aprevo
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
According to the applicant, aprevo
The applicant asserted that there are no other devices in the market like aprevo
Aprevo
With respect to the newness criterion at § 419.66(b)(1), aprevo
We did not receive public comments regarding whether aprevo
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, aprevo
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 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 aprevo
We stated in the CY 2023 OPPS/ASC proposed rule that we had not identified an existing pass-through payment category that describes aprevo
We did not receive any comments on whether aprevo
The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 419.66(d). Section 419.66(d) includes three cost significance criteria that must each be met. The applicant provided the following information in support of the cost significance requirements. The applicant stated that aprevo
To meet the cost criterion for device pass-through payment status, a device must pass all three tests of the cost criterion for at least one APC. As we explained in the CY 2005 OPPS final rule with comment period (69 FR 65775), we generally use the lowest APC payment rate applicable for use with the nominated device when we assess whether a device meets the cost significance criterion, thus increasing the probability the device will pass the cost significance test. For our calculations, we used APC 5115, which had a CY 2021 payment rate of $12,314.76 at the time the application was received. Beginning in CY 2017, we calculate the device offset amount at the HCPCS/CPT code level instead of the APC level (81 FR 79657). HCPCS code 22633 had a device offset amount of $6,851.93 at the time the application was received. According to the applicant, the cost of aprevo
Section 419.66(d)(1), the first cost significance requirement, provides that the estimated average reasonable cost of devices in the category must exceed 25 percent of the applicable APC payment amount for the service related to the category of devices. The estimated average reasonable cost of $26,000 for aprevo
The second cost significance requirement, at § 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 aprevo
The third cost significance requirement, at § 419.66(d)(3), provides that the difference between the estimated average reasonable cost of the devices in the category and the portion of the APC payment amount for the device must exceed 10 percent of the APC payment amount for the related service. The difference between the estimated average reasonable cost of $26,000 for aprevo
We solicited public comment on whether aprevo
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 aprevo
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 aprevo
Aprevo
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 aprevo
Second, the applicant asserts that the inclusion of CPT code 22612 in the
MicroTransponder, Inc. submitted an application for a new device category for transitional pass-through payment status for the ViviStim® Paired VNS System (Vivistim® System) for CY 2023. Per the applicant, the Vivistim® 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® 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.
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 § 419.66(b)(1), Vivistim® 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® 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® 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® System meets the newness criterion.
With respect to the eligibility criterion at § 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 § 419.66(b)(3). The applicant claimed that Vivistim® System meets the device eligibility requirements of § 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
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 § 419.66(b)(4), the applicant again clarified that existence of a reusable clinical user interface is neither unique to the Vivistim® System nor negates eligibility under § 419.66(b)(4). The applicant stated the Vivistim® System external paired stimulation controller is provided at no cost under a loaner agreement, where ownership of the device is retained by the manufacturer
Based on the clarification provided by that applicant that they retain and maintain the Vivistim® 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 § 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® System device meets the eligibility requirements at § 419.66(b)(4).
Based on this assessment we have determined that the Vivistim® System meets the eligibility criterion at § 419.66(b)(3) and (4).
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 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® System, listed in the Table 54.
Per the applicant, the codes in Table 54 do not encompass the Vivistim® 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® 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® System device is not encompassed by these existing device categories.
Per the applicant, the Vivistim® 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® 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® System (LivaNova, PLC) has different device components and therapy delivery than the Vivistim® System. Per the applicant, the LivaNova VNS Therapy® System implantable neurostimulators differ from the Vivistim® System in a number of ways. Specifically, according to the applicant, VNS Therapy® System neurostimulators are “always on” and send periodic pulses to deliver therapy over the life of the device, whereas the Vivistim® System is actively paired with rehabilitation movements by a clinician to deliver therapy. In addition, the applicant stated the VNS Therapy® System is used to treat neurological disorders such as epilepsy and treatment resistant depression, whereas the Vivistim® System is used to treat upper limb motor deficits in ischemic stroke survivors. The applicant concluded C1767 does not encompass the Vivistim® 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® 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® Spinal Cord Stimulator (Nevro Corp.). The applicant stated the Vivistim® System is not a “high-frequency” stimulator as described by C1822. The applicant stated the paired stimulation using the Vivistim® System is delivered at a maximum of 30 Hz, whereas spinal cord stimulation using the HF10® (Nevro Corp.) is delivered at 10 kHz. The applicant concluded C1822 does not encompass the Vivistim® 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 remedē System® Phrenic Nerve Stimulator (Respicardia, Inc.). This device category code does not encompass the Vivistim® System. According to the applicant, the stimulation lead included in the Vivistim® System is placed onto the vagus nerve and is not transvenously placed to stimulate the phrenic nerve. In addition, the applicant asserted the Vivistim® System does not include a sensing lead. The applicant concluded C1823 does not encompass the Vivistim® 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
The applicant has asserted that the Vivistim® 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® 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® 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® 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® System may be similar to the devices currently described by C1767, and therefore the Vivistim® System may also be appropriately described by C1767. We solicited public comment on whether the Vivistim® System meets the device category criterion.
In response to our concern that IPG of the Vivistim® System can also be patient-engaged with a magnetic card, allowing the patient to continue therapy at home using the Vivistim® 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® System is the external paired stimulation controller, not the patient-engaged features of the device. As such, the applicant asserted the Vivistim® System meets the first criterion for establishing a new device category at § 419.66(c)(1) because there are no existing categories established for device TPT that describe the Vivistim® System.
Based on this information, we have determined that Vivistim® System meets the first eligibility criterion at § 419.66(c)(1).
The second criterion for establishing a device category, at § 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
The third criterion for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 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® 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 (
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® 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® 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) × 100 = 122.26 percent). Therefore, we stated that we believe Vivistim® System meets the first cost significance requirement.
The second cost significance requirement, at § 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® 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) × 100 = 142.65 percent). Therefore, we stated that we believe that Vivistim® System meets the second cost significance requirement.
The third cost significance requirement, at § 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® 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) × 100 = 36.55 percent). Therefore, we stated that we believe that Vivistim® System meets the third cost significance requirement.
We solicited public comment on whether Vivistim® 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 § 419.66(d). Based on our findings from the first, second, and third cost significant tests, we believe that the Vivistim® System meets the cost significance criteria specified at § 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® System meets the requirements for device pass-through payment status described at § 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 § 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® System meets those other criteria. Therefore, effective beginning January 1, 2023, we are finalizing approval for device pass-through payment status for Vivistim® 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.
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
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 § 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 § 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 § 419.66(b)(1).
With respect to the eligibility criterion at § 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 § 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 § 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 § 419.66(b).
We did not receive public comments regarding whether the BrainScope TBI meets the eligibility criteria at § 419.66(b)(3) or (4). With respect to the eligibility criterion at § 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 § 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 § 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.
Elucent Medical, Inc. submitted an application for a new device category for transitional pass-through payment status for CY 2023 for the NavSlim
According to the FDA 510(k) Summary (K183400) provided by the applicant,
The applicant stated that there are two types of Navigators: (1) the NavSlim
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
With respect to the newness criterion at § 419.66(b)(1), on March 22, 2019, the applicant received 510(k) clearance from FDA to market the EnVisio
With respect to the eligibility criterion at § 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 § 419.66(b)(3).
In addition, the applicant stated that the Navigators meet eligibility requirements of § 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.
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 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 (
The second criterion for establishing a device category, at § 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
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 EnVisio
The applicant provided a second article consisting of a clinical paper from the Moffitt Cancer Center that, per the applicant, is pending publication.
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®, 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® 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® provides improved patient comfort and eliminates the need to perform the surgery on the same day as the localization procedure.
Finally, the authors discussed localization using the SmartClip
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® (radar reflector localizer). The authors concluded that the SmartClip
In addition, the applicant provided two physician case reports, each describing the use of the EnVisio
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%.
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,
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
We solicited public comments on whether the Navigators meet the substantial clinical improvement criterion.
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 SmartClip
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 SmartClip
Some commenters described additional technical and operational advantages to using the Navigators and SmartClip
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 SmartClip
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 SmartClip
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
The applicant also noted other clinical impacts of the Navigators and SmartClip
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.
Elucent Medical, Inc. submitted an application for a new device category for transitional pass-through payment status for CY 2023 for the SmartClip
The applicant stated that the SmartClip
According to the applicant, up to three SmartClips
The applicant further asserted that the SmartClip
With respect to the newness criterion at § 419.66(b)(1), on June 4, 2018, the applicant received 510(k) clearance from FDA to market the SmartClip
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the SmartClip
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 419.66(c)(1), provides that CMS determines that a device to be included in the category is not appropriately described by any of the existing categories or by any category previously in effect, and was not being paid for as an outpatient service as of December 31, 1996. The applicant stated that it was not aware of an existing pass-through payment category that describes the SmartClip
The applicant identified three devices or device categories that it believes are most closely related to the SmartClip
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.
We solicited public comments on whether the SmartClip
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 SmartClip
In addition, we agree with the commenter who noted that the SmartClip
After consideration of the public comments we received, we believe that there is not a current or previously
The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be included in the category has demonstrated that it will substantially improve the diagnosis or treatment of an illness or injury or improve the functioning of a malformed body part compared to the benefits of a device or devices in a previously established category or other available treatment; or (ii) for devices for which pass-through status will begin on or after January 1, 2020, as an alternative to the substantial clinical improvement criterion, the device is part of the FDA's Breakthrough Devices Program and has received FDA marketing authorization for the indication covered by the Breakthrough Device designation.
The applicant claimed that the use of the SmartClip
In support of the claim that use of the SmartClip
The applicant provided a second article consisting of a clinical paper from the Moffitt Cancer Center that, per the applicant, is pending publication.
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®, 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® 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® provides improved patient comfort and eliminates the need to perform the surgery on the same day as the localization procedure.
Finally, the authors discussed localization using the SmartClip
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® (radar reflector localizer). The authors concluded that the SmartClip
In addition, the applicant provided three physician case reports (two by surgeons and one by radiologists), each describing the use of the SmartClip
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.
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
In addition, we noted that the second article was an undated,
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 SmartClip
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 SmartClip
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.
Furthermore, a commenter noted that, in their anecdotal experience, the use of the Navigators and SmartClip
Some commenters described additional technical and operational advantages to using the Navigators and SmartClip
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 SmartClip
According to this commenter, a second important benefit the SmartClip
Third, the commenter stated that in his experience, the SmartClip
Fourth, the commenter noted that if there is migration of a localizing clip, a second clip must be placed, and asserted that because the SmartClip
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 SmartClip
This commenter also described some technical advantages of the SmartClip
A few other commenters described clinical outcome data from their experience with the Navigators and SmartClip
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 SmartClip
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
The applicant also noted other clinical impacts of the Navigators and SmartClip
In response to our concern that the applicant had not provided conclusive evidence that use of the SmartClip
In response to our concern that the applicant had not provided conclusive evidence that use of the SmartClip
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.
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.
Saluda Medical Inc. submitted an application for a new device category for transitional pass-through payment status for the Evoke® Spinal Cord Stimulation (SCS) System for CY 2023. The applicant described the Evoke® 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® 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® 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 (
According to the applicant, the Evoke® SCS System is comprised of 5 implanted and 12 external components. The applicant identified the following five implanted components of the Evoke® 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 (
According to the applicant, the Evoke® 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® SCS System measures ECAPs and adjusts the next stimulation accordingly as follows: (1) the Evoke® 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® 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 (
With respect to the newness criterion at § 419.66(b)(1), on February 28, 2022, the Evoke® 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® 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® SCS System meets the newness criterion.
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the use of the Evoke® 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® SCS System (referenced previously) are not implanted in a patient and do not come in contact with human tissue as required by § 419.66(b)(3). The applicant did not indicate whether the Evoke® SCS System meets the device eligibility requirements of § 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 (
The criteria for establishing new device categories are specified at
A competitor asserted that the Evoke® 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 AdaptiveStim
The second criterion for establishing a device category, at § 419.66(c)(2), provides that CMS determines either of the following: (i) that a device to be
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.
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.
Regarding the applicant's first claim that the closed-loop stimulation of the Evoke® 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
Regarding the applicant's second claim that the closed-loop stimulation of the Evoke® 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® 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® 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® 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® 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).
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® 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.
The third article provided by the applicant reported the results from the Avalon study, a prospective, multicenter, single-arm study of the Evoke® SCS System.
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.
Based upon the evidence presented by the applicant, we noted the following concerns regarding whether the Evoke® SCS System met the substantial clinical improvement criterion. First, we noted that none of the sources provided by the applicant compared the Evoke® 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® 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® SCS System itself, additional information comparing the Evoke® SCS System to existing spinal cord stimulators would help inform our assessment of substantial clinical improvement. While the applicant asserted that the Evoke® 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® SCS System meets the substantial clinical improvement criterion.
Many commenters expressed the opinion that the Evoke® 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®, and therefore served as an effective comparator between the Evoke® SCS System closed-loop stimulation mode and traditional open-loop stimulation.
Many commenters noted that the use of the same Evoke® 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® 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® SCS System could measure the neural response in both groups by quantifying the ECAPs, using the Evoke® SCS System in both groups allowed for a more direct comparison of spinal cord activation.
Many commenters noted that the use of the Evoke® 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.
The applicant explained that the Evoke® 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® RCT was powered adequately (
The third criteria for establishing a device category, at § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 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® 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® SCS system is $37,000. We note that the device cost provided by the applicant encompasses the entire Evoke® SCS. However, as previously discussed, the external components of the Evoke® SCS (the surgical accessories, clinical interface, clinical system transceiver, pocket console and chargers) may not meet the criteria required under § 419.66(b)(3),
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® 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) × 100 = 125.7 percent). Therefore, we stated that we believe the Evoke® SCS System meets the first cost significance requirement.
The second cost significance requirement, at § 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® 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) · 100 = 152.8 percent). Therefore, we stated that we believe that the Evoke® SCS System meets the second cost significance requirement.
The third cost significance requirement, at § 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® 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) × 100 = 43.4 percent). Therefore, we stated that we believe that the Evoke® SCS System meet the third cost significance requirement.
We noted a concern regarding whether the Evoke® SCS System meets all the cost criteria. Specifically, as previously discussed, the external components of the Evoke® SCS may not meet the criteria required under § 419.66(b)(3),
We invited public comment on whether the Evoke® SCS System meets the device pass-through payment criteria discussed in this section, including 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® SCS System meets the criteria for device pass-through. Therefore, we are finalizing approval for device passthrough payment status for the Evoke® SCS System effective beginning January 1, 2023.
Neptune Medical, Inc. submitted an application for a new device category for transitional pass-through payment status for the Pathfinder® Endoscope Overtube (the Pathfinder®) for CY 2023. According to the applicant, the Pathfinder® 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® 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 § 419.66(b)(1), on August 20, 2019, the applicant received 510(k) clearance from FDA for the Pathfinder® 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® 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® meets the newness criterion.
We did not receive public comments in regard to whether the Pathfinder® meets the eligibility criterion at § 419.66(b)(1). Because we received the Pathfinder® 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® meets the newness criterion.
With respect to the eligibility criterion at § 419.66(b)(3), according to the applicant, the Pathfinder® 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® meets the device eligibility requirements of § 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® meets the eligibility criteria at § 419.66(b).
We did not receive public comments in regard to whether the Pathfinder® meets the eligibility criteria at § 419.66(b)(3) or (4). Based on our review of the application, we agree with the applicant that the Pathfinder® meets the criterion of § 419.66(b).
The criterion for establishing new device categories are specified at § 419.66(c). The first criterion, at § 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® is unique in its ability to do this using a proprietary technology called Dynamic Rigidization
Upon review, it did not appear that there are any existing pass-through payment categories that might apply to the Pathfinder®. We solicited public comment on whether the Pathfinder® meets the device category criterion.
We did not receive public comments in regard to whether the Pathfinder® meets the eligibility criterion at § 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®. Therefore, we agree with the applicant that the Pathfinder® meets the criterion of § 419.66(c)(1).
The second criterion for establishing a device category, at § 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® represents a substantial clinical improvement over existing technologies. With respect to this criterion, the applicant submitted studies that examined the impact of the Pathfinder® 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® 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® minimizes scope looping
The applicant provided a second article to support the claims that the Pathfinder® 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.
The applicant submitted a third article,
A fourth article
The applicant provided a fifth article
A sixth article
A seventh article
An eighth article
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,
The applicant supplied a tenth article
In support of its claim that the Pathfinder® enables endoscopic procedure in patients with altered anatomy, the applicant submitted an eleventh article
While the applicant provided articles that describe the clinical use of the Pathfinder® 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.
Furthermore, with respect to the two articles
We invited public comments on whether the Pathfinder® meets the substantial clinical improvement criterion.
After our review of the device pass through application, we are not approving the Pathfinder® 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® does not meet the substantial clinical improvement criterion, we are not evaluating whether the device meets the cost criterion.
STERIS submitted an application for a new device category for transitional pass-through payment status for the Uretero1 for CY 2023. The applicant states that the Uretero1 is a sterile, single-use, disposable digital flexible ureteroscope. According to the applicant, the Uretero1
Per the applicant, the single use ureteroscope, the Uretero1, consists of: (1) handle, to hold scope (made of polycarbonate, and has no patient contact); (2) articulation lever, an angulated distal tip (polycarbonate 10 percent glass filled, and has no patient contact); (3) handle button, a button to take pictures, video, and zoom live image (made of silicone, and has no patient contact); (4) accessory Port with port cover to prevent backflow during procedures, pass instruments (Makrolon 2458, Indirect/limited patient contact); (5) irrigation port, for fluid access (Makrolon 2458, which has indirect or limited patient contact); (6) flexible shaft (Pebax, made of polyurethane, and has patient contact); (7) shaft strain relief (Santoprene and has contact with limited mucosal membrane); (8) bending/articulation section, which bends the tip of the scope to move the camera (made of stainless-steel compression coils and pull cables and has no patient contact); (9) distal tip, (ABS, and has patient contact); (10) instrument channel (PFA and has indirect and limited patient contact); (11) illumination fiber (made of polymethyl methacrylate (PMMA)/fluorinated polymer and has no patient contact); and (12) the camera (consists of glass and has limited mucosal membrane patient contact), and connector cables and plugs, which have no patient contact.
The Uretero1
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 § 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 § 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 § 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 § 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
We did not receive any comments on whether the Uretero1 meets the eligibility criteria at § 419.66(b)(3) or (4). We agree with the applicant that the Uretero1 device meets the criteria of § 419.66(b)(3) and (4).
The criteria for establishing new device categories are specified at § 419.66(c). The first criterion, at § 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 (
We did not receive any comments on whether the Uretero1 meets the criterion for establishing new device categories specified at § 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 § 419.66(c)(1).
The second criterion for establishing a device category, at § 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.
Another article included in the literature review by Ofstead et al.
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.
To support its second claim that the Uretero1 reduces risk of contamination, the applicant again cited the literature review by Ofstead et al.
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.
The applicant referred to a study by Bozzini et al.
The applicant referred to an article in
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 (
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
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 § 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 § 419.66(c)(3), requires us to determine that the cost of the device is not insignificant, as described in § 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.
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) × 100 = 48.76 percent). Therefore, we believe the Uretero1 meets the first cost significance requirement.
The second cost significance requirement, at § 419.66(d)(2), provides
The third cost significance requirement, at § 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) × 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 § 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 § 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.
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.
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 § 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,
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.
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.
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
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.
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.
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.
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
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.
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).
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
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).
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.
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 §§ 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
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
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.
• 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).
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
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
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.
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.
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
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.
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).
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:
The pass-through application and review process for drugs and biologicals is described on our website at:
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.
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
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).
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).
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.
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).
Section 1833(t)(6)(D)(i) of the Act sets the amount of pass-through payment for pass-through drugs and biologicals (the
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.
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
We proposed to continue to post annually on our website at:
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.
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)
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,
• 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,
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 (§ 419.2(b)(4));
• Intraoperative items and services (§ 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) (§ 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) (§ 419.2(b)(16)).
The policy at § 419.2(b)(16) is broader than that at § 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 § 419.2(b)(15) is large and includes diagnostic radiopharmaceuticals, contrast agents, stress agents, and some other products. The category described by § 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).
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.
We welcome ongoing dialogue and engagement from stakeholders regarding suggestions for payment changes for consideration in future rulemaking.
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
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.
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—
Section 1833(t)(14)(A)(iii) of the Act requires that payment for SCODs in CY
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.
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.
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
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
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.
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.
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
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.
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).
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).
For CY 2022, we provided payment for blood clotting factors under the same methodology as other nonpass-through separately payable drugs and biologicals
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:
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.
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.
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.
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.
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
This policy has been the subject of significant litigation, including the Supreme Court's recent decision in
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
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
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
On July 10, 2019, the district court entered final judgment.
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
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.”
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.
We received the following public comments in response to our comment solicitation on potential remedies affecting calendar years 2018 through 2022.
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.
As discussed above, given when the Supreme Court's decision in
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 § 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.”
• 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.
Again, we noted that, in light of the Supreme Court's decision in
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.
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.
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.
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 (
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
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).
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
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.
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
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.
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
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” (
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
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.
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.
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.
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®) 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 (
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.
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.
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.
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
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.
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.
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
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:
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.
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
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.
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
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
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: Uretero1
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
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.
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.
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.
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.
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.
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).
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).
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.
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
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.
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
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.
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
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.
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.
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.
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
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
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).
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:
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.
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 § 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 § 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 § 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 § 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.
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.
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
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 § 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 § 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 § 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.
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.
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
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.
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.
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).
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 × 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 × 0.50) = Estimated CMHC Outlier Payment (before cap) = B. If B is greater than (0.08 × Provider's Total Estimated Per Diem Payments), then cap adjusted- B = (0.08 × 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.
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
We did not receive any public comments on our proposal and are finalizing as proposed.
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:
We did not receive any public comments on our proposal and are finalizing as proposed.
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.
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.
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
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 § 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 § 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 § 419.23 (86 FR 63678).
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;
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 § 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 § 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 § 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.
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.
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.
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.
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”.
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.
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
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).
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:
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
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
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.
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.
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,
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.
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.
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.
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).
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.
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.
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.
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
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.
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 § 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
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
After consideration of the public comments we received, we are finalizing our proposal regarding use of audio-only communications technology as proposed.
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
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.
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 § 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 § 410.27(a)(1)(iv)(D) in the CY
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.
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
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
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.
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
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.
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.
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
In the CY 2021 PFS final rule (85 FR 84590 through 84492, 85026), we further revised § 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 § 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
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 § 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 § 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 § 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, § 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 § 410.28(e) does not contain any such “basic rule” to clarify that nonphysician practitioners can provide general and personal supervision.
For purposes of clarity and consistency, we proposed to revise § 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 § 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 § 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 § 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 §§ 410.27 and 410.28 with the physicians' office regulations at § 410.32. Although the proposed rule contained the proposed revisions to the regulatory text of § 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 § 410.28(e) to the definitions of general, direct (for outpatient services provided at a nonhospital location), and personal supervision at § 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 § 410.28.
Similarly, since § 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 § 410.32(b)(3)(i) and (iii), we proposed to replace the cross-references at § 410.27(a)(1)(iv)(A) and (B) with the text of those definitions so that they are now contained within § 410.27. Additionally, for clarity we proposed to designate the existing definition of direct supervision and the proposed definition of personal supervision at § 410.27(a)(1)(iv)(B) as § 410.27(a)(1)(iv)(B)(1) and (2), respectively. Finally, since § 410.27(a)(1)(iv)(B) and (D) contain duplicate definitions for direct supervision, we proposed to remove § 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 § 410.27(a)(1)(iv)(B)(1).
We received the following comments in response to our proposal:
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.
After consideration of the public comments we received, we are finalizing, as proposed, our revisions to
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.
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 § 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 § 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 (§ 405.201(b)).
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 (
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 § 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
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.
After consideration of the public comments received, we are finalizing our Category B IDE coding and payment policy as proposed for CY 2023.
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 § 419.47. In particular, we proposed to provide in new § 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 § 405.201, when CMS determines that the Medicare coverage IDE study criteria at § 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, § 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 § 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.
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.
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 (
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:
•
•
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).
The AMA has continued to establish new CPT codes that describe SaaS
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.
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.
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:
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:
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.
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:
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).
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.
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.
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
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 (
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.
We received the following public comments in response to our comment solicitation:
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.
Some commenters expressed interest in using HCPCS codes (
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.
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.
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.
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
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.
This policy goal—ensuring that quality PPE is available to health care
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.
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.
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.
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.
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.
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.
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 § 413.20 require providers of services to maintain sufficient financial records and statistical data for proper determination of costs payable under Medicare.
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
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.
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.
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
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.
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.
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
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.
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.
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.
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.
(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.
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
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.
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).
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.
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.
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.
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.
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.
For the IPPS, we proposed to codify this payment adjustment in the regulations by adding new paragraph (f) to § 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 §§ 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 § 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.
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.
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.
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.
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
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,
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.
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,
Rural areas often experience lower availability of health care professionals and hospitals than urban areas.
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.
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.
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.
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.
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.
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:
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:
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:
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.
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.
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.
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.
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.
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.
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
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:
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).
Under §§ 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 § 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 § 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 § 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 § 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 § 416.166 accordingly.
Covered ancillary services are specified in § 416.164(b) and, as stated previously, are eligible for separate ASC payment. As provided at § 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 (§ 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
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.
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.
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
ASC Addendum AA: ASC Covered Surgical Procedures (Including Surgical Procedures for Which Payment is Packaged)
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
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
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
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
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
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.
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.
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
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.
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.
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
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.
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.
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
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.
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
• 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 § 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.
• HCPCS Code C9781 (Arthroscopy, shoulder, surgical; with implantation of subacromial spacer (
• CPT code 30469 (Repair of nasal valve collapse with low energy, temperature-controlled (
• 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).
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
• 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).
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
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).
Our ASC payment policy for costly devices implanted or inserted in ASCs at no cost/full credit or partial credit is set forth in § 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
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.
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 §§ 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 § 416.166(b) and are not excluded under the general exclusion criteria specified in § 416.166(c). Specifically, under § 416.166(b), the general standards provide that covered surgical procedures are surgical procedures specified by the Secretary and published in the
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 § 419.22(n); (7) can only be reported using a CPT unlisted surgical procedure code; or (8) are otherwise excluded under § 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).
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
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.
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.
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
• 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.
•
•
•
•
•
•
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.
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 § 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 § 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
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.
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).
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 (§ 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.
We proposed to update ASC payment rates for CY 2023 and subsequent years using the established rate calculation methodologies under § 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.
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 § 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:
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.
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
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
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 § 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
We proposed the following payment methodology for this proposed policy, which we would reflect in new § 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 § 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 § 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.
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.
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.
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 § 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
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 (§ 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; § 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.
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:
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
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:
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.
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
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).
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 § 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 § 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 § 416.174 as a technical change. First, we proposed at new § 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 § 419.64. In the case where a drug or biological otherwise meets the requirements under § 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 § 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 § 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 § 416.174.
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 § 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 § 419.64. In the case where a drug or biological otherwise meets the requirements under § 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 § 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 § 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 § 416.174.
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 § 416.174. We welcomed stakeholder comment on these evaluations.
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 (
We re-evaluated these products outlined in the previous paragraph against the criteria specified in § 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.
Based on our internal review as described in the proposed rule, we believed that Exparel, described by HCPCS code C9290 (
Based on the above discussion, we believed that Exparel meets the criteria described at § 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.
After consideration of the public comments we received, we believe that Exparel, described by HCPCS code C9290 (
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 § 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.
Based on the above discussion, we proposed that Omidria meets the criteria described at § 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.
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 § 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.
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 § 416.174(a), and we proposed to continue paying separately for it under
Based on the above discussion, we proposed that Xaracoll meets the criteria described at § 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.
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 § 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.
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 § 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 § 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.
Because Zynrelef receives separate payment consistent with its drug pass-through approval under § 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 § 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.
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 § 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 § 416.174, including the technical clarifications we proposed to that section. We proposed that 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 § 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.
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 § 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.
We solicited comment on additional non-opioid pain management drugs and biologicals that function as surgical supplies that may meet the criteria specified in § 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 § 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 § 416.174. We stated in the proposed rule that if we find these additional drugs or biologicals do satisfy the criteria established at § 416.174, we would finalize their separate payment status for CY 2023 in the ASC setting in this final rule with comment period.
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.
Based on the above discussion, and after consideration of the public comments we received, we believe that Posimir meets the criteria described at § 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.
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.
However, several commenters discussed potential criteria modifications. Commenters recommended that CMS modify the criterion set forth in § 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
Additionally, several commenters recommended CMS remove the criterion set forth in § 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.
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.
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.
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 § 416.195.
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:
• 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 § 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.
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).
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.
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
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
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.
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; § 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 § 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
OMB occasionally issues minor updates and revisions to statistical areas in the years between the decennial censuses. On July 15, 2015, OMB issued
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
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
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:
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.
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
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.
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.
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 § 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 § 416.171(a)(2), which address the annual update to the ASC conversion
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.
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.
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.
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.
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
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.
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 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.
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.
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.
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).
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).
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
In the CY 2022 OPPS/ASC proposed rule (86 FR 42247), we stated that it would be appropriate to require that
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.
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.
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:
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:
Table 87 summarizes the Hospital OQR Program measure set for the CY 2026 payment determination and subsequent years:
Hospital care has been gradually shifting from inpatient to outpatient settings, and since 1983, inpatient stays per capita have fallen by 31 percent.
Volume has a long history as a quality metric, however, quality measurement efforts moved away from procedure volume as it was considered simply a
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.
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.
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.
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.
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.
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.
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.
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).
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
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.
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.
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.
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.
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.
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
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.
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.
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.
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:
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:
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.
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.
We refer readers to the CYs 2014, 2016, and 2019 OPPS/ASC final rules (78 FR 75108 through 75109; 80 FR
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.
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).
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).
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,
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.
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.
We solicited public comment on our proposal.
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.
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:
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.
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:
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
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.
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.
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.
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®) 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
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;
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.
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.
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.
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.
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.
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.
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:
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
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 419.46(f) for our policies regarding validation.
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.
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.
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.
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 § 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 § 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
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.
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.
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.
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.
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
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:
Which is equivalent to:
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 § 419.41 of our regulations, prior to any adjustment for a hospital's failure to meet the quality reporting standards according to § 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).
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.
We refer readers to section XIV.A.1 of the CY 2020 OPPS/ASC final rule (84
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.
We refer readers to the CYs 2014 through 2022 OPPS/ASC final rules for an overview of the regulatory history of the ASCQR Program:
• CY 2014 OPPS/ASC final rule (78 FR 75122);
• CY 2015 OPPS/ASC final rule (79 FR 66966 through 66987);
• CY 2016 OPPS/ASC final rule (80 FR 70526 through 70538);
• CY 2017 OPPS/ASC final rule (81 FR 79797 through 79826);
• CY 2018 OPPS/ASC final rule (82 FR 59445 through 59476);
• CY 2019 OPPS/ASC final rule (83 FR 59110 through 59139);
• CY 2020 OPPS/ASC final rule (84 FR 61420 through 61434);
• CY 2021 OPPS/ASC final rule (85 FR 86187 through 86193); and
• CY 2022 OPPS/ASC final rule (86 FR 63875 through 63911).
We have codified requirements under the ASCQR Program in 42 CFR part 16, subpart H (42 CFR 416.300 through 416.330).
Previously finalized quality measures and information collections discussed in this section were approved by OMB under control number 0938-1270 (expiration date August 31, 2025). An updated PRA package reflecting the updated information collection requirements will be submitted for approval under the same OMB control number.
We refer readers to the CY 2013 OPPS/ASC final rule (77 FR 68493 and 68494) for a detailed discussion of the priorities we consider for the ASCQR Program quality measure selection. We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
We previously finalized a policy to retain measures from the previous year measure set for subsequent years, except when such measures are removed (76 FR 74494 and 74504; 77 FR 68494 and 68495; 78 FR 75122; and 79 FR 66967 through 66969). We did not propose any changes to this policy in the CY 2023 OPPS/ASC proposed rule.
In the CY 2019 OPPS/ASC final rule (83 FR 59111 through 59115), we finalized and codified at 42 CFR 416.320 an updated set of factors and the process for removing measures from the ASCQR Program. We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
The ASC-11 measure was adopted in the CY 2014 OPPS/ASC final rule with comment period (78 FR 75129). During CY 2014 OPPS/ASC rulemaking, some commenters expressed concern about the burden of collecting pre-operative and post-operative visual function surveys (78 FR 75129). In response to those comments, we modified our implementation strategy in a manner that we believed would significantly minimize collection and reporting burden by applying a sampling scheme and a low case threshold exemption to address commenters' concerns regarding burden (78 FR 75129). Shortly thereafter, we became concerned about the use of what we believed at the time were inconsistent surveys to assess visual function. The measure specifications allowed for the use of any validated survey, and we were unclear about the impact the use of varying surveys might have on accuracy, feasibility, or reporting burden. Therefore, we issued guidance stating that we would delay the implementation of ASC-11, and we subsequently finalized in the CY 2015 OPPS/ASC final rule (79 FR 66983 through 66985) the exclusion of ASC-11 from the required measure set while allowing ASCs to voluntarily report measure data beginning with the CY 2015 reporting period.
In the CY 2022 OPPS/ASC proposed rule (86 FR 42272), we stated that it would be appropriate to require that ASCs report on ASC-11 for the CY 2023 reporting period/CY 2025 payment determination as ASCs have had the opportunity for several years to familiarize themselves with ASC-11, prepare to operationalize it, and to practice reporting the measure since the CY 2015 reporting period/CY 2017 payment determination. Many commenters expressed concern about making this measure mandatory due to the burden of reporting the measure and the impact this additional burden would have during the COVID-19 pandemic, stating that ASC-11 has not been mandatory and many facilities have not been practicing reporting it (86 FR 63886). In response to these comments, in the CY 2022 OPPS/ASC final rule with comment period, we finalized a delay in the implementation of this measure with mandatory reporting beginning with the CY 2025 reporting period/CY 2027 payment determination (86 FR 63885 through 63887).
As discussed in the CY 2023 OPPS/ASC proposed rule (87 FR 44740), we now believe it is appropriate to suspend implementation of mandatory reporting and continue voluntary reporting for the ASC-11 measure and not require reporting starting with the CY 2027 payment determination. Since the publication of the CY 2022 OPPS/ASC final rule, interested parties have expressed concern about the reporting burden of this measure given the ongoing COVID-19 public health emergency (PHE). Interested parties have indicated that facilities remain impacted by the COVID-19 PHE and that the requirement to report ASC-11 would be burdensome due to national staffing and medical supply shortages coupled with unprecedented changes in patient case volumes. Due to the continued impact of the COVID-19 PHE, such as national staffing and medical supply shortages, we believe the two-year delay of mandatory reporting for this measure is no longer sufficient. Based on these factors and the feedback we received from interested parties, in the CY 2023 OPPS/ASC proposed rule, we proposed to continue with voluntary reporting and delay mandatory reporting requirements for the ASC-11 measure until future rulemaking. Therefore, we proposed to delay mandatory reporting of the ASC-11 measure beginning with CY 2025 reporting period/CY 2027 payment determination and maintain reporting for this measure as voluntary. Under the proposal, ASCs would not be subject to a payment reduction for failing to report this measure during the voluntary
As the ASC-11 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 ASC-11 after the national PHE declaration officially ends and we find it appropriate to do so given COVID-19 PHE impacts on national staffing and supply shortages. As we noted in the CY 2015 OPPS/ASC final rule, this measure addresses an area of care that is not adequately addressed in our current measure set and the measure serves to drive the coordination of care (79 FR 66984). We subsequently stated in the CY 2022 OPPS/ASC final rule with comment period that while the measure has been voluntary and available for reporting since the CY 2015 reporting period, a number of facilities have reported data consistently for this measure and those that have reported these data have done so consistently (86 FR 63886).
We invited public comment on this proposal.
Regarding the ASC-11 measure, the measure specifies that follow-up is to be made “within 90 days”; however, we agree that acceptable minimum timeframes for administration of the follow-up survey should be clarified. Per 42 CFR 416.52, the ASC must ensure each patient has the appropriate pre-surgical and post-surgical assessments completed and that all elements of the discharge requirements are completed. Additionally, when appropriate, ASCs are to make a follow-up appointment with the physician and ensure that all patients are informed, either in advance of their surgical procedure or prior to leaving the ASC of information including their physician contact information for follow-up care.
With respect to the concern that surveys being performed “during clinician follow-up” may be at odds with the prohibition on ASCs providing care beyond the narrow focus of day of surgery, we recognize that some centers may not be able to coordinate with the patient's treating physician to obtain these survey results. However, a number of facilities have been able to collect these data and have been able to successfully report this measure during the voluntary reporting period. We believe these data are beneficial to patients and their caregivers when available, we believe it is appropriate to continue to allow voluntary reporting.
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
Additionally, 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 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 ASCQR Program.
After consideration of the public comments we received, we are finalizing our proposal to change ASC-11 from mandatory to voluntary beginning with the CY 2025 reporting period/CY 2027 payment determination.
We refer readers to the CY 2022 OPPS/ASC final rule with comment period (86 FR 63875 through 63893) for the previously finalized ASCQR Program measure set for the CY 2023 program year and subsequent years.
Table 94 summarizes the previously finalized ASCQR Program measure set for the CY 2023 reporting period/CY 2025 payment determination and the CY 2024 reporting period/CY 2026 payment determination.
Table 95 summarizes the previously finalized ASCQR Program measure set for the CY 2025 reporting period/CY 2027 payment determination and as modified by the finalized proposal in this CY 2023 OPPS/ASC final rule.
An overarching ASCQR Program goal is to have an up to date, comprehensive set of quality measures for widespread use to promote informed decision-making regarding clinical care and quality improvement efforts in the ASC setting. We recognize the clinician and clinician-group centered, specialized nature of care delivered in ASCs. We, therefore, sought comment on a potential future direction of quality reporting under the ASCQR Program that would allow quality-related data for ASCs to be reported on a customizable measure set that more accurately reflects the care delivered in this setting and accounts for the services provided by individual facilities. ASC services for Medicare beneficiaries are concentrated in a limited number of procedures. Because of this, there could be a set of measures related to different specialties, for example, ophthalmology, from which ASCs could choose a specified number, but individualized combination of measures. Another option could include the creation of specific specialized tracks which would standardize quality measures within a specialty area. Such a reporting structure could benefit ASCs by allowing them to focus on practice-specific measures on a specialty or multispecialty basis; patients and other interested parties could benefit through the provision of more relevant information on quality and safety within ASCs.
The Merit-based Incentive Payment System adjusts Medicare Part B payment to a clinician based on the clinician's prior performance on four performance categories.
• Consist of limited, connected, and complementary sets of measures and related activities that are meaningful to clinicians;
• Include measures and activities resulting in comparative performance data that are valuable to patients and caregivers in evaluating clinician performance and making choices about their care;
• Promote subgroup reporting that comprehensively reflects the services provided by multispecialty groups;
• Include measures selected using the Meaningful Measures
We requested comment on the following questions for the ASCQR Program:
• Is the general concept of quality reporting by specialty feasible and desirable for ASCs participating in the ASCQR Program?
• Were we to adopt a specialty centered approach to quality measure reporting for the ASCQR Program, should CMS require that ASCs report a subset of quality measures that apply broadly to all ASCs? An example of potential broadly applicable measures for ASCs based on CY 2022 performance year MIPS quality measures
• Were we to adopt a specialty centered approach for quality measure reporting for the ASCQR Program, what would be the appropriate number and type of measures that ASCs should be required to report? Are there minimum and maximum numbers of measures required for ASCs that provide meaningful information while not being overly burdensome? What is the preferred balance of required quality measures that apply broadly to all ASCs and quality measures that apply to a particular area of specialization?
• Were we to adopt a specialty centered approach for quality measure reporting for the ASCQR Program, which area(s) of specialization would benefit from such an approach and which would not?
• Were we to adopt a specialty centered approach for quality measure reporting for the ASCQR Program, should CMS define a set of measures for particular areas of specialization (for example, ophthalmology) or should measures be self-selected for individual facilities from selected categories, especially given that an ASC may be multi-specialty?
We have considered several potential measure sets for the ASC setting based on CY 2022 performance year MIPS quality measures.
• Were we to adopt a specialty centered approach for quality measure reporting under the ASCQR Program, should ASCs be required to report all measures in such a measure set, or should they be permitted to select a minimum number of measures from their selected measure set?
• Were we to adopt a specialty centered approach for quality measure reporting system under the ASCQR Program, what measures, if any, from the current ASCQR Program measure set should be retained and incorporated in such an approach?
We invited public comment on this topic.
We reiterate that facilities are equally responsible for the quality of care provided in ASCs as clinicians. Facilities have an obligation to ensure the best quality of care is provided by the clinicians they employ in their ASCs.
We thank commenters for providing feedback on the areas of specialization that would benefit from such an approach and we will consider this feedback for future rulemaking.
Regarding the number of required measures, one commenter recommended at least twelve measures, and another recommended around two dozen measures. One commenter recommended that an individual or group report four measures. One commenter suggested that the facility should be required to report all measures in the specialty measure set.
Regarding the self-selection of measures for individual facilities, one commenter expressed that measures should not be self-selected, and stated that ASCs should report on all measures that meet the declared minimum sample size. A few commenters suggested that CMS offer self-selection of measures based on the specialties and strategic opportunities identified by the individual ASCs to add more meaningful measures toward overall quality improvement.
Another commenter suggested that CMS prevent gaming by requiring ASCs that offer patient services for more than one specialty to choose at least one measure for each specialty represented in their practice, instead of only reporting measures on one specialty.
Several commenters raised concern over alignment across quality reporting programs. Several commenters specifically raised concern over misalignment with the Hospital OQR Program if this future specialty centered approach is implemented.
ASC services for Medicare beneficiaries are concentrated in a limited number of procedures. Medicare covers surgical procedures represented in about 3,500 Healthcare Common Procedure Coding System (HCPCS) codes under the ASC payment system; however, ASC volume for services covered under Medicare is concentrated in a relatively small number of HCPCS codes. In 2019, for example, 29 HCPCS codes accounted for 75 percent of the
Although ASCs perform procedures under a smaller and more specialized subset of HCPCS codes, the volume within these services continues to increase. Hospital care has been gradually shifting from inpatient to outpatient settings, and since 1983, inpatient stays per capita have fallen by 31 percent.
Volume has a long history as a quality metric, however, quality measurement efforts had moved away from procedure volume as it was considered simply a proxy for quality rather than directly measuring outcomes.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 59449 and 59450), we removed ASC-7. We stated our belief based on the available literature that measures on specific procedure types would provide patients with more valuable ASC quality of care information as these types of measures are more strongly associated with desired patient outcomes. Thus, we removed the ASC-7 measure under our second criterion for removal from the program; specifically, that there are other measures available that are more strongly associated with desired patient outcomes for the particular topic. At the time, some commenters supported the proposal to remove the ASC-7 measure and agreed with CMS's rationale that the measure does not add value, however, some commenters opposed this proposal (82 FR 59449). Commenters that opposed removal of the ASC-7 measure emphasized the data's usefulness for comparative research, outcomes research, immediate consumer value, and strategic planning. Some of these commenters also expressed concerns that nonavailability of these data would interfere with the acceptance of ASC-based procedures and noted that the measure is not overly burdensome (82 FR 59449).
We stated in the CY 2023 OPPS/ASC proposed rule that we are considering reimplementing the ASC-7 measure or another volume measure because, in addition to being an important component of quality, the shift from the inpatient to outpatient setting has placed greater importance on tracking the volume of outpatient procedures (87 FR 44748 through 44749).
Over the past few decades, innovations in the health care system have driven the migration of procedures from the inpatient setting to the outpatient setting. Forty-five percent of percutaneous coronary intervention (PCI) procedures shifted from the inpatient to outpatient setting from 2004 to 2014, and more than 70 percent of patients who undergo thoracoscopic surgery can be discharged on the day of surgery itself due to the use of innovative techniques and technologies available in the outpatient setting.
Furthermore, we stated in the CY 2023 OPPS/ASC proposed rule (87 FR 44748 through 44749) 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
We noted in the CY 2023 OPPS/ASC proposed rule (87 FR 44748 through 44749) that the ASC-7 measure was adopted in the CY 2012 OPPS/ASC final rule with comment period (76 FR 74507 through 74509) and was not reviewed or endorsed by the Measure Applications Partnership (MAP), which first began its pre-rulemaking review of quality measures across Federal programs in February 2012 after the publication of the CY 2012 OPPS/ASC final rule with comment period in November 2011.
We sought comment on the potential inclusion of a volume measure in the ASCQR Program, either by adopting the ASC Facility Volume Data on Selected ASC Surgical Procedures (ASC-7) measure or adopting another volume indicator. We also sought comment on what volume data ASCs currently collect and if it is feasible to submit these data to the ASCQR Program, to minimize the collection and reporting burden of an alternative, new volume measure. Additionally, we sought 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 ASCQR Program measure set and publicly reporting volume data;
• Input on the mechanism of volume data collection and submission, including anticipated barriers and solutions to data collection and submission;
• Considerations for designing a volume indicator to reduce collection burden and improve data accuracy;
• Potential reporting of volume by procedure type, instead of total surgical procedure volume data for select categories, and which procedures would benefit from volume reporting; and
• The usefulness of Medicare versus non-Medicare reporting versus other or additional categories for reporting.
Some commenters expressed concern that reporting procedure volume for the ASCQR Program would lead to an unnecessary duplication of data because CMS can determine facility volumes using existing claims data.
Another commenter did not support the implementation of any additional measures during a public health emergency.
We reiterate our belief grounded in the published scientific literature that volume metrics serve as an indicator of which facilities are experienced 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.
The adoption of such 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
One commenter stated that if a volume measure is adopted, it should be used only for confidential facility-level feedback. 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. Another commenter stated that a volume measure should receive NQF endorsement before being proposed for adoption.
Several other commenters offered alternatives to reimplementing a volume measure. A few commenters encouraged CMS to use volume data that is already available to CMS through claims-based data. A few other commenters recommended that CMS focus on adopting more meaningful measures of quality and safety of care which have emerged since ASC-7 was removed. Another commenter expressed 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.
In 2009, under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), financial incentives were authorized for hospitals and clinicians to adopt and meaningfully use certified electronic health record (EHR) technology.
ASCs were not included in the HITECH Act and were ineligible for the financial incentives under the Promoting Interoperability Program. This differentiation may contribute to many ASCs continuing to utilize paper-based charts while other healthcare sectors have transitioned to digital records.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44750), we referred readers to the FY 2022 IPPS/LTCH PPS final rule (86 FR 45460 through 45498) where we finalized changes to the Promoting Interoperability Program (87 FR 49319 through 49371), and the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 28576 through 28612) which proposed additional changes to the Promoting Interoperability Program. Currently, eligible hospitals and critical access hospitals (CAHs) are required to report on four scored objectives including electronic prescribing, health information exchange, provider to patient exchange, and public health and clinical data exchange, and must also attest to the following:
• Security Risk Analysis measure.
• Safety Assurance Factors for EHR Resilience (SAFER) Guides measure.
• Actions to limit or restrict the compatibility or interoperability of CEHRT attestation.
• Office of the National Coordinator for Health Information Technology (ONC) Direct Review Attestation.
We sought comment in the CY 2023 OPPS/ASC proposed rule to explore how ASCs are implementing tools in their facilities toward the goal of interoperability (87 FR 44750). We are considering the usefulness of eCQMs in ASCs to aid in delivering effective, safe, efficient, patient-centered, equitable, and timely care.
Specifically, we invited comment on:
• What do ASCs perceive as the benefits or risks of implementing interoperability initiatives in their facilities?
• What improvements might be possible with the implementation of interoperability initiatives in ASCs, including EHR utilization (reduced delays, efficiencies, ability to benchmark, etc.)?
• Do ASCs see interoperability initiatives as non-essential or detrimental to their business practices?
Some clinicians practicing in ASCs may voluntarily participate in the MIPS Promoting Interoperability performance category, though they are not required to do so at this time.
We invited public comment on this topic.
Establishing such a system will require additional infrastructure development by ASCs, however, once the infrastructure is accomplished, the adoption of many measures that rely on data obtained directly from EHRs would enable us to expand the ASCQR Program measure set with less cost and burden to ASCs. We believe that automatic data collection and streamlined reporting, like those in other quality reporting programs, will continue to minimize burden on other
We maintain technical specifications for previously adopted ASCQR Program measures. These specifications are updated as we modify the ASCQR Program measure set. The manuals that contain specifications for the previously adopted measures can be found on the QualityNet website at:
We refer readers to the CYs 2012, 2016, 2017, and 2018 OPPS/ASC final rules (76 FR 74514 through 74515; 80 FR 70531 through 70533; 81 FR 79819 through 79820; and 82 FR 59455 through 59470, respectively) for detailed discussion of our policies regarding the public reporting of ASCQR Program data, which are codified at 42 CFR 416.315 (80 FR 70533). We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CYs 2014, 2016, and 2021 OPPS/ASC final rules with comment period (78 FR 75132 through 75133; 80 FR 70533; and 85 FR 86189, respectively) for the previously finalized QualityNet [now referred to as the Hospital Quality Reporting (HQR) system] security official requirements, including requirements for setting up a QualityNet account and the associated timelines. These procedural requirements are codified at 42 CFR 416.310(c)(1)(i). We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75133 through 75135) for a complete discussion of the participation status requirements for the CY 2014 payment determination and subsequent years. In the CY 2016 OPPS/ASC final rule (80 FR 70533 through 70534), we codified these requirements regarding participation status for the ASCQR Program at 42 CFR 416.305. We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
Previously finalized quality measures and information collections discussed in this section were approved by OMB under control number 0938-1270 (expiration date August 31, 2025). An updated PRA package reflecting the updated information collection requirements will be submitted for approval under the same OMB control number.
We previously codified our existing policies regarding data collection and submission under the ASCQR Program at 42 CFR 416.310.
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75135) for a complete summary of the data processing and collection periods for the claims-based measures using QDCs for the CY 2014 payment determination and subsequent years. In the CY 2016 OPPS/ASC final rule (80 FR 70534), we codified the requirements regarding data processing and collection periods for claims-based measures using QDCs for the ASCQR Program at 42 CFR 416.310(a)(1) and (2). We note that the previously finalized data processing and collection period requirements will apply to any future claims-based-measures using QDCs adopted in the ASCQR Program. We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59472) (and the previous rulemakings cited therein), as well as 42 CFR 416.310(a)(3) and 416.305(c) for our policies about minimum threshold, minimum case volume, and data completeness for claims-based measures using QDCs. We also refer readers to section XVI.D.1.b of the CY 2022 OPPS/ASC final rule with comment period (86 FR 63904 through 63905), where we finalized that our policies for minimum threshold, minimum case volume, and data completeness requirements apply to any future claims-based-measures using QDCs adopted in the ASCQR Program. We did not propose any changes to
We refer readers to the CY 2019 OPPS/ASC final rule with comment period (83 FR 59136 through 59138) for a complete summary of the data processing and collection requirements for the non-QDC based, claims-based measures. We codified the requirements regarding data processing and collection periods for non-QDC, claims-based measures for the ASCQR Program at 42 CFR 416.310(b). We note that these requirements for non-QDC based, claims-based measures apply to the following previously adopted measures:
• ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy; and
• ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at Ambulatory Surgical Centers (NQF #3357).
We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59473) (and the previous rulemakings cited therein) and 42 CFR 416.310(c)(1) for our requirements regarding data submitted via a CMS online data submission tool. We are currently using the Hospital Quality Reporting (HQR) System (formerly referred to as the QualityNet Secure Portal) to host our CMS online data submission tool, available by securely logging in at:
The following previously finalized measures require data to be submitted via a CMS online data submission tool for the CY 2021 payment determination and subsequent years:
• ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients;
• ASC-11: Cataracts: Improvement in Patients' Visual Function within 90 Days Following Cataract Surgery;
• ASC-13: Normothermia Outcome; and
• ASC-14: Unplanned Anterior Vitrectomy.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63883 through 63885), we finalized our proposal to require and resume data collection beginning with the CY 2023 reporting period/CY 2025 payment determination for the following four measures:
• ASC-1: Patient Burn;
• ASC-2: Patient Fall;
• ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant; and
• ASC-4: All-Cause Hospital Transfer/Admission.
Measure data for these measures would be submitted via the HQR System (formerly referred to as the QualityNet Secure Portal). We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2014 OPPS/ASC final rule (78 FR 75139 through 75140) and the CY 2015 OPPS/ASC final rule (79 FR 66985 through 66986) for our requirements regarding data submitted via a non-CMS online data submission tool (specifically, the CDC's National Healthcare Safety Network (NHSN). We codified our existing policies regarding the data collection periods for measures involving online data submission and the deadline for data submission via a non-CMS online data submission tool at 42 CFR 416.310(c)(2). While we did not finalize any changes to those policies in the CY 2022 OPPS/ASC final rule (86 FR 63875 through 63883), we did finalize policies specific to the COVID-19 Vaccination Coverage Among Health Care Personnel measure (ASC-20), for which data will be submitted via the CDC NHSN. We did not propose any changes to these policies in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2021 OPPS/ASC final rule with comment period (85 FR 86191) for a detailed discussion of our data submission deadlines policy, which we codified at 42 CFR 416.310(f). We did not propose any changes to this policy in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2021 OPPS/ASC final rule with comment period (85 FR 86191 through 86192) for a detailed discussion of our review and corrections period policy, which we codified at 42 CFR 416.310(c)(1)(iii). We did not propose any changes to this policy in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2016 OPPS/ASC final rule (82 FR 59475) (and the previous rulemakings cited therein) and 42 CFR 416.330 for the ASCQR Program's reconsideration policy. We did not propose any changes to this policy in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59474 through 59475) (and the previous rulemakings cited therein) and 42 CFR 416.310(d) for the ASCQR Program's extraordinary circumstance exceptions (ECE) request policy. We did not propose any changes to this policy in the CY 2023 OPPS/ASC proposed rule.
We refer readers to the CY 2012 OPPS/ASC final rule with comment period (76 FR 74492 through 74493) for a detailed discussion of the statutory background regarding payment reductions for ASCs that fail to meet the ASCQR Program requirements.
The national unadjusted payment rates for many services paid under the ASC payment system are equal to the product of the ASC conversion factor and the scaled relative payment weight for the APC to which the service is assigned. For CY 2022, the ASC conversion factor is equal to the conversion factor calculated for the previous year updated by the productivity-adjusted hospital market basket update factor. The productivity
In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68499 through 68500), in order to implement the requirement to reduce the annual update for ASCs that fail to meet the ASCQR Program requirements, we finalized our proposal that we would calculate two conversion factors: a full update conversion factor and an ASCQR Program reduced update conversion factor. We finalized our proposal to calculate the reduced national unadjusted payment rates using the ASCQR Program reduced update conversion factor that would apply to ASCs that fail to meet their quality reporting requirements for that calendar year payment determination. We finalized our proposal that application of the 2.0 percentage point reduction to the annual update may result in the update to the ASC payment system being less than zero prior to the application of the productivity adjustment.
The ASC conversion factor is used to calculate the ASC payment rate for services with the following payment indicators (listed in Addenda AA and BB to the proposed rule, which are available via the internet on the CMS website): “A2”, “G2”, “P2”, “R2” and “Z2”, as well as the service portion of device-intensive procedures identified by “J8” (77 FR 68500). We finalized our proposal that payment for all services assigned the payment indicators listed above would be subject to the reduction of the national unadjusted payment rates for applicable ASCs using the ASCQR Program reduced update conversion factor (77 FR 68500).
The conversion factor is not used to calculate the ASC payment rates for separately payable services that are assigned status indicators other than payment indicators “A2”, “G2”, “J8”, “P2”, “R2” and “Z2.” These services include separately payable drugs and biologicals, pass-through devices that are contractor-priced, brachytherapy sources that are paid based on the OPPS payment rates, and certain office-based procedures, radiology services and diagnostic tests where payment is based on the PFS nonfacility PE RVU-based amount, and a few other specific services that receive cost-based payment (77 FR 68500). As a result, we also finalized our proposal that the ASC payment rates for these services would not be reduced for failure to meet the ASCQR Program requirements because the payment rates for these services are not calculated using the ASC conversion factor and, therefore, are not affected by reductions to the annual update (77 FR 68500).
Office-based surgical procedures (generally those performed more than 50 percent of the time in physicians' offices) and separately paid radiology services (excluding covered ancillary radiology services involving certain nuclear medicine procedures or involving the use of contrast agents) are paid at the lesser of the PFS nonfacility PE RVU-based amounts or the amount calculated under the standard ASC ratesetting methodology. Similarly, in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66933 through 66934), we finalized our proposal that payment for certain diagnostic test codes within the medical range of CPT codes for which separate payment is allowed under the OPPS will be at the lower of the PFS nonfacility PE RVU-based (or technical component) amount or the rate calculated according to the standard ASC ratesetting methodology when provided integral to covered ASC surgical procedures. In the CY 2013 OPPS/ASC final rule with comment period (77 FR 68500), we finalized our proposal that the standard ASC ratesetting methodology for this type of comparison would use the ASC conversion factor that has been calculated using the full ASC update adjusted for productivity. This is necessary so that the resulting ASC payment indicator, based on the comparison, assigned to these procedures or services is consistent for each HCPCS code, regardless of whether payment is based on the full update conversion factor or the reduced update conversion factor.
For ASCs that receive the reduced ASC payment for failure to meet the ASCQR Program requirements, we have noted our belief that it is both equitable and appropriate that a reduction in the payment for a service should result in proportionately reduced coinsurance liability for beneficiaries (77 FR 68500). Therefore, in the CY 2013 OPPS/ASC final rule with comment period (77 FR 68500), we finalized our proposal that the Medicare beneficiary's national unadjusted coinsurance for a service to which a reduced national unadjusted payment rate applies will be based on the reduced national unadjusted payment rate.
In the CY 2013 OPPS/ASC final rule with comment period, we finalized our proposal that all other applicable adjustments to the ASC national unadjusted payment rates would apply in those cases when the annual update is reduced for ASCs that fail to meet the requirements of the ASCQR Program (77 FR 68500). For example, the following standard adjustments would apply to the reduced national unadjusted payment rates: the wage index adjustment; the multiple procedure adjustment; the interrupted procedure adjustment; and the adjustment for devices furnished with full or partial credit or without cost (77 FR 68500). We believe that these adjustments continue to be equally applicable to payment for ASCs that do not meet the ASCQR Program requirements (77 FR 68500).
In the CY 2015 through CY 2022 OPPS/ASC final rules with comment period we did not make any other changes to these policies. We proposed the continuation of these policies for CY 2023. We did not receive any public comments on our proposal, and are finalizing the continuation of these policies for CY 2023.
We refer readers to section XIV of the CY 2020 OPPS/ASC final rule with comment period (84 FR 61410) for a general overview of our Hospital Outpatient Quality Reporting (OQR) Program and to the CY 2019 OPPS/ASC final rule with comment period (83 FR 58820 through 58822) where we previously discussed our Meaningful Measures Framework.
We refer readers to the CY 2013 OPPS/ASC final rule with comment period (77 FR 68493 and 68494) for a detailed discussion of the priorities we consider for other quality programs for outpatient settings including the Hospital OQR and the Ambulatory
The Consolidated Appropriations Act (CAA), 2021, was signed into law in December 2020. In this legislation, Congress established a new Medicare provider type: Rural Emergency Hospitals (REHs). Section 125 of Division CC of the CAA added section 1861(kkk) to the Social Security Act (the Act). This section defines an REH as a facility that, in relevant part, was as of December 27, 2020: (1) a Critical Access Hospital (CAH) or a subsection (d) hospital with not more than 50 beds located in a county (or equivalent unit of local government) in a rural area (defined in section 1886(d)(2)(D) of the Act); or (2) was a subsection (d) hospital with not more than 50 beds that was treated as being in a rural area pursuant to section 1886(d)(8)(E) of the Act. Among other requirements, an REH must apply for enrollment in the Medicare program, provide emergency department services and observation care, and, at the election of the REH, provide certain services furnished on an outpatient basis, and not provide any acute care inpatient services (other than post-hospital extended care services furnished in a distinct part unit licensed as a skilled nursing facility (SNF)). Payment with respect to REH services may be made on or after January 1, 2023. Generally, a subsection (d) hospital is an acute care hospital—particularly one that receives payments under Medicare's inpatient prospective payment system (IPPS) when providing covered inpatient services to eligible beneficiaries. Similarly, a CAH is (as defined in section 1820 of the Act) a facility with no more than 25 inpatient beds, unless operating a psychiatric and/or a rehabilitation distinct part unit which may have up to 10 beds each.
We refer readers to section XVIII of this final rule with comment period for payment policies, conditions of participation, and provider enrollment for REHs.
Under section 1861(kkk)(7) of the Act, as added by section 125 of Division CC of the CAA, the Secretary is required to establish quality measurement reporting requirements for REHs, which may include the use of a small number of claims-based measures or patient experience surveys. An REH must submit quality measure data to the Secretary, and the Secretary shall establish procedures to make the data available to the public on a CMS website.
The number of hospitals that convert to an REH and their characteristics may inform the selection of quality measures as we seek measures that are useable by REHs and that have sufficient numbers of REHs with sufficient volume of services to have meaningful measurement for individual facilities and, importantly, the public. REHs as defined by statute would be subsection (d) hospitals defined as rural with not more than 50 beds and CAHs that convert in status to REHs. To estimate the number of facilities that are likely to consider conversion to an REH, one study
We seek to adopt a concise set of important, impactful, reliable, accurate, and clinically relevant measures for REHs that would inform consumer decision-making regarding care and further quality improvement efforts in the REH setting. In the CY 2022 OPPS/ASC proposed rule (86 FR 42285 through 42289), we sought comment through a Request for Information on various topics on REHs. Specifically, we sought input on the concerns of rural providers that should be taken into consideration by CMS in establishing quality measures and quality reporting requirements for REHs (86 FR 42288). We included issues raised and suggestions made from that Request for Information in the CY 2023 OPPS/ASC proposed rule (87 FR 44755) as considerations for selecting measures for an REH quality reporting program.
Under section 1861(kkk)(7)(C)(i) of the Act, unless the exception of subclause (ii) applies, a measure selected for the REHQR Program must have been endorsed by the entity with a contract under section 1890(a) of the Act. The National Quality Forum (NQF) currently holds this contract. Subclause (ii) provides that, in the case of a specified area or medical topic determined appropriate by the Secretary for which a measure has not been endorsed by the entity with contract under section 1890(a) of the Act, the Secretary may specify a measure that is not endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. In general, we prefer to adopt measures that have been endorsed by the NQF because it is a national multi-stakeholder organization with a well-documented and rigorous approach to consensus development. However, due to lack of an endorsed measure for a given facility setting, procedure, or other aspect of care, the requirement that measures reflect consensus among affected parties can be achieved in other ways, including through the measure development process, through broad acceptance, use of the measure(s), and through public comment.
The overarching goals of this program, in line with other quality programs, are to improve the quality of care provided to beneficiaries, facilitate public transparency, and ensure accountability. We note that many subsection (d) hospitals and CAHs established on or before December 27, 2020 that are eligible for REH conversion are currently reporting outpatient quality data under the Hospital OQR Program and have publicly available data. We note that while such reporting is required for subsection (d) hospitals in order to avoid a payment penalty, under the Hospital OQR Program data submission and public reporting are voluntary for CAHs. We intend to adopt measures for the REHQR Program that
We recognize REHs will be smaller hospitals that have limited resources compared with larger hospitals in metropolitan areas.
The Hospital Promoting Interoperability Program, which includes a requirement to report certain eCQMs, shows that of 1,308 CAHs, 1,066 (81.5 percent) met eCQM reporting requirements for the first quarter of 2022. This indicates a relatively high level of reporting capability for eCQMs by a hospital type that tends to be smaller and more likely to be situated in more rural areas.
The measures included in an REH quality program should reflect the types of services and care delivered most frequently in that setting, along with areas of care where there may be inappropriate variation or potential quality of care challenges.
Section 1861(kkk)(7)(C)(iii) of the Act specifies that the Secretary shall, in the selection of measures, take into consideration ways to account for rural emergency hospitals that lack sufficient case volume to ensure that the performance rates for such measures are reliable. Effective quality measurement requires a sufficiently large patient number or service volume to account for level of measure variability. This ensures that the quality measure has the necessary reliability of an individual facility's information as well as to detect meaningful distinctions between facilities. Possible approaches to quality measurement where low volume is expected are discussed in section XVI.B of the CY 2023 OPPS/ASC proposed rule and section XVI.B of this final rule.
We believe methods to examine disparities in health care delivery and quality measurement should include stratified results using, for example, patient dual eligibility and other social vulnerability factors, as well as patient demographic information to capture the breadth of social determinants of health in rural areas.
One approach being considered to measure equity across our programs is the expansion of efforts to report quality measure results stratified by patient social risk factors and demographic variables. The Request for Information (RFI) included in the FY 2023 IPPS/LTCH PPS proposed rule (87 FR 19415), titled “Overarching Principles for Measuring Healthcare Quality Disparities Across CMS Quality Programs,” describes key considerations across all CMS quality programs, including the Hospital OQR Program, when advancing the use of measure stratification to address health care disparities and advance health equity across our programs.
We refer readers to the full summary of the RFI and comments we received in the FY 2023 IPPS/LTCH PPS final rule for details on these considerations (87 FR 48780). We also refer readers to section XVI.B of this final rule with comment period for a summary of comments received in response to the RFI. In this section of the final rule, we discuss comments and feedback on the application of these principles to a quality reporting program for REHs.
We discussed possible measures of equity for use in a REHQR Program in section XVI.B of the CY 2023 OPPS/ASC proposed rule (87 FR 44760).
The National Advisory Committee on Rural Health and Human Services for the REHQR Program's measure recommendations drew from measures that were currently being reported or were recently reported under CMS' Hospital OQR Program or HRSA's MBQIP.
This chart-abstracted process measure calculates the percentage of ED acute myocardial AMI patients with ST-segment elevation on the electrocardiogram (ECG) closest to arrival time receiving fibrinolytic therapy during the ED stay and having a time from ED arrival to fibrinolysis of 30 minutes or less. The measure is calculated using chart-abstracted data, on a rolling, quarterly basis and is publicly reported, in aggregate, for one calendar year. We have publicly reported this measure under the Hospital OQR Program since 2012. In the CY 2022 OPP/ASC final rule (86 FR 63823 and 63824), OP-2 was finalized for removal from the Hospital OQR Program beginning with the CY 2023 reporting period/CY 2025 payment determination, with planned replacement with an electronic clinical quality measure (eCQM) that combines this measure with OP-3 Median Time to Transfer to Another Facility for Acute Coronary Intervention, the ST-Segment Elevation Myocardial Infarction (STEMI) eCQM (86 FR 63823 and 63824). The adoption of the STEMI eCQM and the measure calculation method for the Hospital OQR Program was finalized in this same final rule (86 FR 63837 through 63840). The current level of rurally located subsection (d) hospitals with not more than 50 beds (4 total) and CAHs (5 total) with data publicly displayed on Care Compare for this measure is relatively low (see Tables 101 and 102 of this final rule with comment period). However, the MBQIP (which utilizes data reported through the Hospital OQR Program) reported that about 71 percent of CAHs reported at least one case for the OP-2 measure.
Time to transfer to receiving facilities delays time to reperfusion in patients with ST segment elevation myocardial infarction (STEMI). There are multiple, critical system practices that minimize transfer time to receiving centers; however, two characteristics of the
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63458), OP-3 was finalized for removal from the Hospital OQR Program beginning with the CY 2023 reporting period/CY 2025 payment determination due to availability of a more broadly applicable measure that captures the OP-2 and OP-3 measure populations and expand beyond these populations to comprehensively measure the timeliness and appropriateness of STEMI care, with planned replacement of these measures by the OP-40 STEMI eCQM. The current level of subsection (d) hospitals and CAHs with data publicly displayed on Care Compare for this chart-abstracted measure is relatively low possibly due to case numbers below the threshold to allow the data to be publicly reported (see Tables 100 and 101 above). However, about 70 percent of CAHs reported at least one case for this measure through the MBQIP program.
This chart-abstracted process measure documents the percentage of ED acute myocardial infarction (AMI) patients or chest pain patients (with probable cardiac chest pain) without aspirin contraindications who received aspirin within 24 hours before ED arrival or prior to transfer at the facility level. The early use of aspirin in patients with AMI results in a significant reduction in adverse events and subsequent mortality.
OP-4 was implemented into the Hospital OQR program in CY 2008 and removed for the CY 2020 payment determination and subsequent years due to performance being sufficiently high with little variation between providers (82 FR 52570). While being topped out at the national level and no longer useful for larger or urban providers, this measure could be useful for smaller providers, including those that may convert to REH status, due to sufficient variation between individual facilities to permit the measurement of differences. An analysis (see Table 102 below) of the last publicly reported OP-4 data for small rurally located hospitals and CAHs shows such variation between facilities (both urban and rural) with the lower 10th percentile. The analysis found providers with much lower percentages of proper aspirin administration across urban/rural areas for CAHs and subsection (d) hospital types and slightly higher variation as measured by standard deviation, indicating room for improvement. We note that some CAHs, while considered rural for Medicare payment purposes, are situated in areas that can be considered urban. The analysis in Table 102 below was only to examine for variations by urban versus rural setting. This measure was retired and NQF endorsement removed from the Cardiovascular Project in 2013 with subsequent removal from the Hospital OQR Program for the CY 2018 reporting period/CY 2020 payment determination. A similar measure, Emergency Medicine: Aspirin at Arrival for Acute Myocardial Infarction (AMI) was also retired and NQF endorsement removed in 2017 (82 FR 59439).
Care provided in the ED will be a focus of REH services and we seek measures that assess the quality of care in this setting. OP-18 is a chart-abstracted measure that evaluates the time between the arrival to and departure from the ED or ED throughput time. Improving ED throughput times is important for alleviating overcrowding and reducing wait times; conditions which can lead to potential safety events and patient dissatisfaction.
This chart-abstracted, ED measure measures the mean time between patient presentation to the ED and the first moment the patient is seen by a qualified medical person for patient evaluation and management. As REH's main area of care and associated services provided will be related to their ED, and emergency services can be time-sensitive, this measure provides tailored accountability for this setting type. OP-
This structural measure for the ED setting is focused on reflecting staffing expertise and availability. OP-22 measures the percentage of patients who left the ED before being evaluated by a physician, advanced practice nurse (APN), or physician assistant (PA) and uses all-payer, administrative data (not Medicare claims data) to determine the measure's numerator and denominator populations. This measure is in the current Hospital OQR Program measure set with significant numbers of both hospitals and CAHs eligible for REH conversion that have publicly reported data for this measure.
The MBQIP is a quality improvement activity under the Medicare Rural Hospital Flexibility (Flex) program. The MBQIP supports more than 1,350 CAHs in 45 states to improve quality of care. Measures included in the MBQIP that are also included in our selection of measures from those by the National Advisory Committee on Rural Health and Human Services for the REHQR Program (above) are OP-2: Fibrinolytic Therapy Received Within 30 Minutes of ED Arrival, OP-3: Median Time to Transfer to Another Facility for Acute Coronary Intervention, OP-18: Median Time from ED Arrival to ED departure for Discharged ED Patients, and OP-22: Left Without Being Seen.
The Emergency Department Transfer Communications (EDTC) measure is a core measure in the MBQIP program for CAHs and was included in those measures recommended by the National Advisory Committee on Rural Health and Human Services for their use in a REHQR Program. The EDTC measure assesses how well key patient information is communicated from an ED to any health care facility. The measure is applicable to patients with a wide range of medical conditions (that is, acute myocardial infarction (AMI), heart failure, pneumonia, respiratory compromise, and trauma) and is relevant for both internal quality improvement purposes and external reporting to consumers and purchasers.
Measures calculated using administrative data from Medicare claims and enrollment data limit provider burden and provide valuable information regarding Medicare beneficiary service utilization and care provision. The Hospital OQR Program has several established measures of this type that could be applicable to REHs. At this time, we are focused on two current measures that have publicly reported data and that focus on services expected to be provided by hospitals eligible for REH conversion: (1) OP-10 Abdomen Computed Tomography (CT)—Use of Contrast Material and (2) OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy.
This diagnostic imaging measure is based fully on Medicare fee-for-service (FFS) claims and enrollment data. It calculates the percentage of CT abdomen studies performed with and without contrast out of all CT abdomen studies performed (those without contrast, those with contrast, and those with both). A CT study performed with and without contrast doubles the radiation dose to patients, exposing them to the potential harmful side effects of the contrast material itself.
This outcome measure is calculated fully using Medicare FFS claims and enrollment data, estimating a facility-level rate of risk standardized, all-cause, unplanned hospital visits within 7 days of an outpatient colonoscopy among Medicare FFS patients aged 65 years and older. OP-32 captures and makes more visible to providers and patients all unplanned hospital visits following colonoscopy procedures. Under the Hospital OQR program, of the hospitals eligible for REH conversion that had sufficient case volumes to have publicly reported data for this measure, 65.43 percent (123) of hospitals and 46.16 percent (625) of CAHs had any publicly reported data. While the total numbers of hospitals with publicly reported OP-32 data is somewhat low, this could be an important measure for those REHs providing outpatient services and for patients seeking information regarding complications following this procedure. OP-32 was adopted in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66963) for the CY 2018 payment determination and subsequent years using CY 2016 data for the initial year's measure calculation.
We sought comment on selected Hospital OQR Program measures recommended by the National Advisory Committee on Rural Health and Human Services as well as additional, claims-based measures for potential inclusion in an REHQR Program.
We received public comments on these topics.
Some commenters also expressed concerns for adopting measures that are either removed from the Hospital OQR Program, digital, or chart-abstracted, due to high administrative and financial burden. A few commenters specifically opposed the adoption of OP-2, OP-3, and OP-4 as these measures were removed from the Hospital OQR Program and had low public reporting rates. These commenters also raised concerns regarding high administrative burden associated with chart-abstracted measures. Many commenters opposed the adoption of ED-throughput and volume measures such as OP-18, OP-20, OP-22, and OP-32 questioning the clinical relevance, reliability, and usefulness of these measures in REHs.
Some commenters provided their view that there is significant variation in patient cases presenting at any specific REH in contrast with other types of facilities which could affect performance-related metrics. These commenters also expressed concern regarding the impact of factors outside of facility's control, such as transfer transport or receiving facility capacity. A few commenters in referencing OP-10, acknowledged the importance of avoiding potential service overuse of services, but recognized compounding factors for clinical decision-making.
In addition, multiple commenters sought clarification on the intent of the REHQR Program, given the uniqueness of its existence that's more related to providing access to care than aiding patients in determining best places for care.
Our request for information in the CY 2022 OPPS/ASC proposed rule (86 FR 42285 through 42289) yielded suggested additional topics for quality measures appropriate to the REH setting. We requested comment on the below additional topics and requested suggestions for specific measures to assess the patient experience, outcome, and processes related to these topics. In addition, we requested comment on other potential topics not listed that would be applicable to an REH quality reporting program.
REHs can utilize telehealth and other remote service capacities in serving rural communities in their vicinity. Under the COVID-19 PHE, temporary measures to facilitate the provision and receipt of care through telehealth were federally implemented.
In addition, rural emergency telehealth services present unique opportunities for access to quality care in these often time-sensitive and geographically isolated cases. For instance, utilizing provider-to-provider telehealth or telemedicine support, such as in the case of e-consultation or tele-emergency care services, in a rural ED could allow for critical specialist knowledge transfer and reduce patient transfers and wait times.
Nearly half of rural U.S. counties lack hospitals with basic capacity to provide emergency obstetric services. In New Mexico, for example, one-third of deaths during pregnancy and in the first year postpartum are from car accidents with increasing maternal mortality and morbidities in rural areas of the state.
REHs could provide valuable emergency care and other outpatient services for preserving and improving maternal health in rural areas, such as providing outpatient obstetric (OB) services in “OB deserts.”
Rural populations are disproportionately affected by mental health concerns including substance use disorders (SUD).
These high rates of mental health and substance use issues, compounded by lack of access to treatment, underscores the need for an array of behavioral health crisis services in rural areas. REHs could fill this need by providing valuable emergency care and other outpatient services for patients experiencing mental health and substance use crises, and possibly bridging the gaps in the continuum of care. For example, REHs could use telehealth services to reduce care delays,
Emergency departments (ED) and the services provided in this setting are expected to be a focus of REHs. OP-18: Median Time from ED Arrival to ED departure for Discharged ED Patients, OP-20: Door to Diagnostic Evaluation by a Qualified Medical Professional, and OP-22: Left Without Being Seen, for example, all measure important aspects of ED care.
ED utilization is another important aspect of ED care and quality measures for Medicare Advantage plans as well as for Medicaid beneficiaries point to this. The Emergency Department Utilization (EDU) Health Effectiveness Data and Information Set (HEDIS) measure assesses ED utilization among Medicare Advantage (18 and older) beneficiaries through an observed-to-expected ratio.
A patient who returns for an unscheduled visit to the emergency department (ED) shortly after initial discharge from the (that is, within 2-30 days) is called a “bounce-back”.
Rural populations, among others, face historic and current disproportionate health impacts that have resulted in the higher prevalence, increased risk, and greater barriers to care for medical conditions.
We sought public comment on the above additional measurement topics for potential future quality measures and on the ways to bridge various gaps to render equitable, quality of care in rural and rural emergency settings.
We received public comments on these topics.
Several commenters emphasized the appropriateness and importance of triage and transfer along with patient experience in the EDs, further recommending the MBQIP measure for Emergency Department Transfer Communication (EDTC) and the adoption of Emergency Department Consumer Assessment of Healthcare Providers and Systems (ED CAHPS) survey in REHs. Some commenters suggested focusing quality measures on emergency services, such as time-sensitive conditions, as the main and consistent care between facilities of this setting, and unscheduled ED return visits. Several commenters encouraged CMS to adopt measures from other programs across the agency in an effort to align and reduce burden. A couple of commenters also recommended National Quality Forum's (NQF) Rural Health Advisory Group 2022 Key Rural Measures, noting relevance to rural setting and resiliency to low volume challenges. Several commenters supported inclusion of quality measures specific to telehealth services to ensure access to specialty care such as behavioral health and maternal health and provide quality of care that is comparable to in-person services in rural setting. Some commenters supported the inclusion of telehealth measures as a means of increasing access to medical expertise and maternal, mental, and behavioral health services. One commenter recommended measures reported in the NQF's Rural Telehealth and Healthcare System Readiness Measurement Framework.
Multiple commenters recommended screening measures for conditions such as depression, substance use disorders, and malnutrition, as well as, structural measures for maternal health and health equity to further align with other quality programs. Many commenters agreed that health equity is an important aspect of healthcare and should be incorporated into the REHQR Program. Several commenters supported measure stratification by income, race, age, ethnicity, and dual-eligibility to increase accountability and advance equitable care in rural setting. Some commenters suggested adjustments to health equity measure stratification, including to address risk and regional variations in community resources, as well as making the reporting of health equity measures voluntary to keep burden low.
One commenter sought to clarify the definition of “ED bounce back”.
Several commenters suggested delaying reporting requirements on Social Determinants of Health or Social Drivers of Health (SDOH) to afford REHs sufficient time to develop processes to complete and document screenings. One commenter also sought clarification on how a health equity commitment measure would differentiate between hospitals and utilize stratified measure results to improve care. Similarly, some commenters expressed concerns regarding issues related to data collection, such as resource limitations, lack of standardization, and low case volumes potentially risking patient privacy. Another commenter noted the issue with “bounce-back” measurement, given the uniqueness of care-seeking in an REH that may lead patients to present for routine, follow-up, or new condition needs which could skew performance-based metrics.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44759), we noted that there are significant methodological challenges with measurement in rural and low-volume settings. Measure reliability and validity often hinge on having a sufficient volume of cases to ensure the reported rates are reliable. Determining appropriate approaches to addressing low-volume measurement issues will be imperative for public reporting of REH data given expected low volume of these facilities as evidenced by the numbers of rurally located subsection (d) hospitals with not more than 50 beds and CAHs with sufficient case numbers to have data publicly available on Care Compare. The NQF most recently provided expert panel recommendations for addressing the low volume challenge for performance measurement of rural providers in 2019.
Another panel recommendation was to report exceedance probabilities as an alternate to reporting absolute performance values. An exceedance probability is the probability that a certain value will be exceeded in a predefined future time period; it is often used for predicting the probability of an event. This approach would better reflect the uncertainty of observed quality measure results.
We requested comment on these recommendations for addressing the low volume issues for performance measurement of rural providers.
The comments and our responses are set forth below.
Section 1861(kkk)(7)(B)(i) of the Act provides that, with respect to each year beginning with 2023 (or each year beginning on or after the date that is 1 year after one or more measures are first specified under subparagraph (C)), a rural emergency hospital shall submit data to the Secretary in accordance with clause (ii). Clause (ii) states that, with respect to each such year, a rural emergency hospital shall submit to the Secretary data in a form and manner, and at a time, specified by the Secretary for purposes of this subparagraph. In section XVI.C of the CY 2023 OPPS/ASC proposed rule, we proposed foundational administrative requirements for REHs participating in the REHQR Program (87 FR 44765).
We currently use the CMS QualityNet Secure Portal (referred to as the Hospital Quality Reporting (HQR) secure portal) to host our CMS online data submission tool. To submit quality measure data to CMS using the HQR system, a hospital must establish a secure account through the QualityNet website and designate a Security Official (SO). For more information regarding the HQR system, we refer readers to CY 2022 OPPS/ASC final rule with comment period (85 FR 86179), as well as
Hospitals that currently report quality measure data under CMS quality programs including, but not limited to, the Hospital IQR and Hospital OQR Programs have existing QualityNet accounts. For the CY 2022 payment determination under the Hospital OQR Program, 3,268 hospitals met all reporting requirements including data submission, whereas, only 30 hospitals did not meet all requirements.
From our experience, an SO typically fulfills a variety of responsibilities related to quality reporting such as creating, approving, editing, and terminating user accounts within an organization, and monitoring account usage to maintain proper security and confidentiality protocols. While an SO is initially required to enable a hospital's QualityNet account for data submission and allows the set-up of basic user accounts with capabilities including data submission, it will not be necessary or required to maintain an SO. We highly recommend that hospitals have and maintain a Security Official; though after initial set-up, we reiterate, an SO will not be required.
We invited public comment on this proposal.
We did not receive comments on the proposal. For the reasons stated above and in the proposed rule (87 FR 44765), we are finalizing this proposal without modification. We note that we intend to propose additional administrative requirements for the REHQR Program in subsequent rulemaking.
The Medicare Program supports organ transplantation by providing an equitable
In the FY 2022 Inpatient Prospective Payment System (IPPS)/Long Term Care Hospital (LTCH) PPS proposed rule (86 FR 25070), which appeared in the
In the FY 2022 IPPS/LTCH PPS final rule with comment period (86 FR 73416), which appeared in the
We did not finalize our proposal to count as Medicare usable organs only organs transplanted into Medicare beneficiaries. We also did not finalize certain provisions of the proposed policy with respect to counting organs procured for research for purposes of calculating Medicare's share of organ acquisition costs. In the FY 2022 IPPS/LTCH PPS final rule with comment period, we stated that due to the nature of the public comments received, we would address the organ counting policy in subsequent rulemaking, as appropriate.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44765), we proposed additional revisions, clarifications and codifications pertaining to Medicare's
In the FY 2022 IPPS/LTCH PPS final rule with comment period (86 FR 73470), we clarified that for Medicare payment purposes, Medicare does not include in Medicare's share of organ acquisition costs the costs to procure an organ for research, except where explicitly required by law. Section 733 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 provided Medicare coverage of pancreata for islet cell transplant for beneficiaries participating in a National Institute of Diabetes and Digestive and Kidney Diseases clinical trial. An exception for Medicare cost sharing purposes for pancreata for islet cell transplant for these trials is under § 413.406(a). Under 42 CFR 413.5(c)(2) and 413.90(a), costs incurred for research purposes, over and above usual patient care, are not includable as Medicare allowable costs.
In the FY 2022 IPPS/LTCH PPS proposed rule (86 FR 25668), we clarified that a “research organ” is an organ procured and used for research regardless of whether it is transplanted as part of clinical care (with the exception of certain pancreata). We proposed to codify that organs used for research are not counted as Medicare usable organs in Medicare's share of organ acquisition costs (except certain pancreata procured for islet cell transplants). We also proposed that OPOs and THs do not count organs intended to be used for research prior to the time the donor entered the hospital's operating room for surgical removal of the organs as Medicare usable organs but count as total usable organs. Finally, we proposed that OPOs and THs do not count organs intended for transplant prior to the time the donor entered the hospital's operating room for surgical removal of the organs but subsequently determined to be unusable and donated to research, as Medicare usable organs or total usable organs.
In the FY 2022 IPPS/LTCH PPS final rule with comment period, we finalized our proposal to require that organs used for research be excluded from Medicare usable organs in Medicare's share of organ acquisition costs (except pancreata for islet cell transplants as specified in § 413.406(a)), and kidneys used for research be excluded from Medicare usable kidneys in Medicare's share of kidney acquisition costs under § 413.412(c). However, due to the number and nature of the comments received, we did not finalize our proposal that would have required OPOs and THs to include organs designated for research activities prior to the time the donor entered the hospital's operating room for surgical removal of the organs in the count of total usable organs or our proposal to exclude organs intended for transplant but subsequently determined to be unusable and donated to research from Medicare usable organs or total usable organs. We indicated that we may address these issues in future rulemaking.
Commenters on these proposals overall expressed concern that our proposals would negatively impact the affordability and availability of research organs and hinder the advancement of clinical research (86 FR 73494). Some commenters suggested that including research organs in the count of total usable organs reflected a change in policy for IOPOs that would require assignment of a full SAC (including administrative, general, and overhead costs) to each research organ they procured and would also result in significantly higher acquisition costs that would be borne by the research community. One commenter suggested that our proposal to exclude organs donated for research from the count of Medicare and total usable organs would result in procurement costs being passed on to researchers, which could discourage the use of human organs in research studies. A few commenters reported that IOPOs charge researchers an agreed-upon fee for furnishing an organ for use in research. They asserted that if our proposal to include organs in the count of total usable organs were finalized, IOPOs would need to charge significantly higher amounts for furnishing research organs to the research community. A few commenters noted that procuring an organ for use in research may involve less extensive testing and evaluation than is necessary when procuring an organ for transplantation. We believe that most THs and OPOs currently charge the research community agreed-upon prices to procure research organs instead of charging a SAC. We have heard from some interested parties in the transplant community that THs and OPOs use agreed-upon pricing because the SAC may include procurement services that are unnecessary to procure research organs.
In the time since we issued the FY 2022 IPPS/LTCH PPS final rule with comment period, we have continued to review the potential impacts of our research organ proposal on interested parties. We agree with the comments on the FY 2022 IPPS/LTCH PPS proposed rule that suggested that including research organs in the count of total usable organs would require the assignment of a full SAC on the Medicare cost report for each research organ procured. We understand that this practice may increase the amount the research community pays for obtaining organs for research. We also recognize that procurement costs may differ for research organs and transplanted organs because organs procured for research may be subject to less extensive testing and evaluation than organs that are to be transplanted. We believe that when THs and OPOs furnish organs for research, they should charge amounts that more accurately reflect the testing and evaluation associated with procuring organs intended for research.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44767), we proposed to require that THs and OPOs exclude organs used for research from the denominator (total usable organs) in the ratio used to determine Medicare's share of organ acquisition costs on the Medicare cost report. Research organs include any organ (with the exception of certain pancreata as set forth in § 413.406(a)) used for research, regardless of whether the organ was intended for research or intended for transplant under § 413.412(a) but subsequently determined unsuitable for transplant and instead furnished for research. When a research organ is included as a total usable organ, this
In the CY 2023 OPPS/ASC proposed rule (87 FR 44767) we stated that THs and OPOs are responsible for negotiating the amount charged for an organ used for research with the research entity receiving the research organ. We also proposed that THs and OPOs would be required to deduct the cost incurred in procuring an organ for research from their total organ acquisition costs. This process would ensure that research organ procurement costs are not allocated across all transplantable organs and, consequently, that Medicare is not paying for non-allowable research activities. Additionally, this practice would ensure that Medicare does not pay for non-allowable research costs in instances where the TH or OPO charges a fee that does not cover the cost it incurred to procure the organ for research.
The availability of organs for research is important for continued innovation in transplant medicine and for the discovery of new treatments for diseases. In order to ensure the research community has access to organs for research and to lower the procurement costs associated with such organs, we proposed to revise the policy set forth in § 413.412(c) for OPOs and THs for counting organs used for research. Specifically, we proposed to revise § 413.412(c) as follows: first, by redesignating paragraph (c) (after the subparagraph heading) as paragraph (c)(1); second, by revising redesignated paragraph (c)(1) to specify that for Medicare cost allocation purposes, organs used for research are not counted as Medicare usable organs or as total usable organs in the ratio used to calculate Medicare's share of organ acquisition costs (except pancreata for islet cell transplants as specified in § 413.406(a)); and, third, by striking the language that specifies that kidneys used for research are not counted as Medicare usable kidneys or as total usable kidneys in Medicare's share of kidney acquisition costs (we believe this language is duplicative because the reference to “organs” includes kidneys). We also proposed to amend § 413.412(c) by adding paragraph (c)(2) which would require that OPOs and THs must reduce their costs to procure organs for research from total organ acquisition costs on the Medicare cost report.
Regarding the counting of unusable organs as described in § 413.412(d), we proposed to remove the specification that the determination that an organ is unusable is made by the excising surgeon; our proposed amendment would allow this determination to be made by any surgeon. As revised, paragraph (d)—which we proposed to redesignate as paragraph (d)(1)—would provide that an organ is not counted as a Medicare usable organ or a total usable organ in the ratio used to calculate Medicare's share of organ acquisition costs if a surgeon determines, upon initial inspection or after removal of the organ, that the organ is not viable and not medically suitable for transplant and is therefore unusable. In addition, we proposed to clarify in § 413.412(d) that Medicare shares in the costs to procure unusable organs through the application of the Medicare ratio and to clarify how OPOs and THs must report these organs on their Medicare cost reports to ensure that Medicare shares in the costs to procure these organs. Specifically, we proposed to add new paragraph (d)(2), which would specify that OPOs and THs include the costs to procure unusable organs, as described in § 413.412(d)(1), in total organ acquisition costs reported on their Medicare cost reports.
Additionally, commenters expressed concern that our proposal would create an incentive for THs and OPOs to discard organs that were intended for transplant but subsequently determined unsuitable for transplant, rather than furnish those organs for research, because THs and OPOs would suffer a financial loss. A few commenters also believed that our proposal would create an incentive for THs and OPOs to discard organs that might otherwise be used for research because our proposal would allow the acquisition costs of discarded organs to be included in the administrative and general cost center while the acquisition costs of research organs would not be included in the administrative and general cost center. Several commenters believed the perceived disincentive to recover an organ that is unsuitable for transplant so that the organ can instead be used in research could result in donated organs being discarded, and that this might not honor the wishes of the organ donor or the donor's family.
Based on some comments we received on our research organ proposal in the CY 2023 OPPS/ASC proposed rule, we believe that the following statement made in the preamble may have created confusion among commenters: “For the purpose of determining Medicare's share of organ acquisition costs, we intend a `research organ' to be an organ used for research (with the exception of certain pancreata), regardless of whether the organ was intended for research, or intended for transplant under § 413.412(a) and instead used for research” (87 FR 44767). Many commenters mistakenly believed that under our proposal Medicare would no longer pay for organs initially intended for transplant if those organs were later used for research. We did not mean to imply that Medicare would not continue to share in the acquisition costs of organs that are intended for transplant but subsequently determined unsuitable for transplant and instead furnished for research. To address commenters' concerns, in this final rule we are clarifying that the acquisition costs of organs that are initially intended for transplant, but subsequently determined unsuitable for transplant and instead furnished for research, are allowable organ acquisition costs. This is similar to the organ acquisition costs for organs that are initially intended for transplant, but subsequently determined unsuitable for transplant and discarded, which are allowable organ acquisition costs.
Therefore, in this final rule with comment period, we are affirming and reiterating our policy that acquisition costs associated with
For example: Hospital A notifies OPO B that a death is imminent in its facility and that the individual is listed as a potential organ donor. OPO B arranges for surgeons to procure the organs, an operating room for the excisions to take place, and services necessary to maintain the organs in a viable state. Prior to calling the liver transplant surgeon, the OPO arranges for a liver function test, which shows that the liver is not viable. Surgeons remove all of the remaining organs, but, upon inspection, the heart surgeon determines that the heart is unsuitable for transplant. The lungs were designated for non-transplant research activities prior to the time the donor entered the operating room. Costs are allocated as follows: The cost of the liver function test is allocated to the liver cost center. No portion of the operating room fees or other services is allocated to the liver cost center, or to the lungs cost center. The costs for the operating room fees and the other services are allocated equally to the other organ cost centers, including the heart cost center. Surgeon's fees that are specific to a particular organ are allocated directly to that organ.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44767) we stated that regardless of amounts charged for an organ used for research, “the costs must be offset against total organ acquisition costs.” We believe finalizing a modified version of our proposal to provide that when costs to procure research organs are included in organ acquisition costs, THs and IOPOs must
A few commenters requested CMS provide examples and educational materials to support the accuracy of information on the Medicare cost report, should the proposals be finalized.
Assume the following:
A TH incurs $500,000 in organ acquisition costs (OAC). This OAC is made up of $100,000 to procure organs used for research ($70,000 for organs intended for transplant but subsequently determined unsuitable and furnished for research plus an additional $5,000 for these organs to be packaged and couriered to the research center plus $25,000 for organs intended for research) and $400,000 for organs transplanted.
The TH receives $28,000 in revenue for organs provided for research.
The TH reports 80 Medicare usable organs, 20 non-Medicare organs, and 25 research organs. The TH reports 100 total usable organs, excluding the 25 research organs.
The TH's Medicare ratio is 0.80 (80 Medicare usable organs/100 total usable organs = 0.80). The TH determines its allowable organ acquisition costs using its accounting practice of offsetting revenue.
The TH's allowable organ acquisition cost is $472,000 ($500,000 total OA costs − $28,000 in revenue received for organs provided for research).
The TH determines Medicare's share of allowable organ acquisition costs as $377,600 by multiplying the allowable organ acquisition costs by its Medicare ratio ($472,000 allowable organ acquisition costs times 0.80 Medicare ratio).
Under the policy we are finalizing in this final rule with comment period, the TH in this example would be permitted to continue to follow its accounting practice and reduce its total organ acquisition costs by the revenue received ($28,000) rather than incur additional burden to identify the additional $5,000 cost for packaging and couriering the organs furnished for research. We will be updating the Medicare cost report forms and instructions for IOPOs and THs commensurate with this final policy.
Because the organ is transplanted into a patient, THs and OPOs would not be required to deduct the cost incurred in procuring the organ from their total organ acquisition costs.
After consideration of the public comments received, and to address commenters' concerns and confusion with how to account for the costs to procure organs used for research, we are finalizing our proposal with modifications to § 413.412 to more clearly organize and set forth the policies we proposed and intended to convey in the 2023 OPPS/ASC proposed rule.
We are finalizing our proposal to modify the heading of § 413.412 with additional modifications to be “Intent to transplant, intent for research, counting of en bloc, and unusable organs.” We are also finalizing the heading of § 413.412(a) as “Principles for organs intended for transplant for organ acquisition payment purposes.” We are modifying § 413.412(a)(2) for further clarity with respect to costs to specify that OPOs and THs must identify the costs associated with the recovered and unrecovered organs and apportion those costs to the appropriate cost centers by organ type. These costs include the costs associated with an organ intended for transplant, but subsequently determined unsuitable for transplant and furnished to research. We are moving the concepts pertaining to research organs in § 413.412(c) to newly added § 413.412(a)(3) with revisions to more clearly specify that an organ intended for transplant but subsequently determined unsuitable for transplant and instead furnished for research is not counted as a Medicare usable organ or as a total usable organ in the ratio used to calculate Medicare's share of organ acquisition costs, as this principle is set forth in § 413.412(c). We are also adding § 413.412(a)(4)(i) and (ii) to specify that OPOs and THs must reduce total organ acquisition costs when the organ is intended for transplant but determined unsuitable for transplant and instead furnished for research as follows: (i) by deducting the costs to furnish organs for research from total organ acquisition costs or (ii) by offsetting the total organ acquisition costs by the revenue received for these organs. We are also adding § 413.412(a)(4)(iii) to specify that in no event may the reduction in total organ acquisition costs as a result of application § 413.412(a)(4) exceed the costs incurred to furnish organs for research.
We are also adding § 413.412(a)(5) to specify that when the costs to furnish organs for research are not included in total organ acquisition costs but are included in a non-reimbursable cost center, no offset is necessary.
We are revising heading of § 413.412(b) to “Principles for organs intended for research for organ acquisition payment purposes” and including some of the concepts in § 413.412(c) relative to organs intended for research to this revised paragraph. Specifically, we are revising § 413.412(b)(1) to specify that an organ is intended for research when the OPO or TH designates it for research prior to the time the donor enters the hospital's operating room for surgical removal of the organ. We are also revising § 413.412(b)(2) to specify that Medicare does not share in the acquisition costs of an organ intended for research and costs to procure these organs must not be included in organ acquisition costs (except pancreata for islet cell transplants as specified in § 413.406(a)). We are adding § 413.412(b)(3) to specify that an organ intended for research is not counted as a Medicare usable organ or as a total usable organ in the ratio used to calculate Medicare's share of organ acquisition costs (except pancreata for islet cell transplants as specified in § 413.406(a)).
We are redesignating § 413.412(b) introductory text and (b)(1) and (2) as § 413.412(c) introductory text and (c)(1) and (2), respectively. We are also redesignating § 413.412(b)(1) to § 413.412(c)(1). Additionally, we are redesignating § 413.412(b)(2) to § 413.412(c)(2).
We are also finalizing our proposal with modifications based on comments received to amend § 413.412(d)(1) to specify that an organ is not counted as a Medicare usable organ or a total usable organ in the ratio used to calculate Medicare's share of organ acquisition costs if a physician determines, upon initial inspection or after removal of the organ, that the organ is not viable and not medically suitable for transplant and is therefore unusable. We are also amending the heading at § 413.412(d), which currently reads “Counting of unusable organs,” so that it instead reads “Unusable organs,” because, as a result of the changes we are finalizing in this final rule with comment period, amended § 413.412(d) not only refers to counting unusable organs, but also to the cost to procure unusable organs as well. Consistent with finalizing our proposal with modifications, we are also revising § 413.402(a) to more clearly explain that costs related to organ acquisition include allowable costs incurred in the acquisition of organs intended for transplant, including those organs that are subsequently determined unsuitable for transplant and furnished for research. We are also making a technical correction to § 413.402(a) to specify that there are administrative and general costs that may be allowable and included on the cost report for an OPO or a TH. Specifically, we are revising § 413.402(a) to specify that costs recognized in § 413.402(b) are allowable costs incurred in the acquisition of organs intended for transplant, including those organs that are subsequently determined unsuitable for transplant and furnished for research from a living donor or a deceased donor by the hospital, or from a deceased donor by an OPO. Additionally, there are administrative and general costs that may be allowable and included on the cost report for an OPO or TH.
In the FY 2022 IPPS/LTCH PPS final rule with comment period, we codified at § 413.418(a) our longstanding policy that only costs incurred after the declaration of the donor's death and consent to donate are permitted to be included as organ acquisition costs (86 FR 73500 through 73503). However, after finalizing that rule, we received feedback from some interested parties that indicated that OPOs may incur certain costs for donor management prior to declaration of death, but when death is imminent, in accordance with OPTN donation policies.
Under this proposal, hospitals would bill the OPO for these services in accordance with § 413.418(b), and the OPO would record those billed amounts as organ acquisition costs on its Medicare cost report. Because these services are intended to determine or maintain the viability of organs for transplant, the patient's health insurance would not be billed for the organ acquisition costs, and the patient or patient's family would not be responsible for those amounts. Stakeholders were concerned that without this clarification, if services authorized by the OPO and provided by the hospital could not be included as organ acquisition costs, hospitals may bill the donor's family or a third-party payor. Doing so could create a barrier to organ donation based on economic means, by forcing costs associated with organ acquisition to be borne by the donor's family or a third-party payor. Making the donor's family responsible for these costs could preclude those of lesser economic means from fulfilling their wishes to donate organs and would be inequitable. It could also be a deterrent to deceased donor organ donation and as a result reduce the supply of organs available for transplant. We are committed to supporting organ donation in an equitable fashion and believe that not including in organ acquisition costs certain donor management costs incurred by a donor whose death is imminent, but who has not been declared dead, creates a potential barrier to organ donation and could compromise organ viability. We believe our proposal to modify § 413.418(a) to allow a donor community hospital or TH to incur costs for certain hospital services attributable to a donor prior to declaration of death, but when death is imminent supports organ donation and organ procurement costs and addresses a potential inequity in the transplant ecosystem.
After consideration of the public comments we received, we are finalizing our proposal to amend § 413.418(a), effective for cost reporting periods beginning on or after the effective date of this final rule with comment period, to specify that a donor community hospital (a Medicare-certified non-TH) and a TH incur costs for hospital services attributable to a deceased donor or a donor whose death is imminent. We note that the regulation text we are finalizing in this final rule with comment period modifies the proposed regulation text, which specified that, in the case of a potential organ donor whose death is imminent, organ acquisition costs only include those hospital services that “must be provided prior to declaration of death” to instead include the condition that “it is necessary that the services be provided prior to declaration of death in order to avoid compromising the viability of the organs for transplant.” Based on comments received, we also strengthened the regulation so that it specifies that these services “must be authorized by the OPO.” Specifically, the regulation text that we are finalizing in this final rule with comment period would provide that a donor community hospital (a Medicare-certified non-TH) and a TH incur costs for hospital services attributable to a deceased donor or a donor whose death is imminent. These services must not be part of medical treatment that primarily offers a medical benefit to the patient as determined by the healthcare team, must be authorized by the OPO, and are included as organ acquisition costs when: (1) there is consent to donate and (2) a declaration of death has been made or, if a declaration of death has not been made, death is imminent and it is necessary that the services be provided prior to declaration of death in order to avoid compromising the viability of the organs for transplant. In response to comments, in this final rule with comment period, we are also finalizing § 413.418(b) to include the instructions for amounts billed for organ acquisition costs for donors whose declaration of death has not been made, but whose death is imminent, and to more clearly specify the CCR to be used in reducing charges to costs. Specifically, we are finalizing § 413.418(b) to specify that when a donor community hospital or TH incurs costs for services furnished to a deceased donor,
We also proposed to clarify §§ 412.100(b) and 413.402(a) by removing “as appropriate” and instead specifying that organ acquisition costs are allowable costs incurred in the acquisition of organs from a living donor or a deceased donor by a hospital, or from a deceased donor by an OPO.
We proposed to revise § 413.404(c)(2)(i)(C) so that it is written in the active voice and not the passive voice. In addition, we proposed to revise this provision to clarify that the kidney SAC amount is the interim payment made by the TH or other OPO to the IOPO, as set forth in § 413.420(d)(1).
We proposed to amend § 413.420(a)(1) by striking “after September 30, 1978,” as we believe it is no longer necessary that the regulations specify that the reasonable cost reimbursement principles in part 413 only apply to covered services furnished after that date; and to replace the acronym “OPOs” with “IOPOs”. We proposed to amend § 413.420(a)(2) to correct a typographical error by changing “HOPOs” to “IOPOs”.
We proposed to amend § 413.420(c)(1)(v) to correct the statutory reference to section 1861 of the Act so that it instead refers to section 1881 of the Act; the original regulation text was in § 413.178, and was redesignated as § 413.200 in 1997
We proposed to amend §§ 413.404(c)(2)(i)(A), (B), and (D) and 413.414(c)(1) by replacing references to “Medicare contractor” with “contractor”, to conform to terminology changes made in the FY 2015 IPPS final rule (79 FR 49854 at 50199) and in accordance with the definition at 42 CFR 405.201(b).
In the CY 2023 OPPS/ASC proposed rule (87 FR 44768), we also proposed to remove the term “discarded” from § 413.412(d) and replace it with “unusable”, to promote sensitivity in scenarios where donated organs are unused because they are unsuitable for transplantation.
Finally, in the CY 2023 OPPS/ASC proposed rule (87 FR 44768), we proposed to amend § 413.400 by adding “TH” in parentheses after the defined term “transplant hospital”. Throughout subpart L, we proposed to replace the term “transplant hospital” with “TH”. We did not receive any public comments on our proposed technical corrections and nomenclature changes, and therefore, we are finalizing our proposals as proposed.
When a TH procures organs for transplantation, it is required to allocate administrative and general (A&G) costs to the appropriate organ acquisition cost centers on its Medicare hospital cost report (MCR).
To ensure the appropriate allocation of A&G costs on a TH's MCR, we proposed to clarify that when a TH receives organs from an OPO or other TH, the receiving TH must exclude from its accumulated cost statistic the purchase cost for these organs because these costs already include A&G costs. In accordance with § 413.24(d)(6), purchased services for a department that are directly assigned to the department that include A&G costs result in an excessive allocation of overhead. This duplication of A&G costs results in improper Medicare payment to the provider. In accordance with MCR instructions,
After consideration of the public comments we received, we are withdrawing our proposal to clarify that in accordance with § 413.24(d)(6), a TH must remove the directly assigned costs (purchased services) from its allocation statistic to assure a proper allocation of overhead. We believe that clarifying the appropriate allocation of A&G for THs' purchase costs from OPOs will require additional analysis, evaluation and provider education to ensure indirect costs are being allocated based on a beneficial, causal relationship to the purchased service to which they are allocated, in accordance with Medicare reasonable cost principles. As such, we may revisit the clarification of this issue in future rulemaking.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44769), we requested information on an alternative methodology for counting organs for purposes of calculating Medicare's share of organ acquisition costs; IOPOs' kidney SACs; and Medicare's reconciliation of all organs for IOPOs. While we are not responding to specific comments submitted in response to this RFI in this final rule with comment period, we intend to use this input to inform future policy development.
Americans who live in rural areas of the nation make up about 20 percent of the United States (U.S.) population, and they often experience shorter life expectancy, higher all-cause mortality, higher rates of poverty, fewer local doctors, and greater distances to travel to see health care providers, compared
The health care inequities that many rural Americans face raise serious concerns that the trend for poor health care access and worse outcomes overall in rural areas will continue unless the potential causes of such health care inequities are addressed.
There have been growing concerns over the closures of rural hospitals and critical access hospitals (CAHs). Between 2010 and February 2022, 138 rural hospitals stopped providing inpatient services, 44 of which were Critical Access Hospitals. There were 75 complete hospital closures where all services ended and 63 hospital conversions where inpatient services ended but some type of health care service continued. Rural hospitals report they continue to face the threat of closure because they lack sufficient patient volume to offer traditional hospital inpatient acute care services required for Medicare payment; however, the demand still exists for emergency and outpatient services in areas served by these hospitals. Rural hospitals are essential to providing health care to their communities and the closure of these hospitals limits access to care for the communities they once served and reduces employment opportunities, further impacting local economies. Barriers such as workforce shortages can impact health care access in rural communities and can lead to unmet health needs, delays in receiving appropriate care, inability to get preventive services, financial burdens, and preventable hospitalizations.
The Consolidated Appropriations Act (CAA), 2021, was signed into law on December 27, 2020. In this legislation, Congress established a new rural Medicare provider type: Rural Emergency Hospitals (REHs). These providers will furnish emergency department and observation care, and other specified outpatient medical and health services, if elected by the REH, that do not exceed an annual per patient average of 24 hours. Hospitals may convert to REHs if they were CAHs or rural hospitals with not more than 50 beds participating in Medicare as of the date of enactment of the CAA.
REHs are expected to help address the barriers in access to health care, particularly emergency services and other outpatient services that result from rural hospital closures, and by doing so, may help address observed inequities in health care in rural areas.
On January 20 and 21, 2021, President Biden issued three executive orders related to issues of health equity: Executive Order 13985 “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government;”
Executive Order 13985, “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government” requires the Federal Government to pursue a comprehensive approach to advancing equity for all, including people of color and others who have been historically underserved, marginalized, and adversely affected by persistent poverty and inequality by recognizing and working to redress inequities in its policies and programs that serve as barriers to equal opportunity. In accordance with this executive order, persons who live in rural areas are identified as belonging to underserved communities that have been adversely affected by inequality.
Executive Order 13988, “Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation” requires the Federal Government to prevent and combat discrimination, including when accessing health care, on the basis of gender identity or sexual orientation, and to fully enforce Title VII of the Civil Rights Act. This executive order also requires the Federal Government to fully enforce other laws that prohibit discrimination on the basis of gender identity or sexual orientation, all of which impact all persons, including those in rural communities.
In accordance with Executive Order 13995, “Ensuring an Equitable Pandemic Response and Recovery,” the Federal Government must identify and eliminate health and social inequities resulting in disproportionately higher rates of exposure, illness, and death related to COVID-19 and take swift action to prevent and remedy differences in COVID-19 care and outcomes within communities of color and other underserved populations. The executive order highlights the observed inequities in rural and Tribal communities, territories, and other geographically isolated communities. We believe the services furnished by REHs, could be one means of addressing some of the issues raised in these orders, particularly, barriers to access health care in rural communities.
Consistent with these executive orders, in implementing the new REH provider type, we are committed to advancing equity for all, including racial and ethnic minorities, members of the lesbian, gay, bisexual, transgender, and queer/questioning (LGBTQ) community, people with limited English proficiency, people with disabilities, rural populations, and people otherwise adversely affected by persistent poverty or inequality.
Section 125 of Division CC of the CAA was signed into law on December 27, 2020 and establishes REHs as a new Medicare provider type. Section 125 of the CAA added section 1861(kkk) to the Social Security Act (the Act), which sets forth the requirements for REHs. Section 1861(kkk)(2) of the Act defines an REH as a facility that is enrolled in the Medicare program as an REH; does not provide any acute care inpatient services (other than post-hospital extended care services furnished in a distinct part unit licensed as a skilled nursing facility (SNF)); has a transfer agreement in effect with a level I or level II trauma center; meets certain licensure requirements; meets requirements of a staffed emergency department; meets staff training and
Additionally, section 125(a)(1) of the CAA added section 1861(kkk)(1) of the Act, which requires that REHs provide emergency department services and observation care and, at the election of the REH, other medical and health services furnished on an outpatient basis, as specified by the Secretary through rulemaking. The REH must also have a staffed emergency department 24 hours a day, 7 days a week, have a physician, nurse practitioner, clinical nurse specialist, or physician assistant available to furnish rural emergency hospital services in the facility 24 hours a day, and meet applicable staffing requirements similar to those for CAHs.
In order to become an REH, section 1861(kkk)(3) of the Act requires that the facility, on the date of enactment of the CAA, 2021 (December 27, 2020), was a CAH or a rural hospital with not more than 50 beds. For the purpose of REH designation, section 1861(kkk)(3)(B) defines rural hospital as a subsection (d) hospital (as defined in section 1886(d)(1)(B) with not more than 50 beds located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D) of the Act)), or treated as being located in a rural area pursuant to section 1886(d)(8)(E) of the Act.
Starting on January 1, 2023, an REH that provides rural emergency hospital services (as defined in section 1861(kkk)(1) of the Act and in this final rule) will receive a Medicare payment for those services pursuant to section 1834(x)(1) of the Act, as added by section 125 of the CAA, that is equal to the amount of payment that would otherwise apply under the Medicare Hospital Outpatient Prospective Payment System (OPPS) for covered outpatient department (OPD) services increased by 5 percent. The beneficiary co-payments for these services will be calculated the same way as under the OPPS for the service, excluding the 5 percent payment increase. In addition, section 1834(x)(2) of the Act provides an additional monthly facility payment to an REH.
To participate in the Medicare program and receive payment for services furnished to Medicare beneficiaries, providers of services such as hospitals, home-health agencies, hospices, SNFs, and now REHs must enter into a provider agreement with CMS, in accordance with section 1866 of the Act. Medicaid providers, likewise, must enter into provider agreements with State Medicaid agencies to be eligible for participation in that program as described in section 1902(a)(27) of the Act. By entering into a provider agreement, a facility agrees that it will comply with the applicable requirements of the Medicare and Medicaid statutes and the regulations that the Secretary issues under the respective statute.
Section 1861(kkk)(7) of the Act requires the Secretary to establish quality measurement reporting requirements for REHs, which may include claims-based outcome measures and/or patient experience surveys. An REH must submit quality measure data to the Secretary with respect to each year beginning in 2023 (or each year beginning on or after the date that is one year after one or more measures are first specified), and the Secretary is required to establish procedures to make the data available to the public on the CMS website. As discussed further in section XVI of the CY 2023 OPPS/ASC proposed rule (87 FR 44755), CMS requested information on certain quality measures and quality reporting requirements for REHs.
The Quality Improvement Organization requirements of the Act shall apply to REHs in the same manner that they apply to hospitals and CAHs, in accordance with section 1866(a) of the Act (as amended by section 125(b)(1) of the CAA). In addition, the requirements established at section 1864 of the Act for hospitals and CAHs to be surveyed for compliance with the CoPs shall apply to REHs in the same manner as other hospitals and CAHs, in accordance with section 125(d)(2) of the CAA.
In accordance with section 1864 of the Act, CMS uses State surveyors to determine whether a provider or supplier subject to certification qualifies for an agreement to participate in Medicare. Additionally, under section 1865 of the Act, some providers or suppliers subject to certification have the option to instead elect to be accredited by private accrediting organizations (AOs) whose Medicare accreditation programs have been approved by CMS as having standards and survey procedures that meet or exceed all applicable Medicare requirements. The survey process for Medicare and Medicaid participating providers and suppliers provides an opportunity for these providers and suppliers to demonstrate compliance with all of the applicable CoPs, conditions for coverage (CfCs) or requirements. The methods used by CMS to determine compliance with the regulations include surveys conducted by a State survey agency, surveys conducted by AOs that have deeming authority for Medicare providers and suppliers, and self-attestation. CMS would require REHs participating in Medicare to demonstrate and maintain compliance with the provisions included in the CY 2023 OPPS/ASC final rule with comment period.
In preparation for developing proposed standards and to gain a clear understanding of the challenges faced by facilities providing health care services in rural communities, we published a Request for Information (RFI) on REHs in the proposed rule “Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Price Transparency of Hospital Standard Charges; Radiation Oncology Model; Request for Information on Rural Emergency Hospitals” (86 FR 42018) on August 4, 2021. CMS sought public input on a broad range of issues to inform our policymaking in establishing this new provider type. The RFI solicited public input on the concerns of rural providers, including in the areas of health and safety standards, health equity, payment policies, quality measures and quality reporting, and additional considerations and unintended consequences that should be considered during the development of standards for REHs.
Commenters on the RFI generally noted that CMS should take into consideration the challenges associated with the provision of health care services in rural communities. Some commenters noted that, while Congress did not specify the exact steps that CMS should take to calculate the annual facility payment, CMS should do so in a manner that maximizes potential payment to REHs to ensure these hospitals can continue to operate. Other commenters cautioned CMS against calculating the monthly facility payment in a way that leads to excessive payment. Commenters also encouraged CMS to set forth the details of the payment calculation in rulemaking, so
We reviewed all comments from interested parties and took them into consideration while drafting the CY 2023 OPPS/ASC proposed rule. We appreciate the interested parties' input and responses to our outreach efforts.
During the development of the policies to implement this new provider type, we reviewed the public comments received on the REH RFI, and held public listening sessions with national stakeholder organizations as well as tribal communities. We also gave presentations at CMS's hospital, rural health, and SNF open door forums and sought public feedback.
Section 1861(kkk)(1)(A) defines the term “REH services” as emergency department and observation services as well as, at the election of the REH, other medical and health services furnished on an outpatient basis as specified by the Secretary through rulemaking.
We considered how to determine what other covered outpatient medical and health services should be considered “REH services” for purposes of payment under section 1834(x)(1). Section 1834(x)(1) provides that the amount of payment for REH services shall be equal to the amount of payment that would otherwise apply under section 1833(t) of the Act for covered OPD services (as defined in section 1833(t)(1)(B) (other than clause (ii) of such section, which are inpatient hospital services paid under the OPPS)), increased by 5 percent. We interpret this statutory language to mean that the scope of covered OPD services as defined in 1833(t)(1)(B) of the Act (excluding 1833(t)(1)(B)(ii)) represents the outer limit of services that CMS may specify as “REH services.” 1834(x)(1) frames the services that may receive the 5 percent increase provided under the statute for “REH services” exclusively in terms of covered OPD services, which we believe precludes including any services that are not “covered OPD services” in this definition. Although we interpret 1834(x)(1) to limit the potential scope of REH services to what is included within the definition of “covered OPD services,” we are not suggesting that REHs would be unable to furnish, and receive payment for, other services. Rather, we are stating that only services that are covered OPD services can be paid as specified under Section 1834(x)(1). For further discussion of CMS's proposals pertaining to payment for other services performed by REHs, please see discussion in the below section titled “Services performed by REHs that are not specified REH services.”
Within the universe of covered OPD services, in its broadest interpretation, “REH services” could be defined to encompass all services included in the definition of “covered OPD services,” as provided in section 1833(t)(1)(B) of the Act, when furnished by an REH, with the exception of services described in clause (ii) of such section, which are hospital inpatient services, as REHs are precluded by section 1861(kkk)(2)(B) of the Act from providing acute inpatient services. Alternatively, CMS could define “REH services” to include only a smaller subset of services. For instance, we considered limiting “REH services” to services that are emergent in nature, such as those services described by the specific HCPCS codes describing emergency department visits and observation services.
We had some concerns, however, about narrowly defining the covered OPD services for which REHs may receive payment as REH services to only services that are emergent in nature. For one, if CMS were to limit the definition of REH services to strictly emergency services, this might cause REHs to cease to furnish other covered OPD services previously provided by the facility upon conversion of the facility to an REH, which could limit access to such services for some beneficiaries. This would seem antithetical to the purpose of section 125 of the CAA, which was created with the goal of ensuring greater access to outpatient services in rural areas. Further, a narrower definition could exclude services that may be desirable for REHs to provide in order to expand or maintain access to outpatient services in rural areas, including behavioral health, routine imaging, or clinic visits.
In light of our concerns with narrowly defining “REH services” and our interest in allowing maximum flexibility for REHs to tailor the services provided to the needs of their individual communities, for purposes of payment, we proposed to define “REH services,” at 42 CFR 419.91, as all covered outpatient department services, as defined in section 1833(t)(1)(B) of the Act, excluding services described in section 1833(t)(1)(B)(ii), furnished by an REH that would be paid under the OPPS when provided in a hospital paid under the OPPS for outpatient services, provided that the REH meets the various applicable REH CoPs. In other words, all services that are paid under the OPPS when furnished in an OPPS hospital, with the exception of acute inpatient services, would be REH services when furnished in a REH. We noted that this definition of REH services excludes services described in section 1833(t)(1)(B)(ii) of the Act, which cannot be considered REH services because they are inpatient services, which REHs are not permitted to furnish pursuant to section 1861(kkk)(2)(B) of the Act.
Additionally, we solicited comments on whether CMS should adopt a narrower definition of REH services than the definition we proposed, and if so, how commenters believe we should define these services and what methodology commenters suggest CMS use to determine whether a service meets this definition.
A few commenters expressed concerns that the proposed definition of REH services excluded services not paid under the OPPS, particularly services paid off the physician fee schedule. Some commenters specifically requested that, when a CAH converts to an REH, that the REH continue to be able to bill for physician services under the CAH method II payment methodology.
After consideration of the public comments we received, and for the reasons described here and in the proposed rule, we are finalizing our definition of REH services at 42 CFR 419.91 as proposed.
Section 1834(x)(1) of the Act states that payment for REH services “. . . shall be equal to the amount of payment that would otherwise apply under section 1833(t) for covered OPD services (as defined in section 1833(t)(1)(B) (other than clause (ii) of such section)), increased by 5 percent to reflect the higher costs incurred by such hospitals, and shall include the application of any copayment amount determined under section 1833(t)(8) as if such increase had not occurred.” As a result, we proposed that payments for REH services would be calculated using existing OPPS payment policies and rules. The only differences between the payment for a covered OPD service furnished by an OPPS provider and the payment for an REH service furnished by an REH provider would be that the service payment to the REH would be equal to the applicable OPPS payment for the same service plus an additional 5 percent. Accordingly, we proposed to codify, at 42 CFR 419.92(a)(1), that the payment rate for an REH service would be calculated using the OPPS prospective payment rate for the equivalent covered OPD service increased by 5 percent.
Because we proposed to utilize OPPS payment policies and rules to effectuate payment rates for REH services equivalent to the OPPS payment rates plus five percent, we believed it would be most efficient from a claims processing perspective for the REHs to utilize the OPPS claims processing system to process REH payments. We proposed updating the OPPS claims processing logic to include an REH-specific payment flag, which an REH provider would utilize to indicate that the provider is an REH and should not be paid at the OPPS payment rates, but should instead be paid at the REH payment rates. Claims from REH providers for REH services would be processed within the OPPS claims processing system. However, when a REH submits a facility claim with the REH-specific payment flag, this payment flag would trigger payment for REH services on the claim at the REH services payment rate, which is the OPPS payment rate plus 5 percent.
We also proposed, consistent with the requirement in section 1834(x)(1) of the Act, that the copayment amount for an REH service would be determined as if the 5 percent payment increase had not occurred. That is, the additional 5 percent payment for REH services, above the amount that would be paid for covered OPD services, would not be subject to a copayment. Therefore, we proposed to codify in the REH payment regulation, at 42 CFR 419.92(a)(2), that the beneficiary copayment amounts for an REH service would be the amounts determined under the OPPS for the equivalent covered OPD service, pursuant to section 1833(t)(8) of the Act, and would exclude the 5 percent payment increase that applies to the REH service payment.
Finally, we noted that section 1834(x)(5)(A) of the Act states that “. . . except as provided in subparagraph (B), payments under this subsection shall be made from the Federal Supplementary Medical Insurance Trust Fund under section 1841.” The statute makes clear that payments for services rendered by REHs receive payment from the Federal Supplementary Medical Insurance Trust Fund under section 1841. We noted, however, that payments for REH services would have no impact on OPPS budget neutrality because REH services are not covered OPD services under section 1833(t) of the Act to which the OPPS budget neutrality requirements apply. This also means that REH claims would not be used for OPPS rate setting purposes. Consistent with section 1834(x)(5)(A) of the Act, REH service payments will be paid from the Federal Supplementary Medical Insurance Trust Fund under section 1841 of the Act.
After consideration of the public comments we received, and for the reasons described here and in the proposed rule, we are finalizing our proposals for the payment of REH services without modification. These proposals include:
• Calculating the payment rate for an REH service using the OPPS prospective payment rate for the equivalent covered OPD service increased by 5 percent. We will codify this policy in regulation at 42 CFR 419.92(a)(1);
• Updating the OPPS claims processing logic to include an REH-specific payment flag, which REH providers will utilize to indicate that the provider is an REH and should not be paid at the OPPS payment rates, but instead will be paid at the REH payment rates. Claims from REH providers for REH services will be processed within the OPPS claims processing system; and
• Beneficiary copayment amounts for REH services will be the amounts determined under the OPPS for the equivalent covered OPD service, pursuant to section 1833(t)(8) of the Act, and will exclude the 5 percent payment increase that applies to the REH service payment. We will codify this policy in regulation, at 42 CFR 419.92(a)(2).
Section 1834(x)(1) specifically addresses the payment rate that applies for “REH services,” which, as discussed above, include at most the full range of covered OPD services for which payment can be made under the OPPS. Likewise, as discussed further below, sections 1834(x)(3) and 1834(x)(4) of the Act specifically address payment for ambulance services and post-hospital extended care services that are furnished by an REH. However, section 125 of the CAA is silent on how CMS should pay for other services furnished by an REH, such as services paid under the Clinical Laboratory Fee Schedule (CLFS) or outpatient therapy services, that may be provided on an outpatient basis by hospital outpatient departments, but that are not covered OPD services, as defined under section 1833(t)(1)(B) of the Act, and thus, pursuant to the limiting language in 1834(x)(1) of the Act, would not be payable as REH services when furnished by an REH.
In order for a REH to fulfill the statutory requirements set forth in section 1861(kkk)(2) of the Act, as well as the proposed CoPs for REHs described in the proposed rule “Medicare and Medicaid Programs; Conditions of Participation (CoPs) for Rural Emergency Hospital (REH) and Critical Access Hospital CoP Updates,” which appeared in the
As discussed above, section 1834(x)(1) of the Act provides that the amount CMS shall pay for REH services furnished by an REH shall be the same amount that would otherwise apply under section 1833(t) of the Act for covered OPD services plus five percent. However, section 125 of the CAA does not indicate that the additional 5 percent payment described in 1834(x)(1) of the Act would apply to any services other than those within the definition of “REH services.” While some of the services described by the proposed REH CoPs would meet the definition of an REH service because they are also covered OPD services under section 1833(t)(1)(B) of the Act and would therefore be eligible for the 5 percent additional payment specified in 1834(x)(1) of the Act, others—such as laboratory services paid off of the CLFS, and outpatient rehabilitation services—are outside the scope of covered OPD services and therefore, for the reasons previously discussed, could not meet the definition of a REH service. However, CMS believes that it is consistent with the statutory requirements for rural emergency hospitals set forth in section 1861(kkk)(2) of the Act for these services to be paid when they are furnished in an REH. As a result, we proposed to codify, at 42 CFR 419.92(c), that any outpatient service furnished by an REH consistent with the statutory requirements governing this provider type and the proposed REH CoPs, that does not meet the proposed definition of REH services, would be paid at the same rate the service would be paid if performed in a hospital outpatient department and paid under a fee schedule other than the OPPS, provided the requirements for payment under that system are met.
As noted above, section 1834(x)(3) of the Act states that “. . . for provisions relating to payment for ambulance services furnished by an entity owned and operated by a rural emergency hospital, see section 1834(l).” Section 1834(l) of the Act establishes the Medicare ambulance fee schedule. Therefore, consistent with section 1834(x)(3) of the Act, we proposed to codify, at 42 CFR 419.92(c)(1), that an entity that is owned and operated by an REH that provides ambulance services will receive payment for such services under the ambulance fee schedule as described in section 1834(l) of the Act and, as described in section VIII.A.7.b of the CY 2023 OPPS/ASC proposed rule (87 FR 44786 through 44787), to revise § 410.40(f) to include an REH as a covered origin and destination for ambulance transport.
Section 1861(kkk)(6)(A) of the Act provides discretion for REHs to include
One commenter asked CMS to clarify that its packaging policy for laboratory services will continue to apply to the adjusted OPPS payment made to an REH. The commenter noted that beginning in 2014, CMS packaged most laboratory tests into its OPPS payments on the basis that laboratory tests are integral, ancillary, supportive, dependent or adjunctive to a primary service or services when provided on the same day and ordered by the same physician for a hospital outpatient.
Because the commenter's request for CMS to establish transition payments for a skilled nursing facility that was previously a part of CAH if that CAH converts to an REH goes beyond the scope of the proposed framework for payment for services furnished by an REH, and does not appear to be supported by the REH statute, we are finalizing the policy for payment of post-hospital extended care services furnished by a distinct part unit within an REH as proposed, without a transition period for services furnished by the SNF units of former CAHs. After consideration of the public comments we received, and for the reasons described here and in the proposed rule, we are finalizing our proposals for payment of services performed by REHs that are not specified REH services, as set forth in 42 CFR 419.92(c), without modification.
As discussed above, section 1834(x)(1) of the Act sets forth the amounts that shall be paid for REH services in terms of amounts that would be otherwise apply for “covered OPD services” under 1833(t). Section 1833(t)(1)(B)(v) of the Act, which was added by section 603 of the Bipartisan Budget Act of 2015 (Pub. L. 114-74), enacted on November 2, 2015, (“BBA”), specifically excludes from the definition of “covered OPD services” applicable items and services furnished by an off-campus outpatient department of a provider as defined by sections 1833(t)(21)(A) and (B) of the Act. In light of the exclusion contained in 1833(t)(1)(B)(v) of the Act, CMS has carefully considered how an REH will be paid for items and services furnished by in an off-campus outpatient department of the REH. Section 1861(kkk)(8) of the Act appears to speak to this issue, stating that nothing in that provision, section 1833(a)(10), or section 1834(x) shall affect the application of paragraph (1)(B)(v) of section 1833(t), relating to applicable items and services (as defined by 1833(t)(21)(A)) that are furnished by an off-campus outpatient department of a provider (as defined by 1833(t)(21)(B)). For the reasons discussed in this section, CMS proposed to interpret this language as stipulating that the new provisions governing payments for services furnished by REHs are not intended to change the existing scope and applicability of the section 603 amendments to section 1833(t) of the Act, and that, as a result, the section 603 amendments would not apply to the determination of the payment rates for services furnished by an off-campus outpatient department of a REH.
Section 603 of the BBA amended section 1833(t)(1)(B) of the Act by adding a new clause (v), which excludes from the definition of “covered OPD services” applicable items and services (defined in paragraph (21)(A) of the section) that are furnished on or after
Sections 1833(t)(21)(B)(ii) through (vi) of the Act except from the definition of “off-campus outpatient department of a provider,” for purposes of paragraphs (1)(B)(v) and (21)(B) of the section, an off-campus PBD that was billing under section 1833(t) of the Act with respect to covered OPD services furnished prior to November 2, 2015, as well as off-campus PBDs that meet the “mid build” requirement described in section 1833(t)(21)(B)(v) of the Act and the departments of certain cancer hospitals. Likewise, the department of a provider located on the campus of such provider or within the distance (described in the definition of campus at § 413.65(a)(2)) from a remote location of a hospital facility (as defined in § 413.65(a)(2)), is also excepted from the definition of “off-campus outpatient department of a provider” pursuant to section 1833(t)(21)(B)(i). The items and services furnished on or after January 1, 2017 (or during 2018 or a subsequent year for off-campus PBDs that qualify for the mid-build exception), by the various types of excepted off-campus PBDs described in 1833(t)(21)(B) continue to be paid under the OPPS. In addition, we note that in defining “applicable items and services,” section 1833(t)(21)(A) of the Act specifically excludes items and services furnished by a dedicated emergency department as defined at 42 CFR 489.24(b).
In the CY 2017 OPPS/ASC final rule with comment period (81 FR 79699 through 79720), we established a number of policies to implement the section 603 amendments. Broadly, we: (1) defined applicable items and services in accordance with section 1833(t)(21)(A) of the Act for purposes of determining whether such items and services are covered OPD services under section 1833(t)(1)(B)(v) of the Act or whether payment for such items and services will instead be made under the applicable payment system designated under section 1833(t)(21)(C) of the Act; (2) defined off-campus PBD for purposes of sections 1833(t)(1)(B)(v) and (t)(21) of the Act; and (3) established policies for payment for applicable items and services furnished by an off-campus PBD (nonexcepted items and services) under section 1833(t)(21)(C) of the Act. We specified the Medicare Physician Fee Schedule (PFS) as the applicable payment system for most nonexcepted items and services furnished by nonexcepted off-campus PBDs. Nonexcepted items and services furnished by nonexcepted off-campus PBDs are generally paid under the PFS at the applicable OPPS payment rate adjusted by the PFS Relativity Adjuster of 40 percent (82 FR 53030).
Section 125(a)(1) of the CAA added regarding the application of the section 603 amendments to REHs that clarifies the application of provisions relating to off-campus outpatient department of a provider. The section states nothing in section 1886(kkk), section 1833(a)(10) or section 1834(x) shall affect the application of paragraph (1)(B)(v) of section 1833(t), relating to applicable items and services that are furnished by an off-campus outpatient department of a provider (as defined in subparagraph (B) of such paragraph).
While we proposed to define REH services as the covered OPD services furnished by an REH, REHs are not paid under the OPPS; we do not interpret the language in section 1861(kkk)(8) to indicate that the section 603 amendments to section 1833(t) should apply to off-campus PBDs of a REH. Rather, we believe section 1861(kkk)(8) can reasonably be interpreted as demonstrating an intent that the creation of the REH provider type would not change the existing scope and applicability of the section 603 amendments, such that the exclusion of items and services furnished by nonexcepted off-campus PBDs from the definition of covered outpatient department services under the section 603 amendments continues to apply only to items and services furnished by the nonexcepted off-campus PBDs of subsection (d) hospitals paid under the OPPS and does not apply to items and services furnished by an off-campus PBD of an REH, because REHs are a different provider type and are not paid under the OPPS.
We noted that interpreting section 1861(kkk)(8) of the Act to instead mean that the section 603 amendments should apply to items and services furnished by off-campus PBDs of REHs appears to be contrary to the Congressional intent for creating this new provider type, as this interpretation would potentially disincentivize some otherwise eligible facilities from choosing to convert to REHs. Specifically, we noted that section 603 does not apply to items and services furnished by the off-campus PBDs of CAHs. However, if the section 603 amendments applied to the off-campus PBDs of a former CAH that becomes an REH, these off-campus PBDs would appear to meet the statutory definition of “off-campus outpatient department of a provider,” and items and services furnished by these entities would be excluded from the definition of “covered OPD services” and paid at the alternative applicable payment system as provided under section 1833(t)(21)(C). Thus, if a CAH becomes an REH and as a result becomes subject to the section 603 amendments, it would experience a significant decrease in payment for items and services furnished by its off-campus PBDs, relative to the amount paid for such services when the entity was a CAH (where it is generally paid at 101 percent of reasonable cost). This would create a financial disincentive for CAHs to convert to REHs and would seem to be contrary to the Congressional intent for creating this new provider type.
We proposed to codify in the REH payment regulation, at 42 CFR 419.93(a), that items and services furnished by off-campus PBDs of REHs are not applicable items and services under sections 1833(t)(1)(B)(v) or (t)(21) of the Act, and thus that items and services furnished by these off-campus PBDs that otherwise meet the definition of “REH services” will receive the REH services payment amount of the OPPS payment plus 5 percent, as provided in section 1834(x)(1) of the Act and described in the proposed regulation text at 42 CFR 419.92(a)(1). Likewise, items and services furnished by the off-campus PBD of a REH that do not meet
We solicited comment on alternative payment approaches for items and services furnished by the off-campus PBDs of REHs that may be supported by the REH statute, including section 1861(kkk)(8) of the Act. For example, CMS solicited comment on whether application of the section 603 amendments to an off-campus PBD of an REH should depend on whether that provision applied to the entity before it converted to an REH. Under that framework, if a CAH converts to a REH, because section 1833(t)(1)(B)(v) of the Act did not apply to the CAH before converting, REH services furnished by any existing off-campus PBDs of the CAH would be paid at 105 percent of the OPPS rate, rather than at the PFS-equivalent rate required by section 1833(t)(1)(B)(v) and (t)(21) of the Act. However, because sections 1833(t)(1)(B)(v) and (t)(21) of the Act would have applied to any nonexcepted off-campus PBDs of small rural hospital paid under the OPPS before that entity converted to an REH, any existing nonexcepted off-campus PBDs of the small rural hospital would continue to be considered nonexcepted off-campus PBDs and would continue to receive the PFS-equivalent rate under section 1833(t)(21)(C) of the Act. Under this framework, any new off-campus PBDs created by the REH would be subject to the section 603 amendments. We solicited comment on our proposed approach for paying for items and services furnished by the off-campus PBDs of REHs, as well as any alternative approaches to this issue that interested parties may have.
After consideration of the public comments we received, and for the reasons discussed here, we are finalizing our proposals for payment of services furnished by an off-campus Provider-Based Department of an REH, as set forth in 42 CFR 419.93, as proposed, while clarifying that provider-based RHCs that were previously entitled to excepted status under section 1833(f) of the Act may maintain this status when their associated hospital converts to an REH.
Section 1834(x)(2) of the Act establishes an additional facility payment that is paid monthly to an REH. Section 1834(x)(5)(B) specifies that this monthly facility payment shall be made from the Federal Hospital Insurance Trust Fund under section 1817. Sections 1834(x)(2)(B) and 1834(x)(2)(C) of the Act require that, for 2023, the monthly payment is determined by first calculating the total amount that CMS determines was paid to all CAHs under Title 18 of the Act in 2019 minus the estimated total amount that would have been paid under Title 18 to CAHs in 2019 if payment were made for inpatient hospital, outpatient hospital, and skilled nursing facility services under the applicable prospective payment systems for such services during 2019. The difference is divided by the number of CAHs enrolled in Medicare in 2019 to calculate the annual amount of this additional facility payment per individual REH for 2023. The annual payment amount is then divided by 12 to calculate the monthly facility payment that each REH will receive. For 2024 and subsequent years, the monthly facility payment will be the amount of the monthly facility payment for the previous year increased by the hospital market basket percentage increase as described under section 1886(b)(3)(B)(iii) of the Act.
We interpreted the references to the year 2019 in sections 1834(x)(2)(C)(i) and 1834(x)(2)(C)(ii) of the Act to mean calendar year 2019 (CY 2019) rather than fiscal year 2019 (FY 2019) because, in the absence of language implicitly or explicitly denoting the year as fiscal, we believe calendar year is the most logical reading. The REH payment system is based on the OPPS, which sets its payment rates and rules on a CY schedule. Additionally, section 1834(x)(1) of the Act states that payments for REH services will begin on January 1, 2023, which is the first day of the CY. Accordingly, we proposed to codify the calculation of the REH monthly facility payment, under 42 CFR 419.92(b)(1), to specifically refer to the amounts that were and would have been paid to CAHs in calendar year 2019. Under this proposal, we would apply the CY schedule even when the sections refer to the inpatient hospital prospective payment system or the skilled nursing facility prospective payment system where substantial policy changes are implemented on a fiscal year schedule. Therefore, when we calculate the total amount that would have been paid to CAHs if inpatient hospital services, outpatient hospital services, and skilled nursing facility services were paid under their respective prospective payment systems, we would use claims data from the last nine months of FY 2019 and the first three months of FY 2020 to calculate payment data for CY 2019 for both inpatient hospital services and skilled nursing facility services and claims data from CY 2019 for outpatient hospital services.
When determining “the total amount that . . . was paid under this title to all critical access hospitals,” as described in section 1834(x)(2)(C)(i)(I) of the Act, we proposed to include both amounts paid to CAHs from the Medicare program and from beneficiary copayments. Likewise, we proposed to include both projected payments from the Medicare program and projected beneficiary copayments when determining the estimated total amount that would have been paid to CAHs had they been paid on a prospective basis, as described in section 1834(x)(2)(C)(i)(II) of the Act. By including both Medicare trust fund payments and beneficiary copayments, we believe that the resulting
As discussed in the proposed rule, excluding around 47 percent of the payment CAHs received in 2019 for Medicare services from the REH monthly facility payment calculation would generate a monthly facility payment that would cover a substantially smaller share of the costs REHs face. We believed that if the calculation of the monthly facility payment does not reflect payments from beneficiaries, CAHs and small rural hospitals could be discouraged from converting into REHs because the monthly facility payment would be too small.
Using our calculations, which we will discuss in more detail in sections XVIII.A.5.b and XVIII.A.5.c of this final rule with comment period,
Total estimated prospective payment for CAHs in CY 2019 with copayments: $7,033,248,418.
Difference: $12,083,666,636−$7,033,248,418 = $5,050,418,218.
Aggregate REH monthly facility payment with copayments: $5,050,418,218.
Share of the aggregate REH monthly facility payment with copayments of the total estimated prospective payment for CAHs in CY 2019 with copayments: $5,050,418,218/$7,033,248,418 = 72 percent.
Total estimated prospective payment for CAHs in CY 2019 removing copayments: $5,626,598,734.
Difference: $6,404,343,317−$5,626,598,734 = $777,744,583.
Aggregate REH monthly facility payment without copayments: $777,744,583.
Total estimated prospective payment for CAHs in CY 2019 with copayments: $7,033,248,418.
Share of the aggregate REH monthly facility payment without copayments of the total estimated prospective payment for CAHs in CY 2019 with copayments: $777,744,583/$7,033,248,418 = 11.1 percent.
We believed that including both Medicare trust fund payments and beneficiary copayments in the calculation of the monthly facility payment reflected the intent of the statute to provide incentives for CAHs and small rural hospitals that might otherwise close to convert to REHs and continue to provide outpatient hospital care in rural communities. We proposed to codify including payments from the Medicare program and beneficiary copayments for CAHs to calculate the monthly facility payment under 42 CFR 419.92(b)(1)(i) and (ii).
Finally, section 1834(x)(2)(D) of the Act states that “[a] rural emergency hospital receiving the additional facility payment under this paragraph shall maintain detailed information as specified by the Secretary as to how the facility has used the additional facility payments. Such information shall be made available to the Secretary upon request.” Accordingly, we proposed to codify this reporting requirement, under 42 CFR 419.92(b)(3), to state that an REH receiving the additional monthly facility payment must maintain detailed information as to how the facility has used the monthly facility payments and must make this information available upon request. We believe that this requirement can be met using existing cost reporting requirements for outpatient hospital facilities that would include REHs. The cost reports track spending on outpatient hospital services as a part of overall provider spending. This information will show if a sufficient share of revenue to the REH, which includes the monthly facility payment, is being directed to outpatient care. For CY 2023, we therefore did not propose to establish any new reporting or data collection requirements for REHs related to their use of the REH monthly facility payments. However, we will monitor this issue in CY 2023 to see if we may need to propose new reporting or data collection requirements for REHs in future rulemaking.
In addition, one commenter, MedPAC, disagreed with our determination that 47 percent of total Medicare payments to CAHs are beneficiary copayments. MedPAC stated that the 47 percent figure only applies to hospital outpatient services, and that copayment percentages for inpatient hospital services and skilled nursing services are much lower than outpatient hospitals services for CAHs. MedPAC noted that the copayment amounts for inpatient hospital and skilled nursing services are same for a CAH as it would be for a hospital receiving prospective payment.
In addition, we agree with the copayment information stated by MedPAC, and have revised the calculations on this topic that were provided in the CY 2023 OPPS/ASC proposed rule, as shown below. For our revised calculations that compare the monthly facility payment aggregate amount as a share of total estimated prospective payment when including or excluding copayments we have made the below revised assumptions:
(1) The copayment percentage of CAH outpatient hospital payment is approximately 47 percent;
(2) The copayment percentage of prospective payment outpatient hospital payment is slightly under 20 percent because some preventive services have no copayment, and the copayment for a few high-cost outpatient services is capped at the cost of the inpatient hospital deductible; and
(3) The copayment amounts for inpatient hospital services and skilled nursing services are the same whether the provider is a CAH or a prospectively-paid provider. Therefore, the copayment amounts cancel each other out in the equation.
We revised our assumptions to be in agreement with the beneficiary copayment share of CAH Medicare spending and the beneficiary copayment share of Medicare spending for prospectively paid hospitals described by MedPAC.
Our revised calculations are based on the detailed methodology presented in the CY 2023 OPPS/ASC proposed rule (87 FR 44781). These calculations do not include any updates to the detailed methodology that were made in this final rule. Our revised calculations are as follows:
Total estimated prospective payment for CAHs in CY 2019 with copayments: $7,679,358,171.
Difference: $12,083,666,636−$7,679,358,171 = $4,404,308,465.
Aggregate REH monthly facility payment with copayments: $4,404,308,465.
Share of the aggregate REH monthly facility payment with copayments of the total estimated prospective payment for CAHs in CY 2019 with copayments: $4,404,308,465/$7,679,358,171 = 57 percent.
Total estimated prospective payment for CAHs in CY 2019 removing copayments: $7,002,437,498.
Difference: $9,078,931,318−$7,002,437,498 = $2,076,493,820.
Aggregate REH monthly facility payment without copayments: $2,076,493,820.
Total estimated prospective payment for CAHs in CY 2019 with copayments: $7,679,358,171.
Share of the aggregate REH monthly facility payment without copayments of the total estimated prospective payment for CAHs in CY 2019 with copayments: $2,076,493,820/$7,679,358,171 = 27 percent.
Our revised calculations, using updated assumptions about the percentage of total Medicare spending for CAHs in CY 2019 from beneficiary copayments and corrected estimates about of prospective payment for CAHs in 2019, indicate that the aggregate REH monthly facility payment including copayments would be 57 percent of the estimated prospective payment for CAHs in 2019. In comparison, our prior calculations from the CY 2023 OPPS/ASC proposed rule found that the aggregate REH monthly facility payment including copayments was 72 percent of the estimated prospective payment for CAHs in 2019.
In our revised calculations, the combination of the estimated prospective payment for CAHs and the aggregate REH monthly facility payment where copayments are included in the calculation for an REH is more than twice the share of the estimated prospective payment amount than if copayments are removed from both the total amount of CAH spending in 2019 and the estimated prospective payment for CAHs in 2019 to calculate the aggregate monthly facility payment. In comparison, our prior calculations from the CY 2023 OPPS/ASC proposed rule found that the combination of the estimated prospective payment for CAHs and the aggregate REH monthly facility payment where copayments are included in the calculation for an REH is more than 6 times the share of the estimated prospective payment amount than if copayments are removed from both the total amount of CAH spending in 2019 and the estimated prospective payment for CAHs in 2019 to calculate the aggregate monthly facility payment.
Our updated calculations found a substantially smaller difference between an aggregate monthly facility payment calculated using both Medicare program spending and beneficiary copayment spending and an aggregate monthly facility payment calculated using only Medicare program spending and excluding beneficiary copayment spending than what we calculated in the CY 2023 OPPS/ASC proposed rule. However, the aggregate monthly facility payment calculated using both Medicare program spending and beneficiary copayment spending was still more than twice as large as the aggregate monthly facility payment calculated using only Medicare program spending and excluding beneficiary copayment spending. We believe the intent of creating the REH provider type was to provide financial support to hospitals that want to maintain outpatient hospital services in areas where it is no longer economically feasible to continue providing inpatient services. In order to do this, we believe the monthly facility payment was intended to help cover the difference in payment for services that a CAH would experience if it transitioned from receiving 101 percent of reasonable costs under the CAH payment methodology to prospective payment under the REH methodology. We believe an aggregate monthly facility payment that is calculated by factoring in both Medicare program spending and beneficiary copayment spending is the best way to address this difference.
Some commenters also were concerned that the monthly facility payment was based on CY 2019 payments to CAHs and CY 2019 estimated prospective payments if CAHs were paid like prospective payment hospitals with no market basket adjustment to the payment amounts for the period of 2020 through 2022. These commenters requested that we adjust the REH monthly payment calculated from CY 2019 data by the change in the market basket percentage from 2020 through 2022.
After consideration of the public comments we received, we are finalizing our monthly facility payment proposals without modification. We are required by statute, for CY 2023, to calculate the REH monthly facility payment by first calculating the total amount that CMS determines was paid to all CAHs under Title 18 of the Act in 2019 minus the estimated total amount
We are finalizing our policy to use both Medicare program spending and beneficiary copayments to calculate the monthly facility payment after correcting errors with our original calculations which gave a more accurate picture of the amount of the aggregate monthly facility payment calculated using both Medicare program spending and beneficiary copayments as compared to the amount of the aggregate monthly facility payment using Medicare program spending alone. We will calculate the monthly facility payment using claims data from calendar year 2019. We will not establish any new reporting or data collection requirements for REHs related to their use of the monthly facility payments for CY 2023. However, we will monitor this issue in CY 2023 to see if we may need to propose new reporting or data collection requirements for REHs in future rulemaking.
Section 1834(x)(2)(C)(i)(I) of the Act requires that CMS use “the total amount that the Secretary determines was paid under this title to all critical access hospitals in 2019” as part of the calculation used to determine the monthly facility payment that each REH will receive in 2023. Although the statute provides that this amount shall be an amount determined by the Secretary, the statute is silent regarding what data source the Secretary should use in making such determination. We considered whether CAH claims or cost reports would be the most appropriate data source from which to determine the payments made to CAHs in 2019.
Because CAHs are generally paid at 101 percent of their reasonable costs in furnishing services to Medicare beneficiaries and receive an annual cost settlement for all services covered by Medicare, we did not initially believe that CAH claims would reflect all payments that Medicare may have made to CAHs under Title 18 of the Act. We were most concerned about modelling the annual cost settlement using CAH claims data, because the cost settlement is an accounting action that is not linked to payments reported on individual claims. It was not clear how we would identify the payment or recoupment performed for the cost settlement. By contrast, hospital cost reports track not only payments for claims when they are first submitted to Medicare but also track the annual cost settlements made with CAHs. However, some hospital cost report data can take up to 3 years to be received and processed which raises concerns whether the cost report data for CY 2019 is fully complete. We compared our calculation of Medicare CAH spending in CY 2019 using CAH claims data to our calculation of Medicare CAH spending in CY 2019 using CAH cost report data.
We found that CAH claims data reported approximately $450 million more in CAH Medicare spending ($12,083,666,636) compared to CAH cost report data ($11,631,762,706). Also, the CAH claims data identified 42 more CAHs than the CAH hospital cost report data. Both findings indicated that the CAH claims data may have a more complete report of CAH spending than the CAH cost report data. Finally, we would need to use CAH claims data to estimate prospective Medicare spending for CAHs. CAH claims data is the only payment data source that allows service-specific payment rates to be linked to individual services, which is necessary to estimate Medicare prospective spending. When comparing data for two different sets of calculations, it is generally preferred to use the same data source for both calculations unless an alternate source is clearly superior. Since we are using CAH claims data to estimate prospective Medicare spending for CAHs, we determined that CAH claims data are the best available resource to fulfill the requirements of section 1834(x)(2)(C)(i)(I) of the Act to determine the amount of Medicare payments to all CAHs in CY 2019.
We proposed to use CAH claims data with service dates in CY 2019 to calculate the actual Medicare spending for CAHs for CY 2019 as required under section 1834(x)(2)(C)(i)(I) of the Act. Our calculation of CAH Medicare spending will include CAH claims data for inpatient hospital services, inpatient rehabilitation services, inpatient psychiatric services, outpatient hospital services, and skilled nursing services including both hospital-based and swing bed services. As discussed above, we interpret the references to the year 2019 in sections 1834(x)(2)(C)(i) of the Act to mean calendar year 2019 (CY 2019) rather than fiscal year 2019 (FY 2019) because, in the absence of language implicitly or explicitly denoting the year as fiscal, we believe calendar year is the most logical reading. Additionally, section 1834(x)(1) of the Act states that payments for REH services will begin on January 1, 2023, which is the first day of the CY. Therefore, we are using CY 2019 CAH claims data to align with our interpretation of the statute that references to the year 2019 are for the calendar year, and to avoid unintended discrepancies by combining calendar year and fiscal year data. Once we identify the claims that we will use for the calculation, we will calculate the total CAH Medicare spending for CY 2019 by getting the total of the provider payment, coinsurance amounts, and deductible amounts for all of the claims. We proposed to codify the calculation of total CAH Medicare spending in CY 2019 to create the monthly facility payment for CY 2023 under 42 CFR 419.92(b)(1)(i).
After consideration of the public comments we received, we are finalizing this proposal without modification. We will use CAH claims data with service dates in CY 2019 to calculate the actual Medicare spending for CAHs for CY 2019. Our calculation of CAH Medicare spending will include CAH claims data for inpatient hospital services, inpatient rehabilitation services, inpatient psychiatric services, outpatient hospital services, and skilled nursing services including both hospital-based and swing bed services. As discussed above, we interpret the references to the year 2019 in sections 1834(x)(2)(C)(i) of the Act to mean calendar year 2019 (CY 2019) rather than fiscal year 2019 (FY 2019) Additionally, section 1834(x)(1) of the Act states that payments for REH services will begin on January 1, 2023, which is the first day of the calendar year. We will calculate the total CAH Medicare spending for CY 2019 by including the total of the provider payment, coinsurance amounts, and deductible amounts for all of the claims. We will codify the calculation of total CAH Medicare spending in CY 2019 to create the monthly facility payment for CY 2023 under 42 CFR 419.92(b)(1)(i).
Section 1834(x)(2)(C)(i)(II) of the Act directs CMS to use “the estimated total amount that the Secretary determines would have been paid under this title to such hospitals in 2019 if payment were made for inpatient hospital, outpatient hospital, and skilled nursing facility services under the applicable prospective payment systems for such services during such year” as part of the calculation used to determine the monthly facility payment that each REH will receive in 2023. The statute clearly directs us to use policy and payment rules from the IPPS, the Inpatient Rehabilitation Facility (IRF)-PPS, the IPF-PPS, the OPPS, and the Skilled Nursing Facility PPS (SNF PPS) as they applied in CY 2019 to determine the projected prospective Medicare payment for CAHs for CY 2019.
To determine the estimated prospective Medicare payment that CAHs would have received for CY 2019, CMS will need to use data reflecting the Medicare-covered services rendered by CAHs in CY 2019. However, the statute does not specify what data source should be used for generating this estimation. We researched this issue and determined that CAH claims would be the only resource available to estimate projected prospective payment as directed by section 1834(x)(2)(C)(i)(II). We are aware of no other data sources that report individual services received by Medicare beneficiaries in CAHs, and the amounts paid to CAHs for those services, that could be used to estimate projected prospective payment for Medicare CAH services. To estimate Medicare CAH spending if CAHs were paid on a prospective basis, we therefore proposed to use CAH claims for inpatient hospital, inpatient rehabilitation, inpatient psychiatric, skilled nursing facilities, and outpatient hospital services. We also proposed to include services and items that are paid through other payment subsystems including clinical lab services; physician services; ambulance services; parenteral and enteral nutrition services; durable medical equipment, prosthetics/orthotics; and supplies; and vaccines and Medicare Part B drugs if those services and items are reported on an inpatient CAH claim, an outpatient CAH claim, or a skilled nursing CAH claim. We proposed to model prospective Medicare payment for CAHs by processing the CAH claims data through the IPPS, IRF-PPS, IPF-PPS, OPPS, or SNF-PPS in a test environment as appropriate following the detailed methodologies described in either section XVIII.A.5.c.(1) of the proposed rule for all claims except for skilled nursing facility claims or section XVIII.A.5.c.(2) of the proposed rule for skilled nursing facility claims.
In response to our request for information in the CY 2022 OPPS/ASC proposed rule, which discussed REH payment policies (86 FR 42288 through 42289), MedPAC expressed concerns that, since CAHs are paid based on procedure cost for inpatient hospital services, they have less incentive to fully document a patient's comorbidities than if the inpatient hospital services were paid prospectively where only documented diagnoses can generate payment for a provider. MedPAC was concerned that if the claims used to document CAH inpatient hospital services do not fully report all relevant patient diagnoses, the amount of projected Medicare prospective payment assigned to CAHs under the IPPS could be underestimated, which would cause the monthly REH facility payment to be larger than the amount that would be paid if CMS made this calculation using a projected Medicare prospective payment that more accurately reflected all relevant diagnoses of patients that received inpatient hospital services from CAHs assuming CAHs have the same distribution of reported primary diagnoses as hospitals receiving prospective payment.
However, we had concerns about adopting a methodology that assigns additional diagnoses for CAH inpatient hospital claims so that these claims are consistent with the distribution of reported primary diagnoses for hospitals receiving prospective payment. The relative health levels of CAH patients compared to patients of hospitals receiving prospective payment would be needed to be able to confirm MedPAC's hypothesis that CAH inpatient hospital claims may be missing some primary diagnosis information because the information is not required for CAHs to receive full payment for the services they render.
As discussed in the proposed rule, we did not have immediately available data describing in aggregate whether Medicare patients receiving care at CAHs are healthier, less healthy, or have a similar level of health compared to Medicare patients receiving care in facilities receiving prospective payment. Also, it would not be feasible to gather these data before the implementation of the REH provider type. Obtaining such data would likely involve identifying a representative sample of the patients of CAHs and hospitals receiving prospective payment to determine if there are similar or different distributions of patients based on health status, age, income, and race, which is beyond the scope of this rulemaking process. Therefore, when calculating the projected prospective Medicare payment for CAHs, we did not propose to adjust the distribution of reported primary diagnoses on the CAH inpatient hospital claims to reflect the distribution of reported primary diagnoses for hospitals receiving prospective payment.
Another issue with relying on inpatient hospital and outpatient hospital CAH claims to estimate the prospective Medicare payment that CAHs would have received in CY 2019 is that these claims do not report the Medicare supplemental payments that hospitals receive through the inpatient and outpatient prospective payment systems. Supplemental payments include IPPS new technology payments, outlier claims payments, clotting factor payments, indirect medical education (IME) payments, disproportionate-share hospital (DSH) payments, including uncompensated care payments under
We therefore proposed, in addition to medical claims service data, that CAH payment information used to calculate the projected Medicare prospective payment for CAHs include IPPS new technology payments, outlier claims payments in both the IPPS and the OPPS, clotting factor payments, indirect medical education (IME) payments, DSH payments, uncompensated care payments, and low-volume hospital payments. We chose these supplemental payments because these payments are used to determine the payment amount for claims in either the IPPS or the OPPS.
We are able to estimate new technology add-on payments, outlier payments, and clotting factor payments from the existing CAH claims data.
For IME and DSH adjustments, CAHs generally do not have up-to-date entries in the Provider Specific File. Therefore, the IME and DSH adjustments would almost always be zero in the actual calculation. We estimated an aggregate projected prospective payment amount for CAHs, and therefore, we did not need to calculate IME and DSH for each individual CAH. Instead, we estimated an aggregate amount of IME and DSH spending for all CAHs. Our proposed approach was the following:
• First, identify all IPPS hospitals that are classified as rural and calculate the average percentage of additional DSH payment and the average percentage of IME payment for these rural hospitals. We use rural IPPS hospitals as a proxy to estimate the percentage of additional DSH payment and the average percentage of IME payment. Rural IPPS hospitals are more likely to have complete and timely data to allow the calculation of DSH and IME payments than CAHs, because rural IPPS hospitals need to report their data to receive payment. CAHs, where all services are paid at 101 percent of cost, do not have an incentive to report data to generate DSH and IME payments.
• Second, for each CAH, find the closest IPPS hospital to that CAH, even if the IPPS hospital is located in an urban area, and link the additional DSH payment percentage and additional IME payment percentage of the nearby IPPS hospital to the CAH.
• Finally, average the overall rural IPPS DSH payment percentage and IME payment percentage with the modelled DSH payment percentage and IME payment percentage for each individual CAH. These individual average additional DSH and IME payments for each CAH can be aggregated to get a national estimate of DSH and IME spending for CAHs.
We used the methodology described in the CY 2019 IPPS/LTCH PPS final rule to estimate the low-volume hospital adjustment for CAHs (83 FR 41399). For discharges occurring in FYs 2019 through 2022, the low-volume hospital payment adjustment was determined using a continuous, linear sliding scale ranging from an additional 25 percent payment adjustment for low-volume hospitals with 500 or fewer discharges (both Medicare and non-Medicare discharges) to a zero percent additional payment for low-volume hospitals with more than 3,800 discharges in the fiscal year.
For uncompensated care payments, we used a similar approach to the approach we have described earlier in this section for calculating estimated DSH and IME payments for CAHs. The difference was that, for uncompensated care payments, we estimated the share of uninsured patients in each CAH receiving uncompensated care based on a nearby IPPS hospital and adjusted by the average share of uncompensated care patients for all rural IPPS hospitals. These calculations will be performed in addition to calculating the percentage of Medicare inpatient days attributed to patients eligible for both Medicare Part A and Supplemental Security Income (SSI) and the percentage of total inpatient days attributable to patients eligible for Medicaid but not Medicare Part A. We then aggregated the estimated uncompensated care payments for individual CAHs into a national estimate and included that estimate in the CAH estimated projected prospective payment amount.
We also considered modelling hospital value-based purchasing program (VBP) payments, hospital readmissions reduction program (HRRP) adjustments, and hospital-acquired condition (HAC) reduction program. However, we identified no feasible way to estimate these adjustments for either individual CAHs or for all CAHs in aggregate. These payments are made based on the actions of individual hospitals, and there are no trends regarding these payments based on whether the hospital is located in a rural or urban area or on the size of the hospital. CAHs do not participate in the VBP, HRRP, or HAC reduction program themselves. So, the only way to model these payments would be to identify trends in comparable hospitals. Since there are no payment trends with the VBP, HRRP, and HAC reduction program, we decided to not include these adjustments in the estimate of projected prospective payment for CAHs.
We proposed to codify our proposal to estimate the prospective spending for CAHs in 2019 under 42 CFR 419.92(b)(1)(ii).
In the proposed rule we provided a detailed methodology using inpatient hospital and outpatient hospital CAH claims and estimated supplemental payments to estimate the projected Medicare prospective payment for CAHs for inpatient hospital and outpatient hospital services. For more detailed information regarding the methodology for estimating the projected aggregate prospective payment for inpatient and outpatient CAH services, please refer to the supplementary document “Calculation of Rural Emergency Hospital (REH) Monthly Additional Facility Payment for 2023” on the CMS website (
• Identify CAH inpatient hospital claims by using the provider CCN number.
• Exclude Medicare Advantage encounter claims and claims where Medicare is not the primary payer from the analysis file.
• Feed CAH claims through MS-DRG grouper software to assign MS-DRG code. If the DRG code field on the claim is empty, take the grouper-assigned MS-DRG code as input to calculate payment. Otherwise, take the claim MS-DRG code as input.
• Group CAH claims that have the same Provider CCN, Admission Date, and Beneficiary ID combination into inpatient stays.
• Identify paid CAH stays by checking if there is at least one paid claim (Type-of-Bill not being “110”) within the stay. The non-paid stays or non-discharging claims will be assigned zero payment, and the discharging claim (last claim) will be assigned total PPS payment for the stay.
The Medicare PPS payment includes the components described in the following sections.
DRG payment is calculated as the sum of operating base rate and capital base rate multiplied by DRG weight and Transfer Fraction and their respective geographic adjustment factor.
• The
•
•
•
•
• The
Check the applicable relevant Diagnosis, Procedure, and Drug code on the claim to determine if the claim is eligible to receive new-tech add-on payment.
Calculate the new-tech payment as the maximum amount for the new-tech or the operating loss multiplied by the new-tech factor, whichever is smaller.
The operating loss is defined as operation cost minus operating DRG payment (defined in the “DRG Payment” section above).
Perform New-Tech add-on calculation for all applicable new technologies found on claim and sum all eligible New-Tech add-ons as total new-tech add-on.
• Calculate outlier payment as the excess cost over outlier threshold multiplied by the cost sharing factor.
•
•
Calculate the clotting factor payment as the multiplication of revenue unit of clotting factor line and the clotting factor payment rate from the Part B drug ASP file.
The following sections describe adjustments to the payment calculation. This methodology includes Disproportionate Share Hospital (DSH) payment, Uncompensated Care Payment (UCP), Indirect Medical Education (IME) payment, and Low-Volume Adjustment (LVA) payment. Performance-based payment adjustments, such as Value-based Purchasing, Hospital Readmission Reduction Program, and Hospital-Acquired Condition Reduction Program, are not included. These performance programs typically exclude CAHs and are of smaller magnitude than IME, DSH, UCP and LVA. As stated previously, there are no payment trends with the VBP, HRRP, and HAC reduction program in the rural IPPS hospital data, and we decided to not include these adjustments in the estimate of projected prospective payment for CAHs.
The DSH payment adjustment and UCP are both provider-specific add-on payments for IPPS claims. In order to apply these two adjustments to CAHs, we must assess how they are calculated for IPPS hospitals. DSH is a percentage-based adjustment to the IPPS DRG payment that is determined by the sum of: (1) the percentage of Medicare inpatient days attributed to patients eligible for both Medicare Part A and Supplemental Security Income (SSI), and (2) the percentage of total inpatient days attributable to patients eligible for Medicaid but not Medicare Part A. UCP is determined by the percent of individuals under 65 who are uninsured, and hospitals' amounts of uncompensated care. These calculations are performed in addition to calculating the percentage of Medicare inpatient days attributed to patients eligible for both Medicare Part A and Supplemental Security Income (SSI), and the percentage of total inpatient days attributable to patients eligible for Medicaid but bot Medicare Part A. All of the factors used in determining DSH/UCP are ultimately determined by the demographics of the patient populations hospitals serve. Operationally, CMS collects and calculates these factors from hospitals' cost report data from prior years. If CAHs' cost report data were as complete and timely as that of IPPS hospitals, DSH and UCP could be calculated for CAHs in the same way. However, because CAHs are reimbursed based on reasonable cost, they do not have the same incentives to complete their cost reports as IPPS hospitals. Because of the data availability and validity concerns, we did not propose to calculate DSH/UCP directly from cost report data.
To simplify the calculations, define the DSH UCP ratio as the ratio of a hospital's total DSH and UCP payment amount over its core payment (
• Select IPPS hospitals that are located in rural areas.
• For each CAH, identify the IPPS hospital that is closest based on distance from the CAH.
• Identify the closest rural IPPS hospital and then calculate the average DSH UCP ratio for that hospital.
As a validation, we run a linear regression model that predicts an IPPS hospital's DSH UCP ratio using urban/rural indicator, the percentage of population below the poverty line (at zip code level, obtained from American Community Survey) and the percentage
After we calculate and validate the DSH UCP ratios for the CAHs, we multiply the ratios by the core payment amount for each CAH to determine the estimate amount of DSH and UCP payments the CAH would receive. We then add the DSH and UCP payment amounts to the estimated prospective payment for the CAH.
The IME payment is a provider-specific add-on payment for IPPS claims. The IME adjustment factor is determined by a hospital's ratio of residents to beds. Operationally, CMS collects and calculates the adjustment from hospitals' cost report data from prior years. Because of the data availability and validity concerns (stated above), we did not propose to calculate IME payment directly from cost report data.
Instead, we proposed to define the IME ratio as the ratio of a hospital's total IME payment over its core payment (
• Select IPPS hospitals that are located in rural areas.
• For each CAH, identify the IPPS hospital that is closest to it.
• Identify the closest rural IPPS hospital and then calculate the IME ratio for the rural IPPS hospital for 2019.
As validation, run a linear regression model that predicts an IPPS hospital's IME ratio using urban/rural indicator and the average IPPS DRG weight per discharge (calculated from claims data). The urban/rural indicator is assumed to be correlated to the likelihood of a hospital to run an approved graduate medical education (GME) program and attractiveness of such program to medical school graduates; the average IPPS DRG weight is a measurement of level of complexity of inpatient care a hospital provides and is assumed to be correlated to the size of and need for GME. The results show both urban/rural indicator and average IPPS DRG weight per discharge are significant predictors of IME ratio.
The Low-Volume Hospital Payment Adjustment is an additional payment adjustment based on the per discharge amount (including capital, DSH, IME, and outlier payments) to the qualifying IPPS hospitals during CY 2019. For discharges occurring in FYs 2019 through 2022, the qualifying criteria are: (1) the hospital is more than 15 road miles from another subsection (d) hospital, and (2) the hospital has less than 3,800 total discharges during the fiscal year. If these qualifying criteria for the Low-Volume Hospital payment adjustment were also applied to CAHs, they meet the first criterion, as CAHs must be located either more than 35-miles from the nearest hospital or more than 15 miles in areas with mountainous terrain or with only secondary roads. We then check the number of total discharges from each CAH to determine if the CAH has less than 3,800 total discharges. The adjustment factor is calculated using the following formula for hospitals between 500 and 3,800 total discharges:
If a hospital has less than 500 total discharges, then the low-volume hospital payment adjustment is 25 percent. The number of total discharges of CAHs is obtained from Hospital Cost Report Data, Worksheet S-3, Part I, Line 14, and Column 15.
• Device credit (if applicable) is deducted from the claims payment.
• Sequestration:
++ Subtract the actual coinsurance and deductible amount from PPS payment, and
++ Remove 2 percent as sequester reduction.
Subtract the sequester reduction from the PPS payment.
• IRF PPS rules that applied in FY 2019 or FY 2020 based on date of service to claims furnished by the rehabilitation units of CAHs.
• IPF PPS rules that applied in FY 2019 or FY 2020 based on date of service to claims furnished by the psychiatric units of CAHs.
• The Rehabilitation and Psychiatric Units of CAH are actually paid by IRF PPS and IPF PPS payment rules; therefore, we calculate their PPS payment by summing up their actual payment.
Identify CAH outpatient hospital claims. Feed CAH claim lines to the IOCE grouper software to assign Status Indicator, Ambulatory Payment Classification (APC) code,
• Flag claim lines that have OPPS payable status indicator.
†† Device Credit, taken from value code “FD”, is deducted from payment;
†† Off-campus Provider Based Department deduction indicated by modifier PO;
†† Computed tomography reduction (indicated by modifier CT and HCPCS code);
†† Reduction of X-rays taken with film (indicated by modifier FX);
†† 22.5 percent ASP rate reduction for Part B drugs (indicated by modifier JG and status indicator K).
• Adjust APC payment rate with OPPS discount factor based on the Discount Formula Indicator.
• Multiply adjusted APC payment rate with the number of revenue units to get APC payment.
• Adjust APC payment with geographic adjustment factor.
†† Geographic adjustment factor is the sum of labor share multiplied by wage index and non-labor share;
†† Wage index is determined by the wage index file, CBSA code, and provider specific record of the provider.
• Calculate line outlier payment by multiplying excess line cost over line multiple threshold with OPPS loss share ratio, if line estimated cost is greater than line multiple threshold and line fixed threshold.
†† Estimate claim line cost by adding line covered charge and charges from packaged services;
†† Line fixed threshold is the line OPPS payment plus the OPPS fix threshold of the calendar year
†† Line multiple threshold is line OPPS payment multiplied by the OPPS outlier factor of the calendar year
Aggregate claim line level payment to claim level and apply sequester reduction to calculate final PPS payment for CAHs.
Calculate payment for other claim lines with applicable fee schedule rules (OPPS Status Indicator “A”).
• Clinical Lab Fee Schedule lines.
• Physician Fee Schedule lines.
• Ambulance Fee Schedule lines.
• Parenteral and Enteral Nutrition Fee Schedule lines.
• Durable Medical Equipment, Prosthetics/Orthotics, and Supplies Fee (DMEPOS) Schedule lines.
• Vaccine and Part B drug lines.
We also proposed to use CAH claims to make estimates of the prospective payment amounts for skilled nursing swing bed payments. Under the SNF PPS, facilities are paid a pre-determined daily rate for each day of SNF care for each individual provided services, adjusted by each patient's unique medical needs and diagnoses. In order to calculate PPS payment for CAH claims that were not paid under PPS, we proposed to assign a PPS equivalent daily rate to CAH claims factoring in patient case mix. CAH swing bed claims generally do not have minimum data set (MDS) records (that is, assessment data), which are the critical input to the Grouper software for Resource Utilization Group (RUG)/Patient Driven Payment Model (PDPM) code assignment. Therefore, RUG/PDPM codes for the CAH claims cannot be generated by the RUG/PDPM Grouper software. The RUG codes (which have been phased out of the SNF PPS, to be replaced by the PDPM) are determined mainly by the number of therapy minutes provided or expected to be provided to the beneficiary. However, the therapy minute variable is reported only through the MDS and not recorded on claims. Because of the lack of MDS data, RUG/PDPM rates cannot be directly obtained from the CAH swing bed claims. However, RUG/PDPM rates of CAH swing-bed claims can be predicted by modeling the RUG/PDPM per-diem-rates of claims that were actually paid under PPS rules. Under the statute, the SNF benefit must generally be qualified by a preceding inpatient stay. The information on the qualifying inpatient claim can be used to predict the RUG/PDPM per-diem-rate.
On October 1, 2019, a new case-mix classification model, the PDPM, under SNF PPS began. The use of RUG coding assignments ended, and the use of PDPM coding assignments started. We proposed to apply RUG PPS rules for claims with service dates between January 1, 2019, and September 30, 2019, and we proposed to apply PDPM rules for those with service dates between October 1, 2019, and December 31, 2019. The primary steps to estimate the projected prospective skilled nursing payment for CAHs are as follows:
For more detailed information regarding the methodology for each of the steps listed to estimate the aggregate projected prospective payment for CAH skilled nursing services, please refer to the supplementary document “Calculation of Rural Emergency Hospital (REH) Monthly Additional Facility Payment for 2023” on the CMS website.
Consistent with section 1834(x)(2)(C)(i) of the Act, CMS was required to determine the monthly facility payment based on the difference between the amount paid under Medicare to all CAHs in 2019 and the
An example would be a patient who has an inpatient admission for heart surgery, but 48 hours before their hospital admission received a series of imaging services in the outpatient hospital setting. With at-cost payment at the CAH, the outpatient imaging services would be separately paid along with the inpatient heart surgery. With prospective payment, the outpatient imaging services would be packaged with the DRG payment for inpatient heart surgery. Our current methodology to calculate the CY 2019 prospective payment amount for the REH monthly payment does not package the payment for the outpatient hospital imaging services which increases the prospective payment amount and reduces the amount of the monthly facility payment.
CMS has not identified a feasible approach that could be used to model the extent to which an outpatient service furnished by CAHs within 72 hours of an inpatient admission is an associated service that would be packaged under the 72-hour rule if the CAHs were paid prospectively for inpatient hospital and outpatient hospitals services under the IPPS and OPPS. For example, a diagnostic service closely related to the inpatient service received by a patient is quite likely to be associated with the inpatient service and should be packaged. However, there may be limited information on whether a therapeutic outpatient hospital service within the 72-hour window should be associated with the inpatient admission. We were not able to develop a reliable algorithm that works with CAH claims data to determine whether an outpatient service is admission-related or not. Therefore, we decided not to use the 72-hour rule to adjust the amount of the CY 2019 CAH estimated prospective payment as a part of our calculations for the monthly REH facility payment.
• A hospital's rural/urban indicator based on actual geographic location;
• The percentage of population below poverty line of the hospital's zip code area; and
• The percentage of the hospital's dually eligible Medicare beneficiaries.
The three coefficients are all statistically significant. A location in a rural area reduces the amount of DSH and uncompensated care a hospital receives. According to MACPAC, only 11.5 percent of DSH spending in 2016 was for rural hospitals.
Even though IME add-on payment is determined by the size of a residency program, rural/urban status and proximity to CAHs are highly associated with the percentage of IME payments that subsection (d) hospitals receive. CAHs are rural hospitals and few rural hospitals offer medical education programs. In the comparable group of rural subsection (d) hospitals, less than 10 percent of hospitals receive any IME payment. In other words, the projected IME add-on payment already factors the concerns of the commenters and treats most CAHs as if they do not receive IME payment. Our model of CAH IME spending estimates that IME spending is less than 1 percent of overall CAH spending.
After consideration of the public comments we received, and for the reasons discussed, we are implementing most of our proposals without modification. We modified our proposal regarding how we model the use of the low-volume adjustment to estimate the CY 2019 estimated prospective payment for CAHs to exclude from the low-volume adjustment any CAH within 15 road miles of another CAH or subsection (d) hospital. We use the detailed methodology described in this section to calculate the estimated prospective payment amount for CAHs for the REH monthly facility payment calculation.
We proposed to use the CAH claims data to determine the total number of CAHs in CY 2019, which is required to determine the amount of the monthly facility payment pursuant to section 1834(x)(2)(C)(ii) of the Act. We proposed that the number of CAHs in 2019 should be calculated as the distinct count of CAH CMS certification numbers (CCNs) that have any paid Medicare FFS claims from January 1, 2019 to December 31, 2019, based on service date. We proposed that the number of distinct CAH CCNs includes providers that may have either been open or closed during CY 2019. We proposed that CAHs that were open for only part of the year in CY 2019 will be reported as full providers in our count of distinct CAHs and will not be weighted in the count by the portion of the year they were open. Section 1834(x)(2)(C)(ii) of the Act provides that we use the total number of CAHs in 2019 and does not make any provision for counting CAHs only open for a part of the year differently from CAHs open the entire year. We proposed to check the CCNs to ensure that if a CAH reports claims data from rehabilitation, psychiatric, skilled nursing facility or swing bed units in addition to the primary hospital unit, that only one facility is included in the count of total CAHs. We proposed to codify our methodology to calculate the number of CAHs in CY 2019 under 42 CFR 419.92(b)(1)(iii).
After consideration of the public comments we received, and for the reasons discussed, we are finalizing our proposal for determining the total number of CAHs in CY 2019, as codified in 42 CFR 419.92(b)(1)(iii), without modification.
As stated above, section 1834(x)(2) of the Act requires an additional facility payment be paid monthly to an REH. For CY 2023, we proposed that this facility payment be determined, per the requirements of the CAA and consistent with our proposed regulation text at 42 CFR 419.92(b)(1), using the following calculation:
Using this calculation, we proposed that the monthly facility payment for REHs for CY 2023 would be $268,294. We requested public comments on our methodology to determine the total amount was paid by Medicare to all critical access hospitals in 2019, our methodology to estimate the total amount that would have been paid to CAHs in 2019 for inpatient hospital, outpatient hospital, and skilled nursing facility services under the applicable prospective payment systems, and our overall methodology to calculate the monthly REH facility payment for CY 2023.
After consideration of the public comments we received, and for the reasons described here and in the proposed rule, we are finalizing our
Our revised calculations of the monthly REH facility payment for CY 2023 are as follows:
Using our finalized calculations, the REH monthly facility payment for CY 2023 will be $272,866.
Section 1834(x)(2)(B) of the Act states that “[t]he annual additional facility payment amount specified in this subparagraph is . . . for 2024 and each subsequent year, the amount determined under this subparagraph for the preceding year, increased by the hospital market basket percentage increase.” Accordingly, we proposed to codify, at 42 CFR 419.92(b)(2), that for CY 2024 and each subsequent calendar year, the amount of the additional annual facility payment is the amount of the preceding year's additional annual facility payment, increased by the hospital market basket percentage increase as described under section 1886(b)(3)(B)(iii) of the Act.
After consideration of the public comments we received, we are finalizing without modification our proposal to codify at 42 CFR 419.92(b)(2) the calculation of the REH monthly facility payment in CY 2024 and subsequent years based on the value of the preceding year increased by the hospital market basket percentage increase.
Section 1861(kkk)(9) of the Act explicitly precludes administrative or judicial review under section 1869 of the Act, section 1878 of the Act, or otherwise of (1) the establishment of requirements by the Secretary under subsection 1861(kkk) of the Act; (2) the determination of payment amounts under section 1834(x) of the Act, including the determination of additional facility payments; and (3) the determination of whether a rural emergency hospital meets the requirements of subsection 1861(kkk) of the Act.
Consequently, we proposed to codify, at § 419.94, the preclusion of administrative or judicial review under section 1869 of the Act, section 1878 of the Act, or otherwise of (1) the determination of whether a rural emergency hospital meets the requirements established by CMS's proposed regulations at 42 CFR part 419, subpart K (“subpart K”); (2) the determination of payment amounts under proposed subpart K; and (3) the requirements of proposed subpart K.
After consideration of the public comment we received, we are finalizing our proposal, without modification, to codify, at § 419.94, the preclusion of administrative or judicial review under section 1869 of the Act, section 1878 of the Act, or otherwise of (1) the determination of whether an REH meets the requirements established by proposed subpart K; (2) the determination of payment amounts under proposed subpart K; and (3) the requirements of proposed subpart K.
In addition to proposing to codify the requirements of section 1861(kkk) and 1834(x) of the Act at 42 CFR part 419 as described above, we proposed to make conforming changes to 42 CFR part 410, which describes the origin and destination requirements for the coverage of ambulance services, and 42 CFR part 413, which specifies principles of reasonable cost reimbursement.
Section 1861(s)(7) of the Act establishes an ambulance service as a Medicare Part B service where the use of other methods of transportation is contraindicated by the individual's condition, but only to the extent provided in regulations. The House Ways and Means Committee and Senate Finance Committee Reports that accompanied the 1965 Social Security Amendments suggests that the Congress intended:
• The ambulance benefit cover transportation services only if other means of transportation are contraindicated by the beneficiary's medical condition; and
• Only ambulance service to local facilities be covered unless necessary services are not available locally, in which case, transportation to the nearest facility furnishing those services is covered (H.R. Rep. No. 213, 89th Cong., 1st Sess. 37 and Rep. No. 404, 89th Cong., 1st Sess. Pt 1, 43 (1965)).
The reports indicate that transportation may also be provided from one hospital to another, to the beneficiary's home, or to an extended care facility. Since April 1, 2002, payment for ambulance services is made under the ambulance fee schedule (AFS), which the Secretary established under section 1834(l) of the Act.
We have established regulations at § 410.40 that govern Medicare coverage of ambulance services. Under § 410.40(e)(1), Medicare Part B covers ground (land and water) and air ambulance transport services only if they are furnished to a Medicare beneficiary whose medical condition is such that other means of transportation are contraindicated. The beneficiary's condition must require both the ambulance transportation itself and the level of service provided for the billed services to be considered medically necessary. The origin and destination requirements for coverage of ambulance services are addressed in our regulations at § 410.40(f).
Section 125 of the Consolidated Appropriations Act, 2021, added section 1834(x)(3) of the Act for payment for ambulance services. Specifically, newly added section 1834(x)(3) of the Act states: “For provisions relating to payment for ambulance services furnished by an entity owned and operated by a rural emergency hospital, see section 1834(l) of the Act.” Accordingly, the statute makes clear that the ambulance provisions under section 1834(l) of the Act apply to REHs that owns and operates an ambulance transportation in the same manner that they do for other ambulance providers and suppliers that receive AFS payment for ambulance services. The previous section includes a discussion about this provision, including CMS's proposal, consistent with section 1834(x)(3) of the Act, to codify, at 42 CFR 419.92(c)(1), that an entity that is owned and operated by an REH that provides ambulance services will receive payment for such services under the ambulance fee schedule as described in section 1834(l) of the Act.
The REH is an appropriate destination for an ambulance transport if furnished to a Medicare beneficiary whose medical condition is such that other means of transportation are contraindicated. the beneficiary's condition must require both the ambulance transportation itself and the level of service provided for the billed services to be considered medically necessary. We proposed to revise our regulations at § 410.40(f) to include REH as a covered origin and destination for ambulance transport.
There are several different types of ambulance providers and suppliers that are enrolled in Medicare and furnished ambulance services payable under the AFS, such as a hospital provider. We proposed that an REH that owns and operates an ambulance transportation may enroll in Medicare as an ambulance provider and receive payment under the AFS if all coverage and payment requirements are met.
We invited comments on our proposals to include REHs as a covered origin and destination for ambulance transport under the AFS and that an REH that owns and operates an ambulance transportation may enroll in Medicare as an ambulance provider and receive payment under the AFS if all coverage and payment requirements are met.
The second recommended subsection does not include REHs, and is out of scope because we didn't propose any new ambulance coverage requirements for hospital-to-SNF transports. This recommended subsection seems to circumvent the nearest appropriate facility requirement if the beneficiary gets ill and is hospitalized not near the beneficiary's home. Under the AFS, Medicare Part B covers ambulance services furnished to a Medicare beneficiary that meet the following requirements: There is medically necessary transportation of the beneficiary to the nearest appropriate facility that can treat the patient's condition and any other methods of transportation are contraindicated, meaning that traveling to the destination by any other means would endanger the health of the beneficiary. The beneficiary's condition must require both the ambulance transportation itself and the level of service provided in order for the billed service to be considered medically necessary.
After consideration of the public comments we received, and for the reasons stated here and in the proposed rule, we are finalizing our proposals to revise our regulations at § 410.40(f) to include an REH as a covered origin and destination for ambulance transport under the AFS, and that an REH that owns and operates an ambulance transportation may enroll in Medicare as an ambulance provider and receive payment under the AFS if all coverage and payment requirements are met.
We also proposed to make conforming changes to the regulation text specifying principles of reasonable cost reimbursement in 42 CFR part 413 to incorporate references to REHs. Specifically, we proposed to modify § 413.1(a)(1)(ii) by adding paragraph (a)(1)(ii)(L), to state that section 1834(x) of the Act authorizes payment for services furnished by REHs and establishes the payment methodology. We also proposed to modify § 413.1(a)(2)(i) to add REHs to the listing of provider types covered by the regulations in 42 CFR part 413. Additionally, we proposed to amend § 413.13(c)(2) by adding paragraph (c)(2)(vii) to the listing of services not subject to the lesser of costs or charges principle, to specify that services furnished by REHs are subject to the payment methodology set forth in part 419, subpart K.
Furthermore, we proposed to amend § 413.24(f)(4)(i) to specify that an REH is required to file annual cost reports, and to amend § 413.24(f)(4)(ii) to specify that effective for cost reporting periods beginning on or after January 1, 2023, REHs are required to submit their cost reports in a standardized electronic format. Finally, we proposed to amend § 413.24(f)(4)(iv)(A), which requires providers to submit a hard copy of a settlement summary, if applicable, and the certification statement described in § 413.24(f)(4)(iv)(B), by adding paragraph (f)(4)(iv)(A)(5) to state that for REHs, these requirements are effective for cost reporting periods beginning on or after January 1, 2023.
We did not receive any public comments on our proposal and, therefore, we are finalizing, without modification, our proposed conforming revisions to 42 CFR 413.1, 413.13, and 413.24.
Section 125 of Division CC of the Consolidated Appropriations Act, 2021 (CAA) added a new section 1861(kkk) to establish REHs as a new Medicare provider type to address Congress's growing concern over closures of rural hospitals. According to a report by the United States Government Accountability Office published in 2020, over 100 rural hospitals closed from January 2013-February 2020 (Rural Hospital Closures: Affected Residents Had Reduced Access to Health Care Services; GAO-21-93,
We published a Request for Information (RFI) for REHs in the CY 2022 OPPS/ASC proposed rule (86 FR 42018, 42285) on August 4, 2021, and used this information to inform development of the REH health and safety, payment, quality measures, and enrollment policies. The proposed health and safety standards (that is, the Conditions of Participation) for REHs were published in the
This final rule incorporates by reference the NFPA 101® 2012 edition of the Life Safety Code (LSC), issued August 11, 2011, and all Technical Interim Amendments (TIA) issued prior to April 16, 2014; the NFPA 99® 2012 edition of the Health Care Facilities Code, issued August 11, 2011; NFPA 110® 2010 edition of the Standard for Emergency and Standby Power Systems, issued August 6, 2009; and all TIA issued prior to April 16, 2014. This includes: (1) NFPA 101, LSC, 2012 edition, issued August 11, 2011; (i) TIA 12-1 to NFPA 101, issued August 11, 2011; (ii) TIA 12-2 to NFPA 101, issued October 30, 2012; (iii) TIA 12-3 to NFPA 101, issued October 22, 2013; (iv) TIA 12-4 to NFPA 101, issued October 22, 2013; (2) NFPA 99, Health Care Facilities Code, 2012 edition, issued August 11, 2011; (i) TIA 12-2 to NFPA 99, issued August 11, 2011; (ii) TIA 12-3 to NFPA 99, issued August 9, 2012; (iii) TIA 12-4 to NFPA 99, issued March 7, 2013; (iv) TIA 12-5 to NFPA 99, issued August 1, 2013; (v) TIA 12-6 to NFPA 99, issued March 3, 2014; and (3) NFPA 110® 2010 edition of the Standard for Emergency and Standby Power Systems, issued August 6, 2009, including TIAs to Chapter 7, issued August 6, 2009. A summary of these standards incorporated by reference can be found in sections XVIII.B.1.a.(21) and XVIII.B.1.a.(22) of this rule. The materials we incorporate by reference are available to interested parties and can be inspected at the CMS and the National Archives and Records Administration (NARA). Contact CMS at: CMS Information Resource Center, 7500 Security Boulevard, Baltimore, MD, email:
The comments and our responses to those comments are set forth below.
We proposed to add a new subpart E in 42 CFR part 485, to incorporate the REH CoPs. Proposed subpart E would include all the health and safety standards for REHs. Overall, the proposed requirements were modeled closely after the CoPs for CAHs. In some instances, we have also proposed requirements that are similar to the CoPs for hospitals and CfCs for Ambulatory Surgical Centers (ASCs). In each of the sections below, we specify the existing requirements for CAHs,
We proposed to set forth the basis and scope of part 485, subpart E, at § 485.500. As previously noted, proposed part 485, subpart E, would implement section 1861(kkk) of the Act, which establishes the requirements that an REH must meet in order to participate in the Medicare program. Section 1833(a) of the Act serves as the basis for the establishment of payment of benefits covered under Medicare for REHs.
Technical assistance (TA) is available to hospitals and CAHs seeking REH designation from the Health Resources and Services Administration's REH TA Center. The REH TA Center, which has been awarded to the Rural Health Redesign Center (
We did not receive any public comments on our proposal and therefore, we are finalizing this provision as proposed.
At § 485.502, we proposed to define certain terms that would be used throughout the REH CoPs. We proposed to define the term “Rural Emergency Hospital or REH” in accordance with the definition set forth in section 1861(kkk) of the Act. In accordance with the Act, we proposed to define “Rural Emergency Hospital or REH” as an entity that operates for the purpose of providing emergency department services, observation care, and other outpatient medical and health services specified by the Secretary in which the annual per patient average length of stay does not exceed 24 hours. The REH must not provide inpatient services, except those furnished in a unit that is a distinct part licensed as a skilled nursing facility to furnish post-REH or post-hospital extended care services.
After consideration of the public comments we received, we are finalizing § 485.502 with modifications. We are revising § 485.502 by incorporating the methodology used to determine the annual per patient average length of stay for the REH.
At § 485.504, we proposed to set forth the basic requirements for REHs in accordance with section 1861(kkk) of the Act. Participating REHs would be limited to those facilities that meet the definition in proposed § 485.502 and have in effect a provider agreement as defined at 42 CFR 489.3. This final rule adds REHs to the list of providers required to obtain a provider agreement at § 489.2(b) in the “Conforming Amendments and Technical Corrections” section of this rule.
We did not receive any public comments on our proposal and therefore, we are finalizing our proposal.
At § 485.506, we proposed to set forth the criteria for CMS certification of an REH in accordance with section 1861(kkk) of the Act. We proposed to establish that CMS would certify a facility as an REH if the facility was, as of the date of enactment of the CAA, a CAH, or a hospital as defined in section 1886(d)(1)(B) of the Act with not more than 50 beds located in a county (or equivalent unit of local government) considered rural (as defined in section 1886(d)(2)(D) of the Act), or treated as being located in a rural area pursuant to section 1886(d)(8)(E) of the Act. In addition, to be treated as being located in a rural area for the purpose of REH eligibility, we proposed that a hospital located in a metropolitan county that applies to be an REH must have had an active reclassification from urban to rural status, as specified in section 42 CFR 412.103, as of December 27, 2020.
After consideration of the public comments we received, we are finalizing § 485.506 as proposed.
Consistent with the requirements for all Medicare- and Medicaid-participating providers and suppliers, we proposed to require REHs to comply with Federal, state, and local laws and regulations. At § 485.508(a), we proposed to require the REH to be in compliance with applicable Federal laws, state, and local laws and regulations. In accordance with section 1861(kkk)(5) of the Act, we also proposed to require at § 485.508(b) that the REH be located in a state that provides for the licensing of such hospitals under state or applicable local law. In addition, under § 485.508(b)(1) and (2), we proposed that the REH be licensed in the state as an REH or be approved as meeting standards for licensing by the agency in the state or locality responsible for licensing hospitals. We note that in many instances, states and localities, have more stringent laws and regulations than the Federal requirements. In cases in which state law or regulations are more stringent, the REH would need to comply with the more stringent state or local requirements to meet the proposed requirements at § 485.508(a).
At § 485.508(c), we proposed to require that the REH ensure that personnel are licensed or meet other applicable standards required by state or local laws to provide services within their respective applicable scope of practice.
To ensure appropriate oversight of the REH, we proposed at § 485.510 to require the REH to have an effective governing body, or responsible individual or individuals, that is legally responsible for the conduct of the REH. This aligns with the CAH CoP for organizational structure at § 485.627(a). In addition to oversight, we expect the responsibilities of the governing body or responsible individual to include ensuring that the REH is effectively executing its policies and decision-making about the REH's vision, mission, and strategies. If an REH does not have an organized governing body, we proposed to require that the person or persons legally responsible for the conduct of the REH carry out the functions specified in this part that pertain to the governing body.
Consistent with the hospital governing body CoPs at § 482.12, we proposed at § 485.510(a)(1) to require the governing body, in accordance with state law, to determine which categories of practitioners are eligible candidates for appointment to the medical staff. Additionally, consistent with the interpretive guidelines for CAHs in Appendix W of the State Operations Manual for the standard for
Many rural populations suffer from limited access to care due to a shortage of health care professionals, especially physicians. Often, clinicians other than physicians provide important care services to rural communities with physicians providing oversight. This may occur in different ways, including via the use of mobile health, video and audio technologies, digital photography and remote patient monitoring. With the development of technology that facilitates “telemedicine,” a physician could utilize a variety of methods to provide health care services, including being on-site at a facility or at a distant site furnishing services remotely to a patient located at an originating site.
Commenters on the REH RFI noted that REHs should be able to act as an originating site (that is, the location where a Medicare patient receives medical services from a physician or other clinician through a telecommunications system) for the provision of telehealth services. As noted in the CY 2022 Medicare Physician Fee Schedule final rule (86 FR 65057), section 125(c) of the CAA amended section 1834(m)(4)(C)(ii) of the Act to add REHs to the list of permissible telehealth originating sites. In accordance with section 1834(m)(4)(C)(ii)(XI) of the Act, as added by section 125(c) of the CAA, we have already finalized a revision to § 410.78(b)(3) of our regulations to add REH, as defined in section 1861(kkk)(2) of the Act, as a permissible originating site for telehealth services furnished on or after January 1, 2023.
For the purposes of this rule, similar to our interpretation in the policy set out in our 2011 final rule, “Medicare and Medicaid Programs; Changes Affecting Hospital and Critical Access Hospital Conditions of Participation: Telemedicine Credentialing and Privileging” (76 FR 25550, May 5, 2011), we see telemedicine as encompassing the overall delivery of health care to the patient through the practice of patient assessment, diagnosis, treatment, consultation, transfer and interpretation of medical data, and patient education all via a telemedicine link (for example, audio, video, and data telecommunications as may be utilized by distant-site physicians and practitioners). Therefore, in order to make clear that the credentialing and privileging provisions proposed for REHs were not limited to the narrower subset of services and sites eligible for Medicare telehealth payment, we chose to use the term, “telemedicine,” throughout this rule instead of “telehealth.” As noted previously, payment policies for REHs, including for services furnished via telehealth/telemedicine, will be addressed in separate notice and comment rulemaking.
In recognition of the important role that telemedicine can play in the provision of care in rural communities, we believe it is necessary to establish a more efficient process for REHs to credential and privilege clinicians who provide telemedicine services for the REH's patients. We proposed requirements similar to the telemedicine credentialing and privileging process requirements established for hospitals and CAHs that would allow for an optional and more streamlined credentialing and privileging process that REHs may use for practitioners providing telemedicine services for their patients. We believe that REHs might lack the resources to fully carry out the traditional credentialing and privileging process for all of the physicians and practitioners that may be available to provide telemedicine services. Small hospitals and CAHs seeking to provide enhanced access to care through the use of telemedicine services for their patients have already encountered this issue. In addition to the costs and administrative staff needed for this process, REHs would also most likely not have in-house medical staff with the clinical expertise to adequately evaluate and privilege the wide range of specialty physicians that larger hospitals can provide their patients through the use of telemedicine services.
Therefore, at § 485.510(a)(8) we proposed that the REH's governing body ensure that when telemedicine services are furnished to the REH's patients through an agreement with a Medicare-participating hospital (the “distant-site”—the site at which the physician or practitioner is located at the time the service is provided via a communications system, as defined at section 1834(m)(4)(A) of the Act), the agreement must specify that the governing body of the distant-site hospital providing the telemedicine services must meet the requirements in § 485.510(a)(1) through (7) with regard to its physicians and practitioners who are providing telemedicine services. These provisions cover the distant-site hospital's governing body responsibilities for its medical staff that all Medicare-participating hospitals must currently meet and that REHs would be required to meet when this rule is finalized. The proposed requirements at § 485.510(a)(8) would allow the governing body of the REH whose patients are receiving the telemedicine services to grant privileges based on the recommendations of its medical staff, who would rely on information provided by the distant-site hospital, as a more efficient means of privileging the individual distant-site physicians and practitioners. This provision would be accompanied by the proposed requirement in the “Medical staff” CoP at § 485.510(a), which would provide the basis on which the REH's governing body, through its agreement as noted above, can choose to have its medical staff rely upon information furnished by the distant-site hospital when making recommendations on privileges for the individual physicians and practitioners providing such services. This option would not prohibit an REH's medical staff from continuing to perform its own periodic appraisals of telemedicine members of its staff, nor would it bar them from continuing to use the proposed traditional credentialing and privileging process proposed at § 485.512(a)(2). The intent of this proposed requirement is to relieve burden for REHs by providing for a less duplicative and more efficient privileging scheme with regard to physicians and practitioners providing telemedicine services. However, in an effort to ensure accountability to the process, we also proposed at (§ 485.512(a)(3) that the REH, in order to choose this less burdensome option for privileging, would have to ensure that (1) the distant-site hospital providing the telemedicine services was a Medicare-participating hospital; (2) the individual distant-site physician or practitioner was privileged at the distant-site hospital providing telemedicine services, and that this distant-site hospital provided a current list of the physician's or practitioner's privileges; (3) the individual distant-site physician or practitioner held a license issued or recognized by the state in which the REH, whose patients are receiving the telemedicine services, was located; and (4) with respect to a distant-site physician or practitioner granted privileges by the REH, the REH had evidence of an internal review of the distant-site physician's or practitioner's performance of these privileges and send the distant-site hospital this information for use in its periodic appraisal of the individual
Similar to the revisions we made in the “Changes Affecting Hospital and Critical Access Hospital Conditions of Participation” final rule (76 FR 25556), we also concluded that it would be important that the medical staff of a distant-site telemedicine entity, which might not be a Medicare-participating hospital, also be included in an optional and streamlined credentialing and privileging process for those REHs electing to enter into agreements for telemedicine services with such entities. However, similar to the situation we faced for hospitals and CAHs in the May 2011 final rule (that is, the inclusion of distant-site telemedicine entities into this streamlined process without CMS having any regulatory or oversight authority over them, we realized that the proposed requirements for REHs would need to hold distant-site telemedicine entities accountable to the originating-site REH for meeting CMS practitioner credentialing and privileging standards. And like the current requirements for hospitals and CAHs using telemedicine services, REHs would need to provide, upon request when surveyed, the most current telemedicine services agreement showing that the distant-site entities providing the services were required to comply with the CMS standards (even though CMS has no direct authority over those entities) in order for the REH to make use of the more streamlined process when credentialing and privileging practitioners from these distant-site telemedicine entities. Similar to our regulations proposed for REHs using the telemedicine services of distant-site Medicare-participating hospitals, the written agreement between the REH and the distant-site telemedicine entity would be the foundation for ensuring accountability on both sides. However, due to the differences already discussed between Medicare-participating distant-site hospitals providing telemedicine services and distant-site practitioners under section 1834(m) of the Act providing similar services, there would also have to be differences in the way the regulations were written.
Therefore, we also proposed requirements that would apply to the credentialing and privileging process and the agreements between REHs and distant-site telemedicine entities (§§ 485.510(a)(9) and 485.512(a)(4)). These provisions would require the governing body of the REH (or responsible individual), through its written agreement with the distant-site telemedicine entity, to ensure that the distant-site telemedicine entity, acting as a contractor of services, furnished its services in a manner that would enable the REH to comply with all applicable CoPs and standards. For the contracted services, the applicable CoPs and standards would include, but are not limited to, the credentialing and privileging requirements for distant-site physicians and practitioners furnishing telemedicine services.
After consideration of the public comments we received, we are finalizing these provisions as proposed.
Consistent with the CAH CoPs at § 485.635(a)(1), we proposed at § 485.514(a) to require that the REH's health care services be furnished in accordance with appropriate written policies consistent with applicable state law and at § 485.514(b) that the REH must have policies that are developed with the advice of members of the REH's professional health care staff, including one or more doctors of medicine or osteopathy and one or more physician assistants, nurse practitioners, or clinical nurse specialists, if they are on staff (as defined at § 485.528(b)(1)). This requirement would align with the CAH CoPs at § 485.635(a)(2).
At § 485.514(c) we proposed requirements for the written policies to include a description of the services the REH furnishes (including those furnished through agreement or arrangement), policies and procedures for emergency medical services, guidelines for the medical management of health problems, and policies and procedures that address the post-acute care needs of all patients receiving services furnished by an REH. Because the statute prohibits REHs from providing of inpatient services (with the exception of patients receiving SNF services in a distinct part SNF), post-acute care for an REH patient is any care the REH patient receives once they are discharged from the REH. Lastly, at § 485.514(d), we proposed to require the
In accordance with section 1861(kkk)(2)(D)(iv) of the Act, REHs must comply with the CAH emergency services requirements at § 485.618 as well as the hospital emergency services requirements, which are located at § 482.55, as determined to be applicable. As such, at § 485.516 we proposed to require that the REH must provide the emergency care necessary to meet the needs of its patients in accordance with acceptable standards of practice.
Additionally, because the primary function of an REH is to provide emergency services, we proposed at § 485.516(a) that the REH must have emergency services that are organized under the direction of a qualified member of the medical staff and are integrated with other departments of the REH, similar to the requirements for hospitals. We anticipate that there will be instances in which a patient is receiving outpatient services other than emergency services and may unexpectedly require care in the emergency department. In this instance, having emergency services that are integrated with the other departments of the REH will facilitate care coordination and promote patient-centered care.
At § 485.516(b), we proposed that there be adequate medical and nursing personnel qualified in emergency care to meet the needs of the facility. To comply with this requirement, we would expect the REH to conduct an analysis based on the anticipated staffing needs and once the REH begins to provide services, the analysis would include actual staffing needs. Lastly, at § 485.516(c), we proposed to require the REH to provide emergency services that meet the CAH requirements specified at § 485.618(a) through (e), as required by section 1861(kkk)(2)(D)(iv)(I) of the Act.
After consideration of the public comments we received, we are finalizing § 485.516 as proposed.
We proposed at § 485.518 that REHs, similar to CAHs (§ 485.635(b)(2)), would be required to provide basic laboratory services essential to the immediate diagnosis and treatment of the patient. The CAH requirements cite specific laboratory services that should be provided by the CAH, such as chemical examination of urine, hemoglobin or hematocrit, blood glucose, examination of stool specimens for occult blood, pregnancy tests, and primary culturing for transmittal to a certified laboratory. However, we believe that given the REH's nature of primarily providing emergency services, it is appropriate that REHs provide laboratory services that are consistent with nationally recognized standards of care for emergency services. In addition to the laboratory services identified in the CAH CoPs, we encourage the REH to provide laboratory services that include a complete blood count, basic metabolic panel (also known as a “chem 7”), magnesium, phosphorus, liver function tests, amylase, lipase, cardiopulmonary tests (troponin, brain natriuretic peptide, and d-dimer), lactate, coagulation studies (prothrombin time, partial thromboplastin time, and international normalized ratio), arterial blood gas, venous blood gas, quantitative human chorionic gonadotropin, and urine toxicology. In accordance with the Clinical Laboratory Improvement Amendments of 1988 (CLIA), at § 485.518(a), we proposed to require that the REH must ensure that all laboratory services provided to its patients are performed in a facility certified in accordance with the CLIA requirements at 42 CFR part 493. Furthermore, at § 485.518(b) we proposed that REHs must have emergency laboratory services available that would be essential to the immediate diagnosis of the patient, 24 hours a day. This proposal is appropriate given the provision that REHs must provide emergency services 24 hours a day.
After consideration of the public comments we received, we are finalizing this provision with modification by incorporating language into the requirement at § 485.518 that specifically notes that the laboratory services must be consistent with the patient population and services offered.
Radiologic services play an integral role in the provision of emergency services. Commenters on the REH RFI noted that radiologic services, also referred to as imaging services, should be provided at REHs. A study in the American Journal of Roentgenology noted that, “The use of imaging in the emergency department (ED) has increased over time, and by 2010 nearly half of all ED visits in the U.S. included at least one imaging test.” These imaging tests include computed tomography (CT), also known as a computerized axial tomography (CAT) scan, magnetic resonance imaging (MRI), and ultrasound. These tests can be used to diagnose bone fractures, infections, arthritis, injuries from trauma, tumors and cancers. They can also be used to monitor and evaluate the growth and development of a fetus, and offer a way to examine many of the body's internal organs such as the liver, gallbladder, kidneys, and bladder.
We expect that REHs will need to provide radiologic services given their focus on emergency services and given the number of emergency department patients who receive imaging services. Therefore, we proposed that the REH radiologic requirements mirror the hospital radiologic requirements found at § 482.26, which is consistent with the current CAH standard at § 485.635(b)(3) and interpretative guidelines for CAHs in Appendix W of the State Operations Manual (SOM).
The CAH standard for radiology services found at § 485.635(b)(3) requires that these services be furnished by personnel qualified under state law, and that such services do not expose patients or staff to radiation hazards. In addition, we note that the interpretative guidelines for § 485.635(b)(3) in Appendix W of the SOM provides guidance for designating qualified radiologic personnel, developing policies and procedures that ensure safety from radiation hazards, inspecting and maintaining radiologic equipment, and maintaining CAH radiology records.
We proposed to align the REH requirements with the hospital requirements for radiologic services and proposed additional standards related to safety, personnel responsibilities, and record keeping. We believe that facilities that transition to an REH would need to perform these activities to support the delivery of radiology services. We also believe that these proposed requirements are in accordance with the interpretative guidelines that CAHs currently follow for the provision radiological services. We do not expect these requirements to create additional burden for REHs over those applicable to CAHs.
As such, at § 485.520, we proposed to require that the REH provide diagnostic radiologic services. At § 485.520(a), we proposed to require that all radiologic services furnished by the REH be provided by qualified personnel in accordance with state law; such services could expose REH patients or personnel to radiation hazards. As with hospitals, we also proposed to require that the REH must have radiologic services that meet the needs of their patients. For example, we expect an REH that is located in a mining community to offer x-ray services due to the effects of mining on one's lungs or an REH being able to furnish ultrasounds to evaluate the growth and health of a fetus.
At § 485.520(b), we proposed basic factors relating to safety hazard standards for patients and personnel by specifying that the REH must institute proper safety precautions, perform periodic inspections of equipment, periodically check radiation workers for exposure, and only provide radiologic services based on the order of practitioners with clinical privileges or authorization by the medical staff and governing body. We proposed the personnel standard at § 485.520(c) to require that a qualified radiologist, or other personnel qualified under state law either full-time, part-time, or on a consulting basis interpret radiologic tests that require specialized knowledge. This requirement can be fulfilled through arrangements with off-site providers via telehealth. Like hospitals, we proposed that the radiologist in an REH must sign reports only of their interpretations. We proposed to allow the medical staff and the individual responsible for radiological services to designate who is qualified to use radiological equipment. Lastly, at § 485.520(d), we also proposed to require that records of departmental activities be maintained and that radiological reports and films be preserved for 5 years, consistent with the proposed requirements for the maintenance and retention of the REH medical records.
After consideration of the public comments we received, we are finalizing as proposed.
While the current CAH requirements do not have a separate CoP for pharmaceutical services, there are standards throughout the CAH CoPs for the oversight, storage, and administration of drugs and biologicals. Regulations at § 485.623(b)(3) requires the CAH to store drugs and biologicals properly, and § 485.635(a)(3)(iv) requires the CAH to develop rules for the storage, handling, dispensation, and administration of drugs and biologicals including a drug storage area administered in accordance with accepted principles. In addition, there are standards throughout the CAH CoPs regarding provisions for infection prevention and control and antibiotic stewardship programs that reference pharmacy leadership and pharmacy services. Therefore, we believe that CAHs and hospitals that transition to an REH would already be in compliance with REH requirements to support the delivery of pharmaceutical services; we do not expect these requirements to create additional burden for REHs.
At § 485.522, we are requiring that the REH's pharmaceutical services meet the needs of the patients. According to the American Society of Health-System Pharmacists Guidelines on Emergency Medicine Pharmacy Services, some factors that an ED is expected to consider when determining how the pharmaceutical services can best meet the needs of the patients include the type and setting of the ED (for example, academic, community, urban, or rural), the size of the ED, the number of annual visits, the patient population served, and any specialty services available. At § 485.522(a), we proposed to require the REH to have a pharmacy or drug storage area administered in accordance with accepted professional principles and state and Federal laws. Additionally, we proposed to require at § 485.522(a)(1) that a registered pharmacist or other qualified individual in accordance with state scope of practice laws direct the pharmaceutical services or, when appropriate, have a drug storage area that is supervised by an individual who is competent to do so. Rural communities are often challenged by the lack of pharmacists willing to move to rural areas and for this reason, we recognize that there may be REHs that can provide pharmaceutical services only by having a drug storage area that is under the supervision of a qualified individual. In these instances, the facility must establish qualifications for the individual with oversight of the drug storage area for competency purposes and ensure that someone who meets those requirements is fulfilling the role. This is consistent with the interpretive guidelines for the CAH CoPs contained in Appendix W of the SOM for § 485.635(a)(3). We proposed that this individual be available for a sufficient time to provide such oversight based on the scope and complexity of the services offered at the REH. This individual would not be required to be a full-time pharmacist. We believe that requiring “sufficient time” in the regulatory language provides the REH with the flexibility to determine how frequently the pharmacist or other qualified individual is available.
In addition, the CAH interpretive guidelines for § 485.635(a)(3) state that the compounding, packaging, and dispensing of drugs should be consistent with accepted professional principles. In accordance with guidance issued by the Food and Drug Administration, accepted professional principles for compounding, packaging, and dispensing of drugs include having a licensed pharmacist, or in some cases a physician, perform these activities (or having them performed under the supervision of a licensed pharmacist, when appropriate) (
Lastly, at § 485.522(c), we proposed to set forth the standards for the administration of drugs. We note that the existing CAH CoP at § 485.635(a)(3)(iv) requires that the CAH have written policies that include the rules for the storage, handling, dispensation, and administration of drugs and biologicals. The CAH CoPs continue to require that these rules provide that there is a drug storage area that is administrated in accordance with accepted professional principles. Similarly, we proposed to require that drugs be prepared and administered in an REH according to established policies and acceptable standards of practice and consistent with the CAH requirement at § 485.635(a)(3)(v), we proposed to require that any adverse reactions be reported to the physician responsible for the patient and documented in the record. While the CAH CoPs require that the CAH have procedures for reporting adverse drug reactions and errors in the administration of drugs, we recognize that a nationally recognized standard of practice is to report adverse drug reactions to the physician responsible for the care of the patient. We proposed, that the REH be required to administer blood transfusions, blood products and intravenous medications in accordance with state law and approved medical staff policies and procedures, and that orders given orally for drugs and biologicals be followed by a written order, signed by the prescribing physician or other authorized prescriber at § 485.522(c)(2) and (3) respectively. We also proposed at § 485.522(c)(4) to require that the REH have a procedure for reporting transfusion reactions, adverse drug reactions, and errors in administration of drugs.
After consideration of the public comments we received, we are finalizing § 485.522 as proposed.
We proposed at § 485.524 that if the REH chooses to provide additional outpatient medical and health services, that the services would be required to be appropriately organized and to meet the needs of the patients in accordance with acceptable standards of practice. Additionally, at § 485.524(a)(1) we proposed to require that the provision of the additional service be based on nationally recognized guidelines and standards of practice, aligning the proposed requirement with the hospital CoPs for outpatient services at § 482.54. Given that the REH does not provide inpatient services, patients requiring a higher level of care would be required to be transferred to an acute care hospital or CAH. As a result of this, and based on comments received on the REH RFI, we further proposed to require that the REH have a system in place for referral from the REH to different levels of care, including follow-up care, as appropriate. Some of the REH RFI comments also indicated that REHs should be required to have established relationships with hospitals that have the resources and capacity available to deliver care that is beyond the scope of care delivered at the REH. Hospital admissions and transfers account for roughly 20 percent of all patient dispositions from emergency departments across the U.S. As a result, we can expect that REHs will transfer at least 20 percent of their patients; we agreed with commenters and proposed to require that REHs have established relationships with hospitals that have the resources and capacity available to deliver care beyond the scope delivered at the REH.
Ensuring effective communication between providers of health care services and patients and their family is a critical element in the provision of care and the discharge or transfer of patients. We proposed to require that the REH have effective communication systems in place between the REH and patients (or responsible individuals) and their families, ensuring that the REH would be responsive to their needs and preferences. We believe this will assist with effective care coordination as well as improved patient outcomes.
At § 485.524(b), we proposed personnel requirements for REHs that choose to provide additional outpatient medical and health services. These requirements ensure that the additional services provided by the REH are overseen by at least one responsible individual, have appropriate professional and nonprofessional personnel available at each location where outpatient services are offered, and are provided by a physician or other clinician with experience and training in the specialty service area.
At § 485.524(c), we proposed to specify standards that REHs must have for ordering outpatient medical and health services; such standards would be consistent with the hospital requirements at 42 CFR 482.54(c). Specifically, we proposed to require outpatient medical and health services to only be ordered by a practitioner who: (1) is responsible for the care of the patient; (2) is licensed in the state where they provide care to the patient; (3) is acting within their scope of practice under state law; and (4) is authorized in accordance with state law and policies adopted by the medical staff, and approved by the governing body, to order the applicable outpatient services. We also proposed that these requirements would apply to those practitioners who are appointed to the REH's medical staff and who have been granted privileges to order the applicable outpatient services; and those practitioners not appointed to the medical staff, but who satisfy the above criteria for authorization by the REH for ordering the applicable outpatient services and for referring patients for such services.
Lastly, the importance of allowing REHs to provide outpatient surgical services was especially noted by commenters in response to the REH RFI. A 2011 rural policy brief by the Rural Policy Research Institute (RUPRI) Center for Rural Health Policy Analysis states that, “Like residents of any community, rural residents have surgical needs that range from the predictable (for example, cataract procedures) to the emergent (for example, appendectomy). Innovations in surgery over the past several decades have made possible the provision of many surgical procedures on an outpatient basis, reducing inpatient admissions.”
Given that in accordance with the statutory provision at section1861(kkk)(1)(A) of the Act services furnished by the REH must not exceed an annual per patient average of 24 hours in the REH, we expect REHs, like ASCs, to provide surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following an admission.
• The governor has consulted with State Boards of Medicine and Nursing about issues related to access to and the quality of anesthesia services in the State, and
• The governor has concluded that it is in the best interests of the State's citizens to opt-out of the current physician supervision requirement, and that the opt-out is consistent with State law.
Lastly, please note the provision of surgical services are optional for REHs and are not are required service in accordance with the CAA.
After consideration of the public comments we received, we are finalizing § 485.524 as proposed.
Similar to the requirements that we finalized with regard to infection prevention and control and antibiotic stewardship programs for hospitals and CAHs in the September 30, 2019 final rule “Medicare and Medicaid Programs; Regulatory Provisions To Promote Program Efficiency, Transparency, and Burden Reduction; Fire Safety Requirements for Certain Dialysis Facilities; Hospital and Critical Access Hospital (CAH) Changes To Promote Innovation, Flexibility, and Improvement in Patient Care” (84 FR 51732), we proposed in this rule that each REH has facility-wide infection prevention and control and antibiotic stewardship programs that are coordinated with the REH quality assessment and performance improvement (QAPI) program, for the surveillance, prevention, and control of HAIs and other infectious diseases and for the optimization of antibiotic use through stewardship. Further, we proposed in this rule at § 485.526(a)(1) that the REH ensure that an individual (or individuals), who are qualified through education, training, experience, or certified in infection, prevention and control, are appointed by the governing body, or responsible individual, as the infection preventionist(s)/infection control professional(s) responsible for the infection prevention and control program at the REH and that the appointment is based on the recommendations of medical staff and nursing leadership.
At § 485.526(a)(2), we proposed that the infection prevention and control program, as documented in its policies and procedures, employ methods for preventing and controlling the transmission of infections within the REH and between the REH and other health care settings. The program, as documented in its policies and procedures, would have to employ methods for preventing and controlling the transmission of infection within the REH setting (for example, among patients, personnel, and visitors) as well as between the REH (including outpatient services) and other institutions and health care settings. At § 485.526(a)(3) we proposed that the infection prevention and control program include surveillance, prevention, and control of HAIs, including maintaining a clean and sanitary environment to avoid sources and transmission of infection, and that the program also address any infection control issues identified by public health authorities. We proposed at § 485.526(a)(4) that the infection prevention and control program reflect the scope and complexity of the services provided by the REH.
At § 485.526(b), we proposed to set standards for the organization and policies of the antibiotic stewardship
The provisions at § 485.526(b)(3) and (4) would require the REH to ensure that the antibiotic stewardship program adhered to nationally recognized guidelines, as well as best practices, for improving antibiotic use, and that the REH's stewardship program reflects the scope and complexity of services offered. We believe these proposed requirements are necessary to promote a facility-wide culture of quality improvement. We reiterate that these requirements mirror the hospital and CAH requirements for infection prevention and control and antibiotic stewardship and we note that in the proposed rule for those requirements, published on June 16, 2016 (81 FR 39455), our intention to build flexibility into the regulation by requiring hospitals to demonstrate adherence to nationally recognized guidelines rather than any specific guideline or set of guidelines for infection prevention and control and for antibiotic stewardship. While the CDC guidelines represent one set, there are other sets of nationally recognized guidelines from which facilities might choose, such as those established by the Society for Healthcare Epidemiology of America and the Infectious Diseases Society of America. We believe this approach will provide hospitals the flexibility they need to select and integrate those standards that best suit their individual infection prevention and control and antibiotic stewardship programs. We also believe this approach will allow hospitals the flexibility to adapt their policies and procedures in concert with any updates in the guidelines they have elected to follow. This rationale applies to REHs.
We require that the governing body or responsible individual ensure that the infection prevention and control issues identified by the infection prevention and control professionals be addressed in collaboration with REH leadership. Therefore, at § 485.526(c)(1)(i) and (ii), we proposed certain requirements that the governing body or responsible individual must adhere to including—
• Ensuring systems are in place and operational for the tracking of all infection surveillance, prevention, and control, and antibiotic use activities to demonstrate the implementation, success, and sustainability of such activities; and
• Ensuring all HAIs and other infectious diseases identified by the infection prevention and control program and antibiotic use issues identified by the antibiotic stewardship program are addressed in collaboration with REH QAPI leadership.
At § 485.526(c)(2)(i) through (vi), we proposed that the responsibilities of the infection prevention and control professionals would include the development and implementation of facility-wide infection surveillance, prevention, and control policies and procedures that adhere to nationally recognized guidelines. The infection preventionist(s)/infection control professional(s) would be responsible for all documentation, written or electronic, of the infection prevention and control program and its surveillance, prevention, and control activities.
Additionally, the infection preventionist(s)/infection control professional(s) would be responsible for the following—
• Communication and collaboration with the REH's QAPI program on infection prevention and control issues;
• Competency-based training and education of REH personnel and staff including professional health care staff and, as applicable, personnel providing services in the REH under agreement or arrangement, on the practical applications of infection prevention and control guidelines, policies and procedures;
• Prevention and control of HAIs, including auditing of adherence to infection prevention and control policies and procedures by REH personnel; and
• Communication and collaboration with the antibiotic stewardship program.
At § 485.526(c)(3), we proposed requirements for the leader(s) of the antibiotic stewardship program that are similar, but not identical, to the proposed responsibilities for the REH's designated infection preventionist(s)/infection control professional(s) at proposed § 485.526(c)(2). We believe that an REH's antibiotic stewardship program is the most effective means for ensuring appropriate antibiotic use. We also believe that such a program requires a leader who is responsible and accountable for its success. Therefore, we proposed that the leader of the antibiotic stewardship program would be responsible for the development and implementation of a facility-wide antibiotic stewardship program, based on nationally recognized guidelines, to monitor and improve the use of antibiotics. We do not expect that each new leader would develop a new antibiotic stewardship program, unless it is determined that a new program is necessary. We also proposed that the leader of the antibiotic stewardship program would be responsible for all documentation, written or electronic, of antibiotic stewardship program activities. The leader would also be responsible for communicating and collaborating with medical and nursing staff, pharmacy leadership, and the REH's infection prevention and control and QAPI programs, on antibiotic use issues.
We also proposed that the leader would be responsible for the competency-based training and education of REH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the REH, on the practical applications of antibiotic stewardship guidelines, policies, and procedures.
Similar to a standard in the hospital CoPs, we proposed a standard at § 485.526(d) for REHs that would allow for the governing body of an REH that is part of a system consisting of multiple, separately certified hospitals, CAHs, and/or REHs using a single system governing body that is legally responsible for the conduct of two or more hospitals, CAHs, and/or REHs, to elect to have unified and integrated infection prevention and control and antibiotic stewardship programs for all of its member facilities, including any REHs, after determining that such a decision is in accordance with all applicable state and local laws. We proposed a similar standard for CAHs at § 485.640(g). The system's single governing body would be responsible for ensuring that each of its separately certified REHs met the requirements of
• Were established in a manner that takes into account each member REH's unique circumstances and any significant differences in patient populations and services offered in each REH;
• Established and implemented policies and procedures to ensure that the needs and concerns of each of its separately certified REHs, regardless of practice or location, are given due consideration; and
• Had mechanisms in place to ensure that issues localized to particular REHs were duly considered and addressed.
The REH would also need to demonstrate that it had designated a qualified individual (or individuals) with expertise in infection prevention and control and in antibiotic stewardship at the REH to be responsible for:
• Communicating with the system's unified infection prevention and control and antibiotic stewardship programs;
• Implementing and maintaining the policies and procedures governing infection prevention and control and antibiotic stewardship as directed by the unified infection prevention and control and antibiotic stewardship programs; and
• Providing education and training on the practical applications of infection prevention and control and antibiotic stewardship to REH staff.
Finally, in response to the COVID-19 pandemic, on September 2, 2020, CMS published an interim final rule with comment period to track the incidence and impact of COVID-19 to assist public health officials in detecting outbreaks and saving lives (85 FR 54820). CMS then published a final rule with comment containing reporting requirements for hospitals and CAHs to report acute respiratory illness during the public health emergency (PHE) for COVID-19 (85 FR 86304) on December 4, 2020. Lastly, on November 5, 2021, CMS published an interim final rule with comment establishing COVID-19 vaccination requirements for most Medicare- and Medicaid-certified providers and suppliers (86 FR 61623). Consistent with the recent changes we made to the hospital and CAH infection control CoPs related to COVID-19 (87 FR 28108) and the declared PHE, we proposed the following three standards for REHs:
• Reporting of data related to viral and bacterial pathogens and infectious diseases of pandemic or epidemic potential, which would require an REH to electronically report information on Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection), SARS-CoV-2/COVID-19, and other viral and bacterial pathogens and infectious diseases of pandemic or epidemic potential only when the Secretary has declared a Public Health Emergency, directly related to such specific pathogens and infectious diseases.
• COVID-19 reporting, which would require an REH to electronically report information about COVID-19 and seasonal influenza in a standardized format specified by the Secretary, including the REH's current inventory supplies of any COVID-19-related therapeutics that have been distributed and delivered to the REH and the current usage rate for those therapeutics beginning at the conclusion of the COVID-19 PHE, and continuing until April 30, 2024, unless the Secretary specifies an earlier end date.
• COVID-19 Vaccination of REH staff, which would require the REH to develop and implement policies and procedures to ensure that all staff, with the exception of those with valid exemptions, are fully vaccinated for COVID-19 until November 4, 2024, unless the Secretary specifies an earlier end date for the requirements of this paragraph. Section 902 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 establishes a general 3-year timeline for publishing a Medicare final regulation after a proposed regulation or an interim final regulation has been published. The referenced November 4, 2024 date aligns with the statutory 3-year “Section 902” deadline for the IFC that implemented the COVID-19 staff vaccination requirements for the provider and supplier types covered under that rule. Even though this final rule is not itself subject to the section 902 deadline, we are finalizing a policy that will terminate this vaccination requirement at the same time and under the same circumstances as the vaccination requirement applicable to all other provider-types.
After consideration of the public comments we received, we are finalizing these provisions as proposed.
Sections 1861(kkk)(1)(B)(i) and (ii) of the Act require that the emergency department of the REH be staffed 24 hours a day, 7 days a week. We proposed to implement this requirement at § 485.528(a). The statute does not speak to the type of staff at the REH that is required to fulfill this role. As such, we believe that REHs should have the flexibility to determine how to staff the emergency department at the REH 24 hours, 7 days a week. We expect that the individual(s) staffing the emergency department is competent to receive patients and activate the appropriate medical resources for the treatment of the patient. In our proposed rule, we noted that such staff may include a nurse, nursing assistant, clinical technician, or an emergency medical technician, (EMT).
We proposed for REHs to meet the applicable CAH requirements at § 485.631 for staffing and staff responsibilities. We believe that many of the CAH staffing requirements are appropriate for application to REHs and as a result, at § 485.528(b) through (e), we set for the proposed standards for staffing, responsibilities of the doctor of medicine or osteopathy, physician assistant, nurse practitioner, and clinical nurse specialist responsibilities similar to CAHs. For instance, the CAH CoPs require at § 485.631(a)(5) that a registered nurse, clinical nurse specialist, or licensed practical nurse is on duty whenever the CAH has one or more inpatients. Since REHs are required to furnish emergency services and observation care, we proposed a similar requirement as CAHs to require that a registered nurse, clinical nurse specialist, or licensed practical nurse be on duty whenever the REH has one or more patients receiving emergency services or observation care.
We also proposed to require standards for the periodic review of clinical privileges and performance that are also identical to the CAH standards at § 485.631, with the exception of the CAH standard at § 485.631(b)(1)(iv),
We did not believe that it was necessary to apply the CAH requirement that a doctor of medicine or osteopathy, nurse practitioner, clinical nurse specialist, or physician assistant is available to furnish patient care services at all times the CAH operates (§ 485.631(a)(4)) to REHs. Instead, we proposed to require that the REH standards align with the CAH emergency services requirements at § 485.618. The CAH provision at § 485.618(d) requires that there be a doctor of medicine or osteopathy, a physician assistant, a nurse practitioner, or a clinical nurse specialist, with training or experience in emergency care, on call and immediately available by telephone or radio contact, and available on site within specified timeframes. This allows for the alignment of the REH proposed provisions with the CAH emergency services standards, as required by the statute.
In response to the REH RFI, commenters indicated that CMS should require board-certified emergency physicians to serve as medical directors of the REH. While we agree that having a board-certified emergency physician serving as the medical director of the REH would benefit patients by ensuring that the REH is overseen by a highly qualified physician with a high level of expertise in emergency medicine, we believe that requiring this of REHs would be unduly burdensome due to the challenges faced by rural communities in obtaining and retaining medical professionals to provide health care services. While we did not propose to require that REHs have a board-certified emergency physician serve as the medical director, we would encourage REHs to have such a physician serve in the capacity of medical director if possible.
After consideration of the public comments suggesting that a staff with certain training or experience in emergency care fill the requirement that the emergency department be staffed at all times, we are finalizing our proposal at § 485.528 with modification. We will require that the REH be staffed at all times by an individual who is competent in the skills needed to address emergency medical care. This individual must be able to receive patients and activate the appropriate medical resources to meet the care needed by the patient. We believe that this focus on skills needed to address emergency medical care will ensure that the individual staffing the REH at all times is appropriate. We expect that this individual has the ability to effectively communicate information regarding the condition of patients presenting to the emergency department for treatment to the physician or other practitioner notified of the patient's arrival. We remind readers that the Emergency Services provision at § 485.516 will require the REH to comply with the CAH Emergency Services CoP at § 485.618, such that the REH must have a physician or other practitioner on-call at all times and available on-site within 30 or 60 min (depending on if the facility is located in a frontier area). We also expect the individual staffing the emergency department of the REH to have the ability to recognize life-threatening emergencies and provide cardiopulmonary resuscitation to patients presenting to the emergency department, if necessary.
As noted in the discussion of the Emergency Services requirements at § 485.516, we believe that these revisions sufficiently address commenters concern regarding ensuring the REH's emergency department is appropriately staffed.
The CoPs for hospitals and CAHs include a provision for nursing services. However, given that each of these providers offers acute care inpatient services, we do not believe that all nursing services requirements for hospitals and CAHs are appropriate for REHs, which are outpatient-only providers. In evaluating the appropriateness of nursing services requirements for REHs, we also took into consideration the CfCs for ambulatory surgery centers at 42 CFR part 416 since they, like REHs, only offer outpatient services.
Consistent with the hospital requirements, we proposed at § 485.530 to require that REHs have an organized nursing service that is available to provide 24-hour nursing services for the provision of patient care. We believe that the REH should have a sufficient number of nurses available to provide services, based on the number of patients receiving services in the REH and the level of care required to be provided to those patients.
Similar to the standard for hospitals set out at § 482.23(a), we proposed at § 485.530(a) to require that patient care responsibilities must be delineated for all nursing service personnel and that nursing services must be provided in accordance with recognized standards of practice. Also consistent with the hospital standards for nursing services, we proposed to require at § 485.530(b) that the REH have a director of nursing who is a licensed registered nurse and who is responsible for the operation of the nursing services.
Additionally, the statute requires that the REH be staffed at all times. As discussed in the section for Staffing and Staff Responsibilities (§ 485.528), we are requiring that the individual(s) who fulfills the requirement that the REH must be staffed at all times must be an individual(s) who is competent in the skills needed to address emergency medical care. This individual(s) must be able to receive patients and activate the appropriate medical resources to meet the care needed by the patient. Furthermore, we are incorporating staffing into the REH's QAPI program at § 485.536(a)(1) to further address commenters concerns related to the REH staff and staff responsibilities.
After consideration of the public comments we received, we are finalizing as proposed.
Hospitals and CAHs have very similar discharge planning requirements at §§ 482.43 and 485.642, respectively. These requirements were revised in the final rule entitled “Medicare and Medicaid Programs; Revisions to Requirements for Discharge Planning for Hospitals, Critical Access Hospitals, and Home Health Agencies, and Hospital and Critical Access Hospital Changes to Promote Innovation, Flexibility, and Improvement in Patient Care” (84 FR 51836). Many commenters on the REH RFI noted the importance of having in-depth discharge planning requirements for REHs, highlighting the need for REH patients to have safe, well-coordinated discharge processes due to the availability of fewer health care resources in rural environments. As a result, we proposed to closely align the proposed discharge planning requirements for REHs with the requirements for hospitals and CAHs. Specifically, proposed at § 485.532 to require that the patient's discharge plan address the patient's goals of care and treatment preferences. During the discharge planning process, we would expect that the appropriate medical staff would discuss the patient's post-acute care goals and treatment preferences with the patient, the patient's family or their caregiver/support persons (or both) and subsequently document these goals and preferences in the medical record. We would expect these documented goals and treatment preferences to be taken into account throughout the entire discharge planning process. We note that as a provider of emergency services, the REH may receive patients from nursing homes who require emergency care. Having a robust discharge planning process in place is imperative for this patient population. There may be instances in which a patient comes to the REH from a nursing home and the nursing home either expresses an intent not to accept the patient or delays the patient's return back to the nursing home after the completion of emergency care by the REH. Under these circumstances, we would encourage the REH to contact their State's long-term care ombudsman or State Survey Agency. We also encourage the REH to inform patients who arrive from or are discharged to a long-term care facility about how to contact the Ombudsman and State Survey Agency, if a patient is having quality of care or quality of life concerns. The Administration of Community Living's Long-Term Care Ombudsman Programs, “. . . work to resolve problems related to the health, safety, welfare, and rights of individuals who live in LTC facilities, such as nursing homes, board and care and assisted living facilities, and other residential care communities. Ombudsman programs promote policies and consumer protections to improve long-term services and supports at the facility, local, state, and national levels.”
At § 485.532(a) introductory text and (a)(1), we proposed to require that REHs implement a discharge planning process to begin identifying, early in the provision of services, the anticipated post-discharge goals, preferences, and needs of the patient and begin to develop an appropriate discharge plan for patients who are likely to suffer adverse health consequences upon discharge in the absence of adequate discharge planning. Timely identification of the patient's goals, preferences, and needs and development of the discharge plan would reduce delays in the overall discharge process. Patient referrals to or consultation with community care organizations will be a key step, for some, in assuring successful patient outcomes. Therefore, we believe that discharge planning for patients is a process that involves the consideration of the patient's unique circumstances, treatment preferences, and goals of care, and is not solely a documentation process.
In addition, in order to encourage patient engagement and understanding of their discharge plan or instructions, we recommend that providers follow the National Standards for Culturally and Linguistically Appropriate Services (CLAS) in Health and Health Care (
Additionally, effective discharge planning would assist REHs in complying with the U.S. Supreme Court's holding in
At § 485.532(a)(2), we proposed to require an REH to perform a discharge planning evaluation which would have to include an evaluation of a patient's likely need for appropriate services following care that has been furnished by an REH, including, but not limited to, hospice care services, post-REH extended care services, home health services, and non-health care services
At § 485.532(a)(3), we proposed to require that the patient's discharge needs evaluation and discharge plan be documented and completed on a timely basis, based on the patient's goals, preferences, strengths, and needs, so that appropriate arrangements for post-REH care could be made before discharge. This requirement would prevent the patient's discharge or transfer from being unduly delayed. We expect that in response to this requirement, REHs would establish more specific time frames for completing the evaluation and discharge plans based on the needs of their patients and their own operations. All relevant patient information would be incorporated into the discharge plan to facilitate its implementation and the discharge plan would have to be included in the patient's medical record. The results of the evaluation would also have to be discussed with the patient or patient's representative. Furthermore, we believe that REHs would use their evaluation of the discharge planning process, with solicitation of feedback from other providers and suppliers in the community, as well as from patients and caregivers, to revise their timeframes, as needed. We encourage REHs to make use of available health information technology, such as electronic health records, as well as entities that can facilitate exchange, such as health information exchanges, to enhance the efficiency and effectiveness of their discharge process.
At § 485.532(a)(4), we proposed to require the REH to arrange for the development and initial implementation of a discharge plan for those patients so identified as well as for other patients upon the request of the patient's physician. We proposed at § 485.532(a)(5) to require that a registered nurse, social worker, or other personnel qualified in accordance with the REH's discharge planning policy coordinate the discharge needs evaluation and the development of the discharge plan.
At § 485.532(a)(6), we proposed to require that the REH's discharge planning process ensure an ongoing patient evaluation throughout the patient's REH stay or visit to identify any changes in the patient's condition that would require modifications to the discharge plan. The evaluation to determine a patients continued stays at the REH (or in other words, their readiness for discharge or transfer), is a current standard of medical practice.
We proposed to require at § 485.532(a)(7) that the hospital assess its discharge planning process on a regular basis and include, as part of the assessment, an ongoing review of a representative sample of discharge plans. We expect that this would include patients who were emergency department revisits or presented to the emergency department within 30 days of a previous visit, to ensure that the REH is responsive to the discharge needs of patients.
In addition to standards for evaluating the discharge needs of patients and the development of discharge plans, the hospital and CAH discharge planning provisions also require that the hospital and CAH assist patients, their families, or the patient's representative in selecting a post-acute care provider by using and sharing data that includes, but is not limited to, home health agency (HHA), SNF, inpatient rehabilitation facility (IRF), or long-term care hospital (LTCH) data on quality measures and data on resource use measures. Furthermore, the CoPs for those facility-types require the hospital and CAH to ensure that the post-acute care data on quality measures and data on resource use measures is relevant and applicable to the patient's goals of care and treatment preferences. We believe these requirements are applicable to REHs, given that we expect some patients of the REH to be discharged to a post-acute care provider. As result, we proposed at § 485.532(a)(8) to require REHs to share data on quality measures and resource use measures of local post-acute care providers with patients to assist them in selecting a post-acute care provider.
We proposed at § 485.532(b) to require that the REH would be required to discharge the patient, and also transfer or refer the patient where applicable, along with all necessary medical information pertaining to the patient's course of illness and treatment, post-discharge goals of care, and treatment preferences, at the time of discharge, to the appropriate post-acute care service providers and suppliers, facilities, agencies, and other outpatient service providers and practitioners responsible for the patient's follow-up or ancillary care.
The Agency for Healthcare Research and Quality (AHRQ) released an environmental scan report on Improving the Emergency Department Discharge Process, that evaluated the state of the emergency department discharge process and ways in which it could be improved.[20] The report found that a high-quality emergency department discharge incorporates the following:
• Informs and educates patients on their diagnosis, prognosis, treatment plan, and expected course of illness. This includes informing patients of the details of their visit (treatments, tests, procedures).
• Supports patients in receiving post-emergency department discharge care. This might include medications, home care of injuries, use of medical devices/equipment, further diagnostic testing, and further health care provider evaluation; and
• Coordinates emergency department care within the context of the health care system (other health care providers, social services, etc.).
We believe discharge planning requirements proposed for REHs address the goals identified in the report.
We also note that we proposed at § 485.532 to require that REHs have an effective discharge planning process that focused on the patient's goals and treatment preferences and includes the patient and their caregivers/support person(s) as active partners in the discharge planning for post-discharge care. The discharge planning process and the discharge plan must be consistent with the patient's goals for
After consideration of the public comments we received, we are finalizing this provision as proposed.
It is imperative for patients to have the ability to exercise certain rights and protections while seeking and receiving necessary care and services at an REH. As previously mentioned, the appropriate provision of behavioral health is very important in the treatment and safety of patients and staff. Behavioral health is a challenge in rural areas, due to the accessibility, affordability, acceptability and availability of these services. The demand for mental health is increasing, with 67 percent of organizations seeing an increase in the demand for services (National Council for Mental Wellbeing:
At § 485.534(a), we proposed that an REH inform each patient or patient's representative (as allowed under state law), of the patient's rights, in advance of furnishing or discontinuing patient care whenever possible. This included a proposal to require the REH to establish a process for the oversight and prompt resolution of patient grievances and for informing each patient whom to contact to file a grievance.
At § 485.534(b), we proposed to specify those rights a patient has regarding their medical care, which includes the right to make informed decisions regarding their care, to be fully informed about such care, and the right to request or refuse treatment. We noted that this right was not to be construed as a mechanism to demand the provision of treatment or services deemed medically unnecessary or inappropriate. In addition, we proposed to specify that the patient also has the right to formulate advance directives and to have REH staff and practitioners who provide care in the REH comply with these directives.
At § 485.534(c), we proposed to specify that the patient has the right to personal privacy, receive care in a safe setting, and be free from all forms of abuse or harassment. At § 485.534(d), we proposed to specify that the patient has the right to the confidentiality of their medical records and the right to access their medical records. We also proposed that the REH be required to provide the patient with their records in a form and format requested by the patient, and within a reasonable timeframe, so as not to frustrate the legitimate efforts of individuals to gain access to their own medical records.
At § 485.534(e), we proposed rules relating to the use of restraints and seclusion that would be less burdensome than those for hospitals, because we believe that the likelihood of an REH needing to utilize restraints and seclusion would be relatively low. In addition, in the event that there were patients requiring restraint and seclusion, we would expect them to be transferred quickly to a higher level of care. We note that we have similar expectations for CAHs and are finalizing similar requirements for CAHs in this rule. We proposed to specify that all patients have the right to be free from physical or mental abuse, from corporal punishment, and from restraint or seclusion, of any form, imposed as a means of coercion, discipline, convenience, or retaliation by staff. We proposed that restraint or seclusion would only be imposed to ensure the immediate physical safety of the patient, a staff member, or others, and would have to be discontinued at the earliest possible time. We proposed to define “restraint” as any manual method, physical or mechanical device, material, or equipment that immobilizes or reduces the ability of a patient to move their arms, legs, body, or head freely; or a drug or medication when it is used as a restriction to manage the patient's behavior or restrict the patient's freedom of movement and is not a standard treatment or dosage for the patient's condition. A restraint does not include devices, such as orthopedically prescribed devices, surgical dressings or bandages, protective helmets, or other methods that involve the physical holding of a patient for the purpose of conducting routine physical examinations or tests, or to protect the patient from falling out of bed, off of a stretcher, or out of a chair, or to permit the patient to participate in activities without the risk of physical harm (this does not include a physical escort). We proposed to define “seclusion” as the involuntary confinement of a patient alone in a room or area from which the
At § 485.534(e)(2), we proposed to require that the restraint or seclusion only be used when less restrictive interventions had been determined to be ineffective to protect the patient, a staff member, or others from harm, and at § 485.534(e)(3) that the type or technique of restraint or seclusion used would have to be the least restrictive intervention that will be effective to protect the patient, staff member, or others from harm. At § 485.534(e)(4), we proposed that the REH would have to have written policies and procedures regarding the use of restraint and seclusion consistent with current standards of practice. These requirements would allow for the REH to use restraints and seclusion in the event that it was necessary and as a last resort to respond to immediate safety concerns, but would present a lesser burden and allow for more flexibility than existing hospital CoPs. We believe that allowing the REH the flexibility to develop their own policies and procedures for restraints and seclusion based on the scope of services they provide is necessary given their patient volumes, populations, and access to resources. We proposed to require that such policies and procedures be consistent with current standards of practice.
The following staff training requirements are not as prescriptive as the existing hospital requirements, and we proposed these same requirements for CAHs in the REH NPRM. At § 485.534(f), we proposed to establish staff training requirements for the use of restraints and seclusion. Specifically, we proposed that the patient has the right to safe implementation of restraint or seclusion, when necessary, by trained staff. We proposed at § 485.534(f)(1) that the REH would have to provide competency-based training and education of REH personnel and staff, including medical staff and contractors, on the use of restraint and seclusion. We proposed to require that the training be patient-centered, meaning that t staff are able to ensure that the use of restraint and seclusion for patients receiving services in an REH is respectful of, and responsive to, individual patient preferences, needs and values. Additionally, to ensure that staff are educated and trained on using the least restrictive intervention necessary for the safety of the patients and REH staff, we proposed at § 485.534(f)(2) to require that the REH staff train their staff in alternatives to the use of restraint and seclusion. For example, we proposed that staff have trauma-informed knowledge competencies and be aware of effective de-escalation techniques that could be used to avoid the use of restraint and seclusion and the trauma that may be associated with their use. Trained peer workers (people who share similar experiences of being diagnosed with mental health conditions, substance use disorders, or both) and community health workers (CHWs) could also serve a useful role in assisting patients and other staff. This could include helping to monitor use of restraint and seclusion, deescalating interactions with patients and contributing to a positive and supportive environment for patients, family members, and REH staff. REHs are encouraged to consider the use of peer workers and CHWs in their staffing plans. For further information, please see the 2007 guidance on use of peers in the Medicaid program (
The REH death reporting requirements are similar to the hospital requirements at § 482.13. At § 485.534(g), we proposed to establish requirements that REHs must follow when reporting deaths associated with the use of seclusion or restraint. Specifically, we proposed to require that the REH report to CMS, by telephone, facsimile, or electronically, as determined by CMS, no later than the close of business on the next business day the following information—(1) Each death that occurs while a patient is in restraint or seclusion; (2) Each death that occurs within 24 hours after the patient has been removed from restraint or seclusion; (3) Each death known to the REH that occurs within 1 week after restraint or seclusion where it is reasonable to assume that use of restraint or placement in seclusion contributed directly or indirectly to a patient's death, regardless of the type(s) of restraint used on the patient during this time. We note that “reasonable to assume” in this context would include, but is not limited to, deaths related to restrictions of movement for prolonged periods of time, or death related to chest compression, restriction of breathing, or asphyxiation.
For instances when no seclusion had been used and when the only restraints used on the patient were those applied exclusively to the patient's wrist(s), and which are composed solely of soft, non-rigid, cloth-like materials, the REH staff would have to record in an internal log or other system, the following information: (1) Any death that occurs while a patient was in such restraints; (2) Any death that occurred within 24 hours after a patient had been removed from such restraints. Furthermore, we proposed that staff document in the patient's medical record the date and time the death was reported to CMS or recorded in the internal log or other system. Also, for instances when no seclusion had been used and when the only restraints used on the patient were those applied exclusively to the patient's wrist(s),we proposed to require that entries into the internal log or other system must be documented no later than seven days after the date of death of the patient, include the patient's name, date of birth, date of death, name of attending physician or other licensed practitioner who is responsible for the care of the patient, medical record number, and primary diagnosis(es), and to be made available in either written or electronic form to CMS immediately upon request.
At § 485.534(h), we proposed to establish requirements related to a patient's visitation rights. These requirements would be consistent with the current hospital and CAH regulations. Specifically, we proposed that an REH have written policies and procedures regarding the visitation rights of patients, including those setting forth any clinically necessary or reasonable restriction or limitation that the REH may need to place on such rights and the reasons for the clinical restriction or limitation. An REH would have to inform patients (or support persons, where appropriate) of their visitation rights, including any clinical restriction or limitation on such rights, when they were informed of their other rights. Each patient would be informed (or support persons, where appropriate) of the right, subject to their consent, to receive the visitors whom they designated, including, but not limited to, a spouse, a domestic partner (including a same-sex domestic partner), another family member, or a friend. The patient would also have the right to withdraw or deny such consent at any
After consideration of the public comments we received, we are finalizing these provisions as proposed.
An effective QAPI program that is engaged in continuous improvement efforts is essential to a provider's ability to deliver high quality and safe care to its patients, while reducing the incidence of medical errors and adverse events. Therefore, we believe the QAPI programs for REHs should conform to the current health care industry standards that require providers to proactively design quality improvement into each program at the outset, monitor data (indicators, measures and reports of staff/residents/families), determine root causes of problems, develop and implement plans that affect system improvement, and monitor the success of this systematic approach to improving quality.
At § 485.536, we proposed to require that every REH develop, implement, and maintain an effective, ongoing, REH-wide, data-driven QAPI program. This requirement ensures that the REH systematically reviews its operating systems and processes of care to identify and implement opportunities to deliver effective care to its patients focusing on improving health outcomes and preventing and reducing medical errors.
In the development of the proposed requirements for the REH QAPI program, we reviewed the CAH QAPI requirements at § 485.641, which we note are also closely aligned with the hospital QAPI requirements at § 482.21. We also took into account the comments on the REH RFI and input from other interested parties who requested that CMS consider the clinical and administrative limitations that rural providers experience and, where appropriate, we have proposed requirements that minimize burden while maintaining the ability of the REH to proactively maximize quality improvement activities and programs.
The proposed QAPI program contained the following five parts: (a) Program and scope; (b) Program data collection and analysis; (c) Program activities; (d) Executive responsibilities; and (e) Unified and integrated QAPI program for an REH in a multi-hospital system.
Similar to the program scope standard for hospitals at § 482.21(a)(1) and (2), at § 485.536(a)(1), we proposed to require the REH to have an ongoing QAPI program that reflects improvement in quality indicators related to health outcomes and reductions in medical errors. In proposed paragraph § 485.536(a)(2) we would require REHs to measure, analyze, and track these quality indicators. At § 485.536(b), we proposed to mirror the program data collection and analysis standard for CAHs at § 485.641(e) and require that the REH's QAPI program incorporate quality indicator data including patient care data, quality measures data, and other relevant data in order to attain quality improvement.
Similar to the program activities standard for hospitals at § 482.21(c), at § 485.536(c)(1), we proposed to require the REH to set priorities for its performance improvement activities focused on high-risk, high-volume, or problem-prone areas. We also proposed to require the REH to consider the incidence, prevalence, and severity of problems in those identified areas and that the set priority areas affect health outcomes, patient safety, and quality of care. At § 485.536(c)(2) and (3), we proposed to require the REH's performance improvement activities to track medical errors and adverse events, analyze their causes, and implement preventive actions. We would expect the REH to conduct analyses at regular intervals to track performance and ensure that improvements were sustained.
We proposed at § 485.536(d), similar to the standard for executive responsibilities for hospitals at § 482.21(e), that the responsibilities for the REH's governing body (or organized group or individual who assumes full legal authority and responsibility for operations of the REH), medical staff, and administrative officials include ensuring that the QAPI program is implemented and maintained, properly evaluated, and appropriately resourced.
Lastly, consistent with the standard included at § 482.21(f) in the hospital CoPs for QAPI programs, we proposed at § 485.536(e) to allow REHs that are part of a multi-facility system consisting of multiple separately certified hospitals, CAHs, and/or REHs to elect to have a unified and integrated QAPI program if in accordance with all applicable state and local laws. Specifically, we proposed to specify that the system's governing body would be responsible and accountable for ensuring that each of its separately certified REHs met the proposed QAPI program requirements. We expect this policy would be beneficial to REHs that may lack time, resources or staff to implement an REH-specific QAPI program. The REH would be able to benefit from the resources and expertise of a multi-hospital system in implementing their QAPI program, as well as potentially reduce the time and labor investments required to enact and maintain the program.
We were interested in input from the public regarding possible unintended consequences that could occur as a result of allowing REHs to participate in a unified and integrated QAPI program. We were interested in feedback regarding how the integrated health system's governing body would ensure that they consider the REH's unique circumstances and any significant differences in patient populations and services offered at the REH. We also sought comments regarding how the integrated health system's governing body would ensure that an REH participating in a unified and integrated QAPI program provided the appropriate level of care to patients being treated in the REH, including being appropriately transferred to another facility when necessary.
After consideration of the public comments we received, we are finalizing § 485.536(a)(2) with a modification to require the REH to specifically measure, analyze, and track staffing as a quality indicator.
Section 1861(kkk)(2)(C) of the Act, as added by the CAA, requires an REH to have in effect a transfer agreement with a level I or level II trauma center. In accordance with section 1861(kkk)(2)(C) of the Act, at § 485.538 we proposed to require that REHs have in effect an agreement with at least one Medicare-certified hospital that is a level I or level II trauma center for the referral and transfer of patients requiring emergency medical care beyond the capabilities of the REH. We would require that the level I or level II trauma center meets certain licensure requirements including being licensed as a hospital in a state that provides for the licensing of hospitals under state or applicable local law or approved by the agency of such state or locality responsible for licensing hospitals, as meeting standards established for licensing established by the agency of the state. It is also acceptable for the level I or II trauma center to be located in a state other than the state where the REH is located. In addition, we proposed to require that the level I or level II trauma center must also be licensed or designated by the state or local government authority as level I or level II trauma center or is verified by the American College of Surgeons as a level I or level II trauma center.
We received several comments to the REH RFI regarding transfer agreements between REHs and hospitals that are not designated as a level I or II trauma center. Specifically, commenters stated that due to distance, or the possibility that level I or level II trauma centers may not have available beds, many rural CAHs currently transfer patients to level III or level IV trauma centers based on the patient's specific needs. Commenters requested that CMS allow these facilities to retain these agreements, should they convert to REHs. We would expect REHs to comply with the CoP detailed at § 485.538 and to have a transfer agreement in place with a level I or II trauma center. However, we do not believe that the statute precludes an REH from also having a transfer agreement with a hospital that is not designated as a level I or II trauma center. An REH may have pre-existing relationships with hospitals that are not designated as level I or level II trauma centers. In these instances, the proposed requirement would not preclude them from maintaining those relationships and leveraging resources and capacity that may be available to deliver care that is beyond the scope of care delivered at the REH.
After consideration of the public comments we received, we are finalizing § 485.538 as proposed.
The maintenance of a medical records system is a longstanding requirement in both the hospital and CAH CoPs. In the development of proposed requirements for medical records for REHs, we reviewed the CoPs for medical records for CAHs established at § 485.638, including the requirements finalized in the May 2020 final rule, “Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Interoperability and Patient Access” (85 FR 25510 through 25585), focused on electronic patient event notifications of a patient's admission, discharge, and/or transfer to another health care facility or to another community provider. We also considered the comments from the REH RFI that encouraged CMS to closely align the CoPs for REHs with currently established requirements for CAHs. After reviewing the CoPs for medical records for CAHs at § 485.638, we believed that the requirements established for medical records for CAHs are also appropriate for REHs. We also would expect that many facilities that may elect to convert to an REH would presently have these systems in place, which may minimize administrative burden. Therefore, at § 485.540(a), we proposed to require that the REH maintain a medical records system in accordance with written policies and procedures; that such records be legible, complete, accurately documented, readily accessible, and systematically organized and that a designated member of the professional staff be responsible for maintaining the records. We also proposed to require that for each patient receiving health care services, the REH would be required to maintain a record that would include, as applicable, identification and social data, evidence of properly executed informed consent forms, pertinent medical history, assessment of the health status and health care needs of the patient, and a brief summary of the episode, disposition, and instructions to the patient. We proposed that the record requirements include reports of physical examinations; diagnostic and laboratory test results, including clinical laboratory services; consultative findings and all orders of doctors of medicine or osteopathy or other practitioners; reports of treatments and medications; nursing notes and documentation of complications; and other pertinent information necessary to monitor the patient's progress, such as temperature graphics or progress notes describing the patient's response to treatment. Lastly, we proposed that the record include dated signatures of the doctor of medicine or osteopathy or other health care professional.
At § 485.540(b) and (c), we proposed to require the REH to maintain the confidentiality of patients' medical record information and to ensure that such records would be retained for at least 5 years from date of last entry, and longer if required by state statute, or if the records may be needed in any pending proceeding.
Lastly, at § 485.540(d), we proposed a standard for electronic notifications if the REH utilizes an electronic medical records system or other electronic administrative system that conforms with the content exchange standard at 45 CFR 170.205(d)(2). This requirement was intended to limit the applicability of this CoP to those REHs which currently possess an EHR or other electronic administrative system with the technical capacity to generate information for electronic patient event notifications. As discussed in the CMS Interoperability and Patient Access final rule (85 FR 25585), electronic patient event notifications can be an effective tool for improving care coordination across settings, especially when patients are discharged. We proposed to require the REH to demonstrate that the system's notification capacity was fully operational and sends notifications with at least specified patient information, as appropriate, and facilitates the exchange of health information when the patient is registered, discharged, or transferred from the REH's emergency department. Finally, we proposed to require that the REH make a reasonable effort to ensure that the system would send notifications to specific recipients, including the patient's applicable post-acute care and primary care services providers.
After consideration of the public comments we received, we are finalizing § 485.540 as proposed.
Over the past several years, the U.S. has been challenged by several natural and man-made disasters. As a result of the September 11, 2001 terrorist attacks, the subsequent anthrax attacks, the catastrophic hurricanes in the Gulf Coast states in 2005, flooding in the Midwestern states in 2008, tornadoes and floods in the spring of 2011, the 2009 H1N1 influenza pandemic, and Hurricane Sandy in 2012 and most recently, the COVID-19 pandemic, readiness for public health emergencies has been put on the national agenda. On September 16, 2016, we published a final rule, “Medicare and Medicaid Programs; Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers” (81 FR 63860), to establish emergency preparedness requirements for Medicare and Medicaid participating providers and suppliers to plan adequately for both natural and man-made disasters, and coordinate with Federal, state, tribal, regional, and local emergency preparedness systems. Disasters can disrupt the health care environment and change the demand for health care services. This makes it essential that health care providers and
Thus, we proposed emergency preparedness requirements to establish a comprehensive, consistent, flexible, and dynamic regulatory approach to emergency preparedness for REHs that would align with the existing emergency preparedness standards for other Medicare and Medicaid participating providers and suppliers. These proposed requirements mirrored the existing CAH emergency preparedness requirements. The emergency preparedness requirements for all Medicare-participating providers and suppliers are generally consistent, with some differences based on the provider type (such as inpatient versus outpatient).
Consistent with the standards for most other Medicare and Medicaid participating providers and suppliers, we proposed to require REHs to comply with all applicable Federal, state, and local emergency preparedness requirements. In addition, we proposed to require that the REH establish and maintain an emergency preparedness program that addressed four core elements that we believe are central to an effective emergency preparedness system. The four elements are: (1) risk assessment and planning; (2) policies and procedures; (3) communication; and (4) training and testing.
At § 485.542(a), we proposed to require that REHs develop and maintain an emergency preparedness plan that would have to be reviewed and updated at least every 2 years. Specifically, we proposed to require that the REHs emergency plan—(1) Be based on and include a documented, facility-based and community-based risk assessment, utilizing an all-hazards approach; (2) include strategies for addressing emergency events identified by the risk assessment; (3) address the patient population, including, but not limited to, the type of services the REH has the ability to provide in an emergency; and continuity of operations, including delegations of authority and succession plans; and (4) include a process for cooperation and collaboration with local, tribal, regional, state, and Federal emergency preparedness officials' efforts to maintain an integrated response during a disaster or emergency situation.
At § 485.542(b), we proposed to require REHs to develop and implement policies and procedures, based on the emergency plan, risk assessment, and communication plan, which would be reviewed and updated at least every 2 years. Specifically, we proposed to require that the policies and procedures would have to address the following:
• Provision of subsistence needs for staff and patients, whether they evacuate or shelter in place, including, but not limited to food, water, medical and pharmaceutical supplies, other sources of energy to maintain temperatures, emergency lighting, fire detection and sewage and waste disposal;
• A system to track the location of on-duty staff and sheltered patients in the REH's care during an emergency; if staff were being relocated the REH would have to document the specific name and location of the receiving facility or other location;
• Safe evacuation from the REH, to include consideration of care and treatment needs of the evacuees, staff responsibilities and transportation and identification of the evacuation location(s);
• A means to shelter in place for any patients, staff and volunteers that remain at the REH;
• A system of medical documentation that would preserve patient information, protects confidentiality of all patient information and secures and maintains the availability of the records;
• The use of volunteers in an emergency and other staffing strategies, including the process and role for integration of state and federally designated health care professionals to address surge needs during an emergency; and
• The role of the REH under a waiver declared by the Secretary, in accordance with section 1135 of the Act, in the provision of care and treatment at an alternate care site identified by emergency management officials.
We believe that small, rural REHs would be able to develop an appropriate emergency preparedness plan and develop policies and procedures in accordance with our proposed requirements with the assistance of resources in their state and local community guidance.
At § 485.542(c), we proposed to require REHs to develop and maintain an emergency preparedness communication plan that would comply with both Federal and state law; the plan would have to be reviewed and updated at least every 2 years. The communication plan would be required to include the following:
• Names and contact information for staff, entities providing services under agreement, patients' physicians and volunteers;
• Contact information for Federal, state, tribal, regional, and local emergency preparedness staff and other sources of assistance;
• Primary and alternate means for communicating with the REH's staff and Federal, state, tribal, regional, and local emergency management agencies;
• A method for sharing information and medical documentation for patients under the REH's care, as necessary, with other health care providers to maintain the continuity of care;
• A means, in the event of an evacuation, to release patient information;
• A means of providing information about the general condition and location of patients under the facility's care; and
• A means of providing information about the REH's needs, and its ability to provide assistance, to the authority having jurisdiction, the Incident Command Center, or designee.
We would expect patient care to be well-coordinated within the REH, across healthcare providers, and with state and local public health departments and emergency management agencies and systems to protect patient health and safety in the event of a disaster. The following link is to the Federal Emergency Management Agency's (FEMA's) comprehensive preparedness guide to develop and maintain emergency operations plans:
At § 485.542(d), we proposed to require the REH to develop and maintain an emergency preparedness training and testing program based on the emergency plan, policies and procedures and communication plan, and reviewed and updated at least every 2 years. We proposed to require at § 485.542(d)(1) that the training program include initial training in the emergency preparedness policies and procedures for new and existing staff, individuals providing on-site services under arrangement, and volunteers, consistent with their expected roles. We also proposed to require the facility to provide emergency preparedness training at least every 2 years, maintain documentation of all emergency preparedness training, demonstrate staff knowledge of emergency procedures, and if the emergency preparedness policies and procedures were significantly updated, conduct training
We proposed at § 485.542(d)(2) to require that the REH conduct exercises to test the emergency plan at least annually. Specifically, we proposed to require that the REH conduct two testing exercises, a full-scale or functional exercise and an additional exercise of its choice, every 2 years. First, the REH would be required to participate in a full-scale community-based exercise. If a community-based exercise was not accessible, we proposed that the REH would have to conduct a facility-based functional exercise; or, if the REH experienced an actual natural or man-made emergency that required activation of the emergency plan, the REH would be exempt from engaging in its next required community-based or individual, facility-based functional exercise following the onset of the emergency event. Second, the REH would have to conduct an additional exercise, opposite the year the full-scale or functional exercise was conducted, that could include, but would not be limited to, a second full-scale community-based exercise or an individual, facility-based functional exercise, a mock disaster drill, or a tabletop exercise or workshop led by a facilitator, including a group discussion using a narrated, clinically-relevant emergency scenario, and a set of problem statements, directed messages, or prepared questions designed to challenge an emergency plan. Lastly, we proposed to require that the REH analyze its response to and maintain documentation of all drills, tabletop exercises, and emergency events and revise the REH's emergency plan, as needed.
We proposed at § 485.642(e) that REHs be required to store emergency fuel and associated equipment and systems as required by the 2000 edition of the Life Safety Code (LSC) of the NFPA®. In addition to the emergency power system inspection and testing requirements found in NFPA® 99 and NFPA® 110 and NFPA® 101, we proposed that REHs test their emergency and stand-by-power systems for a minimum of 4 continuous hours every 12 months at 100 percent of the power load the REH anticipates it will require during an emergency. The NFPA 101® 2012 edition of the LSC (including the technical interim amendments (TIAs)) provides minimum requirements, with due regard to function, for the design, operation and maintenance of buildings and structures for safety to life from fire. Its provisions also aid life safety in similar emergencies. The NFPA 99® 2012 edition of the Health Care Facilities Code (including the TIAs) provides minimum requirements for health care facilities for the installation, inspection, testing, maintenance, performance, and safe practices for facilities, material, equipment, and appliances, including other hazards associated with the primary hazards. The NFPA 110 covers performance requirements for emergency and standby power systems providing an alternate source of electrical power in buildings and facilities in the event that the normal electrical power source fails. Systems include power sources, transfer equipment, controls, supervisory equipment, and accessory equipment needed to supply electrical power to the selected circuits.
Finally, at § 485.542(f), we proposed to specify that if an REH was part of a healthcare system consisting of multiple separately certified healthcare facilities that elected to have a unified and integrated emergency preparedness program, the REH could choose to participate in the healthcare system's coordinated emergency preparedness program. If the REH elected this, we proposed that the unified and integrated emergency preparedness program would have to demonstrate that each separately certified facility within the system actively participated in the development of the unified and integrated emergency preparedness program and be developed and maintained in a manner that took into account each separately certified facility's unique circumstances, patient populations, and services offered.
In addition, we proposed that each separately certified REH in the system would have to be capable of actively using the unified and integrated emergency preparedness program and was in compliance with the program's requirements. We also proposed that the unified and integrated emergency preparedness program would have to include a unified and integrated emergency plan that is based on a documented community-based risk assessment, utilizing an all-hazards approach and a documented individual facility-based risk assessment for each separately certified REH within the health system, utilizing an all-hazards approach. Lastly, we proposed that the unified and integrated emergency preparedness program would have to have integrated policies and procedures, a coordinated communication plan, and training and testing programs.
After consideration of the public comments we received, we are finalizing these provisions as proposed.
The LSC is a compilation of fire safety requirements for new and existing buildings, and is updated and published every 3 years by the National Fire Protection Association (NFPA), a private, nonprofit organization dedicated to reducing loss of life due to fire. The Medicare and Medicaid regulations have historically incorporated these requirements by reference, along with Secretarial waiver authority. The statutory basis for incorporating NFPA's LSC into the regulations we apply to Medicare and, as applicable, Medicaid providers and suppliers is the Secretary's facility-specific authority to stipulate health and safety regulations for each type of Medicare and (if applicable) Medicaid-participating facility. For REHs, that statutory authority is set out at new section 1861(kkk)(2)(D)(v) of the Act. The following provisions we have proposed are similar to the Hospital, CAH, and ASC LSC and Health Care Facilities Code requirements.
The NFPA 101®2012 edition of the LSC (including the technical interim amendments (TIAs)) provides minimum requirements, with due regard to function, for the design, operation and maintenance of buildings and structures for safety to life from fire. Its provisions also aid life safety in similar emergencies. The NFPA 99® 2012 edition of the Health Care Facilities Code (including the TIAs) provides minimum requirements for health care facilities for the installation, inspection, testing, maintenance, performance, and safe practices for facilities, material,
We review each new edition of the NFPA 101 and NFPA 99, which are issued every 3 years, to see if there are any significant provisions that we need to adopt. We will continue to review these documents every 3 years to see if there are relevant or updated provisions that we need to adopt. The 2012 edition of the LSC includes provisions that we believe are vital to the health and safety of all patients and staff. Our intention is to ensure that patients and staff continue to experience the highest degree of fire safety possible. All Medicare and Medicaid participating providers and suppliers are currently subject to the requirements of the 2012 edition of the LSC and the 2012 edition of the Health Care Facilities Code as adopted by CMS (with some minor expectations which are set out in the various facilities' “physical environment” regulations).
In order to ensure the minimum level of protection afforded by NFPA 99 is applicable to all patient and resident care areas within a health care facility, we proposed to adopt the 2012 edition of NFPA 99, with the exception of chapters 7—Information Technology and Communications Systems for Health Care Facilities; 8—Plumbing; 12—Emergency Management; and 13—Security Management.
At § 485.544(a), we proposed that the REH be constructed, arranged, and maintained to ensure the safety of the patient and to provide facilities for diagnosis and treatment and for special hospital services appropriate to the needs of the community. Specifically, we proposed that the condition of the physical plant and the overall REH environment would have to be developed and maintained in such a manner that the safety and well-being of patients would be assured. This would include emergency power and lighting in at least all areas serviced by the emergency supply source, including but not limited to, the operating, recovery, and emergency rooms, and stairwells. In all other areas not serviced by the emergency supply source the REH would be required to have battery lamps and flashlights available. In addition, we proposed to require the REH to have facilities for emergency gas and water supply and a safe and sanitary environment, that is properly constructed, equipped and maintained to protect the health and safety of all patients.
At § 485.544(b), we proposed that the REH be required to maintain adequate facilities for its services that includes diagnostic and therapeutic facilities that are located in a manner that ensures the safety of patients. We also would require the REH to maintain facilities, supplies, and equipment in a manner that ensures an acceptable level of safety and quality. We proposed further that the facility be designed and maintained to reflect the scope and complexity of the services it offers in accordance with accepted standards of practice and that there must be proper ventilation, light, and temperature controls in pharmaceutical, food preparation, and other appropriate areas.
At § 485.544(c), we proposed that REHs meet the provisions applicable to Ambulatory Health Care Occupancies in the 2012 edition of the LSC, regardless of the number of patients the facility serves. We believe the protection provided in the Ambulatory Health Care Occupancies chapter is necessary to protect the health and safety of patients who are incapable of caring for themselves at any point in time. We proposed at § 485.544(c)(2) to implement requirements related to the Secretary's waiver authority for periods deemed appropriate, which would result in unreasonable hardship, but only if the waiver will not adversely affect the health and safety of patients. We proposed at § 485.544(c)(3) that the provisions of the LSC would not apply in a state if CMS finds that a fire and safety code imposed by state law adequately protected patients. We also proposed at § 485.544(c)(4) requirements related to protection against inappropriate access for alcohol-based hand rub dispensers. At § 485.544(c)(5), we proposed to require that a REH with a sprinkler system that was out of service for more than 10 hours in a 24-hour period would be required to evacuate the building or portion of the building affected by the system outage, or establish a fire watch until the system was back in service, notwithstanding the lower standard of the 2012 LSC.
Lastly, at § 485.544(d) we proposed to require REHs to comply with the 2012 edition of the NFPA 99. We proposed that chapters 7, 8, 12, and 13 would not apply to REHs. We also proposed to allow for waivers of these provisions under the same conditions and procedures that we currently use for waivers of applicable provisions of the LSC.
After consideration of the public comments we received, we are finalizing these provisions as proposed.
Section 1861(kkk)(2)(D)(vi) of the Act allows REHs to establish a unit that is a distinct part licensed as a SNF to furnish post-REH or post-hospital (in the event the services were provided at a hospital or a CAH) extended care services (or SNF services). A distinct part SNF is an area that is separately licensed and certified to provide SNF services at all times. A distinct part SNF must be physically distinguishable from the REH, must be fiscally separate for cost reporting purposes, and the beds in the certified distinct part SNF unit of an REH must meet the requirements applicable to distinct part SNFs at 42 CFR part 483, subpart B. Medicare payment for SNF services furnished in these distinct part SNFs of an REH would be under the SNF prospective payment system as required under section 1834(x)(4) of the Act. We note that a distinct part SNF of an REH is not subject to the REH's length of stay limits of less than an annual per patient average of 24 hours.
We highlight that a distinct part SNF unit is not the same as a CAH or
To implement that statutory provision allowing REHs to establish distinct part SNFs, we proposed at § 485.546 to require REHs choosing to establish such a distinct part unit to meet the requirements for long-term care facilities at 42 CFR part 483, subpart B.
After consideration of the public comments we received, we are finalizing § 485.546 as proposed. We are adding clarifying language to the regulatory requirement to indicate that the distinct part SNF must be separately licensed and certified, in addition to complying with the requirements of participation for long-term care facilities specified in part 483, subpart B of this subchapter. This is not an additional requirement and was presented in the discussion for this requirement in our proposed rule. The addition of this requirement in the CoP is for clarification only.
Generally, a CAH must meet certain criteria for designation, as set out in section 1820(c)(2)(B) of the Act. These criteria specify certain “distance requirements” relative to other hospitals or CAHs, and specifically require that a CAH be (1) “located more than a 35-mile drive (or, in the case of mountainous terrain or in areas with only secondary roads available, a 15-mile drive) from a hospital” or (2) “certified before January 1, 2006, by the State as being a necessary provider of health care services to residents in the area”. The current regulatory requirement at § 485.610(c) sets forth the distance requirements for CAHs relative to other CAHs and hospitals, and specific definitions as related to the distance requirements are found in the SOM, Chapter 2, Section 2256A.
We proposed to incorporate the definition of a “primary road” in the CAH distance requirement regulations, both as part of the 35-mile drive requirement, and as applicable through the “secondary roads” definition for the 15-mile drive requirement. Specifically, we proposed to revise § 485.610(c) to clarify that the location distance for a CAH is one for more than a 35-mile drive on primary roads (or, in the case of mountainous terrain or in areas with only secondary roads available, a 15-mile drive) from a hospital or another CAH. In addition, at § 485.610(c)(2), we proposed to specify that primary road of travel for determining the driving distance of a CAH and its proximity to other providers as a numbered Federal highway, including interstates, intrastates, expressways or any other numbered Federal highway; or a numbered State highway with two or more lanes each way. We also solicited comments regarding the description of a numbered Federal highway in this proposed definition. Specifically, we requested feedback on whether the definition of “primary roads” should include numbered Federal highways with two or more lanes, similar to the description of numbered State highways, and exclude numbered Federal highways with only one lane in each direction.
We stated that codifying the definition of “primary roads” in the regulations would provide clarity and consistency regarding the distance requirements.
Furthermore, to support these regulatory changes we are planning to establish a centralized, data-driven review procedure that focuses on hospitals being certified in proximity to a CAH, rather than focusing specifically on road classifications. CMS will review all hospitals and CAHs within a 50-mile radius of each CAH during each review of eligibility, and then subsequently on a 3-year cycle. Following the initial review of distance and location, further investigations would focus primarily on expanded healthcare capacity and access to care within the 35-mile radius of the CAH being examined and less on the actual roadway designations used in making the calculations. Those CAHs with no new hospitals within 50 miles would be immediately recertified. Those CAHs with new hospitals within 50 miles will receive additional review based on the distance from the new hospital and the definitions for “primary roads” and “mountainous terrain”. To facilitate this review, the CAH Distance Analysis Committee and the CMS Survey Operations Group (SOG) Locations will utilize the geocoding of hospitals to identify those CAHs that are located within 50 miles of another certified hospital. Those CAHs that do not meet the regulatory distance and location requirements at the time of review would be identified as no longer qualified and may lose their CAH status. We believe this change will help surveyors to make evidence-based and objective determinations of continued CAH eligibility. We expect the new distance review procedure, coupled with regulatory clarity on the proposed primary roads definition, will provide greater consistency in evaluating if CAHs meet the statutory 35 or 15-mile distance requirements from other acute care hospitals and CAHs as well greater adherence to statutory language by ensuring that CAHs operate under the CAH designation until, or unless, a hospital moves within 35 miles or 15 miles of the existing CAH.
With regard to adding a “secondary roads” definition in the CAH distance requirements regulations, we do not believe that it is necessary to include a definition of “secondary roads” in the regulations text at this time. As stated, we remain committed to providing reducing burden for providers in meeting the distance criteria. Currently, we believe the language at § 485.610(c) coupled with guidance in the SOM, Chapter 2, Section 2256A regarding the application of the 15-mile drive standard based on secondary roads adequately describes how we determine what constitutes a secondary road. Specifically, this language states that to be eligible for the lesser distance standard due to the secondary road criteria under § 485.610(c), the CAH would have to document that there is a drive of more than 15 miles between the CAH and any hospital or other CAH where there are no primary roads. We also plan to continue to allow a CAH to qualify for application of the “secondary roads” criterion if there is a combination of primary and secondary roads between it and any hospital or other CAH, so long as more than 15 of the total miles from the hospital or other CAH consists of areas in which only secondary roads are available. We will continue to monitor this issue to determine if further refinements to the description of secondary roads are necessary for future rulemaking.
After consideration of the public comments, we are finalizing the language at § 485.610(c) as proposed. In addition, we are finalizing the language at § 485.610(c)(2) with a modification, to specify a primary road of travel for determining the driving distance of a CAH and its proximity to other providers is a numbered Federal highway, including interstates, intrastates, expressways or any other numbered Federal highway with two or more lanes each way; or a numbered State highway with two or more lanes each way.
We proposed to establish a CoP for patient's rights for CAHs at § 485.614 that would set forth the rights of all patients to receive care in a safe setting and provide protection for a patient's emotional health and safety as well as their physical safety. This would include proposed requirements for the CAH to inform patients of and exercise their rights; address privacy and safety;
At § 485.614(a), we proposed that a CAH must inform each patient, or when appropriate, the patient's representative (as allowed under state law), of the patient's rights, in advance of furnishing or discontinuing patient care whenever possible. This includes a proposal to require the CAH to establish a process for the oversight and prompt resolution of patient grievances and for informing each patient whom to contact to file a grievance.
At § 485.614(b), we proposed to specify those rights a patient has regarding their medical care, which includes the right to participate in the development and implementation of their plan of care, to make informed decisions regarding their care, to be fully informed about such care, and the right to request or refuse treatment, and finally the right to have a family member or representative of their choice and their own physician notified promptly of their admission to the hospital. We note that this right must not be construed as a mechanism to demand the provision of treatment or services deemed medically unnecessary or inappropriate. In addition, we proposed to specify that the patient also has the right to formulate advance directives and to have CAH staff and practitioners who provide care in the CAH comply with these directives.
At § 485.614(c), we proposed to specify that the patient has the right to personal privacy, receive care in a safe setting, and be free from all forms of abuse or harassment. At § 485.614(d), we proposed to specify that patients have the right to the confidentiality of their medical records and the right to access their medical records. We proposed that the CAH must provide the patients with their records in a form and format requested by the requestor when requested and within a reasonable timeframe, as not to frustrate the legitimate efforts of individuals to gain access to their own medical records.
At § 485.614(e), we proposed patients' rights relating to the use of restraints and seclusion less burdensome than those for hospitals because given the level of services provided by CAHs and their patient volume, we expect the likelihood of their need to utilize restraints and seclusion to be relatively low.
Specifically, we proposed to specify that all patients would have the right to be free from physical or mental abuse, and from corporal punishment and from restraint or seclusion, of any form, imposed as a means of coercion, discipline, convenience, or retaliation by staff. We proposed that restraint or seclusion could only be imposed to ensure the immediate physical safety of the patient, a staff member, or others and would have to be discontinued at the earliest possible time. We proposed to define “restraint” as any manual method, physical or mechanical device, material, or equipment that immobilizes or reduces the ability of a patient to move their arms, legs, body, or head freely; or a drug or medication when it is used as a restriction to manage the patient's behavior or restrict the patient's freedom of movement, and is not a standard treatment or dosage for the patient's condition. A restraint does not include devices, such as orthopedically prescribed devices, surgical dressings or bandages, protective helmets, or other methods that involve the physical holding of a patient for the purpose of conducting routine physical examinations or tests, or to protect the patient from falling out of bed, off of a stretcher, or out of a chair, or to permit the patient to participate in activities without the risk of physical harm (this does not include a physical escort). We proposed to define “seclusion” as the involuntary confinement of a patient alone in a room or area from which the patient is physically prevented from leaving. Seclusion may only be used for the management of violent or self-destructive behavior.
At § 485.614(e)(2), we proposed to require that the restraint or seclusion could only be used when less restrictive interventions had been determined to be ineffective to protect the patient a staff member or others from harm. At § 485.614(e)(3), we proposed to require that the type or technique of restraint or seclusion used would have to be the least restrictive intervention that would be effective to protect the patient, a staff member, or others from harm. At § 485.614(e)(4) we proposed to require the CAH to have written policies and procedures regarding the use of restraint and seclusion that are consistent with current standards of practice. These requirements will allow for the CAH to use restraints and seclusion in the event that either or both were necessary, and only as a last resort to respond to immediate safety concerns. However, the CAH provision would reduce the burden and allow for more flexibility than the current hospital CoP. We believe that allowing the CAH the flexibility to develop their own policies and procedures for restraints and seclusion based on the scope of services they provide is necessary given their patient volumes, populations, and access to resources. The policies and procedures would have to be consistent with current standards of practice.
At § 485.614(f), we proposed to establish that the patient would have the right to safe implementation of restraint or seclusion by trained staff. We proposed that the CAH would have to provide competency-based training and education of CAH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the CAH, on the use of restraint and seclusion. To ensure that the use of restraint and seclusion for patients receiving services in a CAH would be respectful of, and responsive to, individual patient preferences, needs and values, we proposed to require that the training be patient-centered. Additionally, to ensure that staff would be educated and trained on using the least restrictive intervention necessary for the safety of the patients and CAH staff, we proposed at § 485.614(f)(2) to require that the CAH train their staff in alternatives to the use of restraint and seclusion. Staff should have trauma-informed knowledge competencies and be aware of effective de-escalation techniques that could be used to avoid the use of restraint and seclusion so not to trigger any previous mental health issues because of the use of restraints and seclusion. Trained peer workers (people who share similar experiences of being diagnosed with mental health conditions, substance use disorders, or both) and CHWs could also serve a useful role in assisting patients and other staff. This could include helping to monitor use of restraint and seclusion, deescalating interactions with patients and contributing to a positive and supportive environment for patients, family members, and CAH staff. CAHs are encouraged to consider the use of peer workers and CHWs in their staffing plans. For further information, please see the 2007 guidance on use of peers in the Medicaid program (
The proposed CAH death reporting requirements were similar to the hospital requirements at § 482.13. At § 485.614(g), we proposed to establish requirements that CAHs must follow when reporting deaths associated with the use of seclusion or restraint. Specifically, we proposed to require that the CAH report to CMS, by telephone, facsimile, or electronically, as determined by CMS, no later than the close of business on the next business day the following information—(1) Each death that occurs while a patient is in restraint or seclusion; (2) Each death that occurs within 24 hours after the patient has been removed from restraint or seclusion; (3) Each death known to the CAH that occurs within 1 week after restraint or seclusion, where it is reasonable to assume that use of restraint or placement in seclusion contributed directly or indirectly to a patient's death, regardless of the type(s) of restraint used on the patient during this time. We note that “reasonable to assume” in this context would include, but is not limited to, deaths related to restrictions of movement for prolonged periods of time, or death related to chest compression, restriction of breathing, or asphyxiation.
For instances when no seclusion had been used and when the only restraints used on the patient were those applied exclusively to the patient's wrist(s), and composed solely of soft, non-rigid, cloth-like materials, the CAH staff would have to record in an internal log or other system, the following information—(1) Any death that occurred while a patient was in such restraints; (2) Any death that occurred within 24 hours after a patient had been removed from such restraints. Furthermore, we proposed that staff also document in the patient's medical record the date and time the death was reported to CMS or recorded in the internal log or other system. Also, for instances when no seclusion had been used and when the only restraints used on the patient were those applied exclusively to the patient's wrist(s),we proposed to require that entries into the internal log or other system would have to be documented no later than seven days after the date of death of the patient, and include the patient's name, date of birth, date of death, name of attending physician or other licensed practitioner who is responsible for the care of the patient, medical record number, and primary diagnosis(es), and be made available in either written or electronic form to CMS immediately upon request.
We proposed to redesignate § 485.635(f) as § 485.614(h). At § 485.614(h), we proposed to establish new requirements in addition to the existing requirements for CAHs related to a patient's visitation rights. Specifically, we proposed to require that a CAH would have to have written policies and procedures regarding the visitation rights of patients, including those setting forth any clinically necessary or reasonable restriction or limitation that the CAH may need to place on such rights and the reasons for the clinical restriction or limitation. However, we note that the requirements at § 485.614(f) are existing requirements for CAHs and our intent is to redesignate these existing requirements for patient visitation as § 485.614(h).
After consideration of the public comments we received, we are finalizing as proposed.
In alignment the current standards for hospitals, we proposed at § 485.631(e) to allow for either a unique medical staff for each CAH or for a unified and integrated medical staff shared by multiple hospitals, CAHs, and REHs within a health care system. We proposed to require that a CAH ensure that the medical staff members of each separately certified CAH in the system (that is, all medical staff members who hold specific privileges to practice at that CAH) have voted by majority, in accordance with medical staff bylaws, either to accept a unified and integrated medical staff structure or to opt out of such a structure and to maintain a separate and distinct medical staff for their respective CAH.
In addition, we proposed to require that the unified and integrated medical staff have bylaws, rules, and requirements that described its processes for self-governance, appointment, credentialing, privileging, and oversight, as well as its peer review policies and due process rights guarantees, and which include a process for the members of the medical staff of each separately certified CAH (that is, all medical staff members who hold specific privileges to practice at that CAH) to be advised of their rights to opt out of the unified and integrated medical staff structure after a majority vote by the members of that specific certified CAH to maintain a separate and distinct medical staff for their CAH. We proposed that the unified and integrated medical staff be established in a manner that would take into account each CAH's unique circumstances, and any significant differences in patient populations and services offered in each CAH. Lastly, we proposed that the unified and integrated medical staff give due consideration to the needs and concerns of individual members of the medical staff, regardless of practice or location, and the CAH has mechanisms in place to ensure that issues specific to particular CAHs are duly considered and addressed.
In proposing this allowance for CAHs in the requirements here, we considered this past rulemaking experience with those multi-hospital systems using the single governing body and unified and integrated medical staff model for separately certified hospitals within their systems, as well as our decision to also propose this flexibility for REHs, and applied the same model to CAHs within single governing body systems. As we continue to do with hospitals, we thought it is in the best interest of CAHs, medical staff members, and patients to proposed this requirement allowing for the use of a unified and integrated medical staff for a multi-facility system and its member CAHs, in order to enable the medical staff of each
Similar to our standard in the hospital CoPs, we proposed a standard at § 485.649(h) for CAHs that would allow for the governing body of a CAH that is part of a system consisting of multiple separately certified hospitals, CAHs, and/or REHs using a single system governing body that is legally responsible for the conduct of two or more hospitals, CAHs, and/or REHs, to elect to have unified and integrated infection prevention and control and antibiotic stewardship programs for all of its member facilities, including any CAHs, after determining that such a decision would be in accordance with all applicable state and local laws. The system's single governing body would be responsible for ensuring that each of its separately certified CAHs meets all of the requirements of this section. We note that each separately certified CAH subject to the system's single governing body would need to demonstrate that the unified and integrated infection prevention and control and antibiotic stewardship programs:
• Were established in a manner that takes into account each member CAH's unique circumstances and any significant differences in patient populations and services offered in each CAH;
• Established and implemented policies and procedures to ensure that the needs and concerns of each of its separately certified CAHs, regardless of practice or location, were given due consideration; and
• Had mechanisms in place to ensure that issues localized to particular CAHs were duly considered and addressed.
The CAH would also need to demonstrate that it had designated a qualified individual (or individuals) with expertise in infection prevention and control and in antibiotic stewardship at the CAH to be responsible for:
• Communicating with the system's unified infection prevention and control and antibiotic stewardship programs;
• Implementing and maintaining the policies and procedures governing infection prevention and control and antibiotic stewardship as directed by the unified infection prevention and control and antibiotic stewardship programs; and
• Providing education and training on the practical applications of infection prevention and control and antibiotic stewardship to CAH staff.
After consideration of the public comments we received, we are finalizing the provisions as proposed.
Consistent with the standard included at § 482.21(f) in the hospital CoPs for QAPI programs, we proposed at § 485.641(f) to allow CAHs that are part of a multi-facility system consisting of multiple separately certified hospitals, CAHs, and/or REHs to elect to have a unified and integrated QAPI program after determining that such a decision is in accordance with all applicable state and local laws. Specifically, we proposed to specify that the system's governing body is responsible and accountable for ensuring that each of its separately certified CAHs meets the proposed QAPI program requirements. We expected that this would be beneficial to CAHs that may lack time, resources, or staff to implement a QAPI program. The CAH would be able to benefit from the resources and expertise of a multi-hospital system in implementing their QAPI program, as well as potentially reducing the time and labor investments required to enact and maintain the program.
We did not receive any public comments on our proposal and therefore, we are finalizing our proposal.
We proposed to make a technical correction to the laboratory services CAH CoP at § 485.635(b)(2). In the September 1, 1994, final rule entitled “Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 1995 Rates” (59 FR 45403), we revised the CAH laboratory services requirement to require the CAH laboratory services to meet the standards imposed under section 353 of the Public Health Service Act (42 U.S.C. 236a). We inadvertently included an error in the referenced Public Health Service Act standard. The referenced standard at § 485.635(b)(2) should read, “. . .353 of the Public Health Service Act (42 U.S.C. 263a).”
The provider agreement and supplier approval requirements for Medicare participating providers and suppliers are located at 42 CFR part 489. Section 489.2 sets forth the basic requirements for submittal and acceptance of a provider agreement under Medicare, with the providers that are subject to the provisions of this part listed at § 489.2(b). We proposed to add REHs to the list of applicable providers at § 489.2(b) and therefore require REHs to adhere to the requirements for submittal and acceptance of provider agreements under Medicare as defined by § 489.3. The requirements at 42 CFR part 489 also set forth requirements for Medicare hospitals in emergency cases. These provisions apply to hospitals that have emergency departments. Under this section, a hospital includes a critical access hospital as defined in section 1861(mm)(1) of the Act. The CAA amends section 1867(e)(5) of the Act by including REHs, as defined in 1861(kkk)(2), as hospitals that have emergency departments. As a result, we are proposed to add REHs to the definitions at § 489.24(b) for Medicare hospitals in emergency cases under the hospital definition and to the definition of a participation hospital.
Section 1866(j)(1)(A) of the Act requires the Secretary to establish a process for the enrollment of providers and suppliers in the Medicare program. The overall purpose of the enrollment process is to help confirm that providers and suppliers seeking to bill Medicare for services and items furnished to Medicare beneficiaries meet all Federal
Section 1861(kkk)(2)(A) of the Act states that REHs must be enrolled under section 1866(j) of the Act. We proposed several regulatory provisions that identify the enrollment requirements with which REHs must comply as part of the enrollment process.
In addition to the previously mentioned requirement for REHs to enroll in Medicare, section 1861(kkk)(4)(B) of the Act states that an REH's enrollment remains in effect until: (1) the REH elects to convert back to its prior designation as a CAH or a hospital (as defined in section 1886(d)(1)(B) of the Act, hereafter occasionally referenced as a “section 1886(d)(1)(B) hospital”); or (2) the Secretary determines that the facility does not meet the requirements for REHs under this subsection. To clarify that our enrollment authority under subpart P applies to REHs to the same extent it does to all other Medicare provider and supplier types, we proposed to add a new § 424.575 to subpart P. Paragraph (a) of § 424.575 would state that an REH (as that term is defined in 42 CFR 485.502) must comply with all applicable provisions and requirements in subpart P in order to enroll and maintain enrollment in Medicare. We noted that these requirements include, but are not limited to, the following:
• Per § 424.510(a)(1) and (d)(1), completion and submission of the applicable enrollment application, which, for REHs, is the Form CMS-855A (Medicare Enrollment Application: Institutional Providers; OMB control number 0938-0685).
• Submission of all required supporting documentation with the enrollment application per § 424.510(d)(1) and (d)(2)(iii).
• Per § 424.510(d)(5), completion of any applicable State surveys, certifications, and provider agreements.
• Reporting changes to any of the REH's enrollment information per § 424.516.
• Revalidation of enrollment per § 424.515.
• Undergoing risk-based screening per § 424.518.
We did not receive any public comments regarding proposed new § 424.575(a). We are therefore finalizing this proposal.
Another requirement in subpart P pertains to application fees. Section 424.514 states that institutional providers submitting an initial or revalidation application, or adding a new practice location, must submit either or both of the following: (1) the applicable application fee (which, for CY 2022, is $631); or (2) a request for a hardship exception to the application fee. The term “institutional provider” is defined (for purposes of the application fee) in § 424.502. It means any provider or supplier that submits a paper Medicare enrollment application using the Form CMS-855A, Form CMS-855B (not including physician and non-physician practitioner organizations) (Medicare Enrollment Application: Clinics/Group Practices and Certain Other Suppliers; OMB control number 0938-1377), Form CMS-855S (Medicare Enrollment Application—Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Suppliers; OMB control number: 0938-1056), or an associated internet-based PECOS enrollment application.
Although an REH must submit a Form CMS-855A to enroll as such, it would not have to pay an application fee with its application. This is because we proposed at new § 424.575(b) that the REH would submit a Form CMS-855A change of information under § 424.516 instead of an initial enrollment application. In other words, the facility would merely be reporting its conversion from a CAH or a section 1886(d)(1)(B) hospital to an REH (as well as submitting any other required information and documentation); it would not be newly enrolling in the Medicare program. We explained in the proposed rule our belief that this would alleviate the burden on prospective REHs and expedite the processing of their Form CMS-855As, for change of information applications typically take less time for Medicare Administrative Contractors (MAC) to process than initial applications. Since this particular REH enrollment transaction would not be an initial enrollment, revalidation, or practice location addition, the fee payment requirement in § 424.514 would not apply.
In addition, we note that § 424.518 outlines provider enrollment screening categories and requirements based on our assessment of the risk of fraud, waste, and abuse posed by a particular category of provider or supplier. In general, the higher the level of risk that a certain provider or supplier type poses, the greater the degree of scrutiny with which we will screen and review enrollment applications submitted by providers or suppliers within that category. There are three levels of screening addressed in § 424.518: limited; moderate; and high. Hospitals currently fall within the limited screening category per § 424.518(a)(1)(viii). This also includes, as stated in § 424.518(a)(1)(viii), CAHs, Department of Veterans Affairs hospitals, and other federally-owned hospital facilities. We have no evidence to suggest that REHs as a category of provider type would present a risk of fraud, waste, and abuse warranting placement in the moderate or high screening level. Accordingly, we proposed to revise § 424.518(a)(1)(viii) to incorporate REHs therein.
We also mentioned in the proposed rule that 42 CFR 424.520 lists the effective dates of billing privileges for enrolling Medicare providers and suppliers. For surveyed, certified, or accredited providers and suppliers, § 424.520(a) states that the effective date of billing privileges is that specified in 42 CFR 489.13. Paragraph (b) of the latter section states, in part, that the provider agreement or approval is effective on the date the state agency, CMS, or CMS contractor survey is completed (or on the effective date of the accreditation decision, as applicable) if, on that date, the provider or supplier meets all applicable Federal requirements. Among these Federal requirements are the previously referenced enrollment requirements in part 424, subpart P; as mentioned in 42 CFR 489.13(b), CMS determines the date on which all enrollment requirements have been met.
Hospitals and CAHs are among the provider types that fall within the scope of § 424.520(a). Since REHs, like other hospitals, would also come within the purview of § 424.520(a), it was unnecessary to revise § 424.520(a) to specifically reference them. We
We received the following comments regarding this proposal:
We stated in the proposed rule that “section 1861(kkk)(4)(B)(i) of the Act references a `conversion' from an REH back to a CAH or a section 1886(d)(1)(B) hospital (rather than termination as an REH and initial enrollment as a CAH or section 1886(d)(1)(B) hospital)” (87 FR 44788). Upon further reflection, we believe this language could convey the erroneous impression that conversions back to a CAH or section 1886(d)(1)(B) hospital merely require a Form CMS-855A change of information application. This statement was not meant to pronounce such a policy. Instead, we cited section 1861(kkk)(4)(B)(i) merely to illustrate the sufficiently close nexus between REHs and CAHs/section 1886(d)(1)(B) hospitals as justification for our proposal to permit a Form CMS-855A change of information application for the initial conversion to an REH. We did not propose anywhere in new § 424.575 to permit Form CMS-855A changes of information for conversions back to CAHs or section 1886(d)(1)(B) hospitals because it was not our intention to do so. To the contrary, § 424.575(a) was specifically meant to apply to such situations, meaning, as stated in the previous paragraph, that an initial Form CMS-855A application would be required consistent with Part 424, subpart P.
We also wish to clarify that although a CAH or section 1886(d)(1)(B) hospital converting to an REH need not submit a separate Form CMS-855A application to voluntarily terminate its enrollment as a CAH or section 1886(d)(1)(B) hospital, its CAH or section 1886(d)(1)(B) hospital enrollment is terminated as part of the REH conversion process. Put another way, merely because the CAH or section 1886(d)(1)(B) hospital need not submit a Form CMS-855A voluntary termination application does not mean it can remain enrolled as such after its conversion to an REH. The facility cannot be enrolled as both an REH and a CAH or section 1886(d)(1)(B) hospital.
Response: We appreciate this comment. We noted previously that our proposal to permit Form CMS-855A change of information submissions was intended in large part to alleviate the burden on REHs and to afford them flexibility in this regard.
After consideration of the public comments we received, we are finalizing our proposals with one minor exception. As a mere technical elucidation, we are inserting the following language in § 424.575(b) immediately following the parenthetical referencing section 1886(d)(1)(B) of the Act: “with not more than 50 beds located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D) of the Act), or treated as being located in a rural area pursuant to section 1886(d)(8)(E) of the Act”. This language is taken from section 1861(kkk)(3)(B) of the Act, and we believe it will further
REHs are prohibited by section 1866(kkk)(2)(B) of the Act from providing inpatient services, other than those that are provided in a distinct part SNF. Section 2 of the Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act) (Pub. L. 114-42), amended section 1866(a)(1) of the Act by adding a new subparagraph (Y) that requires hospitals and CAHs to provide written notification and an oral explanation of such notification to individuals receiving observation services as outpatients for more than 24 hours. The notification must explain the status of the individual as an outpatient, not an inpatient, and the implications of such status. We implemented section 1866(a)(1)(Y), as added by section 2 of the NOTICE Act, in the FY 2017 IPPS/LTCH final rule (81 FR 57037 through 57052).
REHs will furnish emergency department and observation care, and other specified outpatient medical and health services, if elected by the REH, that do not exceed an annual per patient average of 24 hours. There may be instances in which REH patients receive observation services at an REH for a period exceeding 24 hours, but REHs are not required to provide required notification under the NOTICE Act, known as the Medicare Outpatient Observation Notice (MOON), because REHs are excluded from the definition of “hospital” in section 1861(e) and the requirements at section 1866(a)(1)(Y) of the Act apply only to hospitals and CAHs. We understand that there may be occasional circumstances in which a facility is not immediately available to provide a higher level of care, resulting in patients receiving services at an REH for more than 24 hours. Notwithstanding the inapplicability of the NOTICE Act requirements at section 1866(a)(1)(Y) to REHs and the expected infrequency of individuals receiving observation services in REHs for more than 24 hours, CMS solicited comments on the potential need for REHs to notify beneficiaries of their status as outpatients, the implications of such status, and whether the MOON would be the appropriate notice for communicating this information.
We did not receive any public comments on the use of the MOON by REHs, and given the inapplicability of the NOTICE Act requirements to this new provider type, we are not requiring that the MOON be used by REHs.
Section 1877 of the Act, also known as the physician self-referral law: (1) prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship, unless the requirements of an applicable exception are satisfied; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third-party payer) for any improperly referred designated health services. A financial relationship may be an ownership or investment interest in the entity or a compensation arrangement with the entity. The statute establishes a number of specific exceptions and grants the Secretary the authority to create regulatory exceptions for financial relationships that do not pose a risk of program or patient abuse. Section 1903(s) of the Act extends aspects of the physician self-referral prohibitions to Medicaid. (For additional information about section 1903(s) of the Act, see 66 FR 857 through 858.)
The following discussion provides a chronology of our more significant and comprehensive rulemakings; it is not an exhaustive list of all rulemakings related to the physician self-referral law. After the passage of section 1877 of the Act, we proposed rulemakings in 1992 (related only to referrals for clinical laboratory services) (57 FR 8588) (the 1992 proposed rule) and 1998 (addressing referrals for all designated health services) (63 FR 1659) (the 1998 proposed rule). We finalized the proposals from the 1992 proposed rule in 1995 (60 FR 41914) (the 1995 final rule) and issued final rules following the 1998 proposed rule in three stages. The first final rulemaking (Phase I) was a final rule with comment period published in the January 4, 2001
After passage of the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148) (Affordable Care Act), we issued final regulations on November 29, 2010, in the CY 2011 PFS final rule with comment period that codified a disclosure requirement established by the Affordable Care Act for the in-office ancillary services exception (75 FR 73443). We also issued final regulations on November 24, 2010, in the CY 2011 OPPS final rule with comment period (75 FR 71800), on November 30, 2011, in the CY 2012 OPPS final rule with comment period (76 FR 74122), and on November 10, 2014, in the CY 2015 OPPS final rule with comment period (79 FR 66987) that established or revised certain regulatory provisions concerning physician-owned hospitals to codify and interpret the Affordable Care Act's revisions to section 1877 of the Act.
On November 16, 2015, in the CY 2016 PFS final rule, we issued regulations to reduce burden and facilitate compliance (80 FR 71300 through 71341). In that rulemaking, we established two new exceptions to the physician self-referral law, clarified certain provisions of the physician self-referral regulations, updated regulations to reflect changes in terminology, and revised definitions related to physician-owned hospitals. In the December 2, 2020
The referral and billing prohibitions of the physician self-referral law are implicated only when all six of the following elements are present: a physician makes a referral for designated health services payable by Medicare to an entity with which the physician (or an immediate family member of the physician) has a financial relationship. Where all six elements exist, the physician self-referral law prohibits the physician from making a referral for designated health services to the entity with which he or she has the financial relationship unless an exception applies and its requirements are satisfied.
Our regulations at § 411.351 define “entity” to mean a person, sole proprietorship, public or private agency or trust, corporation, partnership, limited liability company, foundation, nonprofit corporation, or unincorporated association that furnishes designated health services. Section 1877(h)(6) of the Act defines “designated health services” to mean any of the following items or services: clinical laboratory services; physical therapy services; occupational therapy services; outpatient speech-language pathology services; radiology services, including magnetic resonance imaging, computerized axial tomography, and ultrasound services; radiation therapy services and supplies; durable medical equipment and supplies; parenteral and enteral nutrients, equipment, and supplies; prosthetics, orthotics, and prosthetic devices and supplies; home health services; outpatient prescription drugs; and inpatient and outpatient hospital services. Under the regulation at § 411.351, only services payable in whole or in part by Medicare are designated health services. Services that are paid by Medicare as part of a composite rate are excluded from the definition of “designated health services.”
The Conditions of Participation (CoPs) for rural emergency hospitals (REH), as finalized in this final rule with comment period, require an REH to furnish radiology and certain imaging services, clinical laboratory services, and outpatient prescription drugs, all of which are designated health services under section 1877(h) of the Act. An REH may elect to provide other designated health services as well. Therefore, with respect to such services furnished to Medicare beneficiaries, an REH would be an
For purposes of the physician self-referral law, a physician has the meaning set forth in section 1861(r) of the Act. A physician makes a referral when the physician requests or orders a designated health service, certifies or recertifies the need for a designated health service, or establishes a plan of care that includes the provision of a designated health service. (If the physician personally performs or provides the designated health service, the physician has not made a referral.) Under the regulations at § 411.354, a physician (or an immediate family member of a physician) has a financial relationship with an entity if the physician (or immediate family member) has a direct or indirect ownership or investment interest in the entity or has a direct or indirect compensation arrangement with the entity.
Once an entity is enrolled in Medicare as an REH, the physician self-referral law would prohibit a
Although there are more than 40 exceptions to the physician self-referral law's prohibitions, only five permit all specified referrals by a physician to an entity in which the physician (or an immediate family member of the physician) has an ownership or investment interest when all requirements of the exception are satisfied. These are the exceptions for publicly traded securities, mutual funds, rural providers (commonly referred to as the “rural provider exception”), hospitals in Puerto Rico, and hospitals outside of Puerto Rico (commonly referred to as the “whole hospital exception”). Nine additional “services” exceptions in § 411.355, when applicable, may permit a physician's referral on a service-by-service basis, but the protection from the law's prohibitions requires an analysis of each referral by the physician and the resulting designated health service furnished by the entity.
We believe that most physician-owned entities that are not publicly traded or hospitals located in Puerto Rico rely on the rural provider and whole hospital exceptions in section 1877(d)(2) and (3) of the Act and in our regulations at § 411.356(c)(1) and (3), respectively. An entity that is a “hospital” for purposes of the physician self-referral law, including a critical access hospital or small rural hospital, may use either the rural provider exception (if applicable) or the whole hospital exception to avoid the law's referral and billing prohibitions, provided that all requirements of the selected exception are satisfied, including requirements set forth in the Affordable Care Act and included in our regulations at § 411.362.
The rural provider exception requires that the designated health services are furnished in a rural area and that the entity furnishes not less than 75 percent of the designated health services that it furnishes to residents of a rural area. For purposes of the physician self-referral law, a rural area is an area that is not an urban area, a term further defined elsewhere in CMS regulations to include certain areas defined by the Executive Office of Management and Budget (OMB). OMB regularly publishes updates to the list of areas that CMS considers to be urban areas. The whole hospital exception is available only to entities that are “hospitals” for purposes of the physician self-referral law. Under § 411.351, a hospital is an entity that qualifies as a “hospital” under section 1861(e) of the Act, as a “psychiatric hospital” under section 1861(f) of the Act, or as a “critical access hospital” under section 1861(mm)(1) of the Act.
Whether an entity furnishes designated health services in a rural area is subject to change as OMB updates the list of areas that CMS considers to be urban areas. Therefore, the continuous applicability of the rural provider exception to a particular entity is not guaranteed. Reliance on the rural provider exception also requires the entity to monitor the residence of the patients to whom it furnishes designated health services in order to ensure that the entity furnishes not less than 75 percent of the designated health services that it furnishes to residents of a rural area. As with the location where designated health services are furnished, whether an individual resides in a rural area is subject to change as OMB updates the list of areas that CMS considers to be urban areas, which may increase the monitoring burden.
Satisfaction of the requirements of the whole hospital exception is not dependent on whether the entity—which must be a hospital for purposes of the exception—furnishes designated health services in a rural area or where its patients reside. However, section
In the CY 2023 OPPS/ASC proposed rule, we stated that we were concerned that, without a broadly-applicable exception to its referral and billing prohibitions for ownership or investment in REHs, the physician self-referral law could inhibit access to medically necessary designated health services furnished by REHs that are owned or invested in by physicians (or their immediate family members) and thwart the underlying goal of section 125 of the CAA to safeguard or expand such access. For this reason, using the Secretary's authority under section 1877(b)(4) of the Act to establish exceptions to the physician self-referral law for financial relationships that do not pose a risk or program or patient abuse, we proposed a new exception at § 411.356(c)(4) for ownership or investment interests in an REH for purposes of the designated health services furnished by the REH. For purposes of this preamble, we refer to this exception as “the proposed REH exception.” We solicited comment on the proposed exception, including whether we should apply more or fewer of the requirements related to physician-owned hospitals to physician ownership of or investment in an REH. We also solicited comment regarding the appropriateness of such requirements in the context of an REH and whether they are necessary to protect against program and patient abuse.
We did not propose any new exceptions for specific designated health services or for compensation arrangements between REHs and physicians (or immediate family members of physicians). We stated our belief that, for the most part, the existing exceptions in §§ 411.355 and 411.357 are sufficiently comprehensive to allow for nonabusive referrals and compensation arrangements between REHs and physicians (or immediate family members of physicians). We noted, however, that certain of the exceptions in existing § 411.357 are applicable only to compensation arrangements between a hospital (or other specific type of entity) and a physician (or an immediate family member of a physician). Because an REH is not considered a hospital for purposes of the physician self-referral law and is not one of the other specific types of entities to which the exceptions currently apply, for the reasons explained in section XVIII.E.5 of the CY 2023 OPPS/ASC proposed rule (87 FR 44799-44800), and using the Secretary's authority under section 1877(b)(4) of the Act, we proposed to amend our regulations to permit an REH to use these exceptions where doing so would not be a risk of program or patient abuse and solicited comments on this approach.
The proposed REH exception would have been available only to entities that are “rural emergency hospitals.” To delineate the scope of the applicability of the proposed REH exception, we proposed to amend § 411.351 to add a definition of “rural emergency hospital” for purposes of the physician self-referral law. Under proposed § 411.351, the term “rural emergency hospital” would have the meaning set forth in section 1861(kkk)(2) of the Act and § 419.91. As proposed, § 419.91 cross-references § 485.502, which was proposed in a separate rulemaking to define “rural emergency hospital” to mean an entity that operates for the purpose of providing emergency department services, observation care, and other outpatient medical and health services specified by the Secretary in which the annual per patient average length of stay does not exceed 24 hours. In addition, under that proposal, the entity must not provide inpatient services, except those in connection with a distinct part unit licensed as a skilled nursing facility to furnish post-hospital extended care services.
We did not receive any comments on the proposed definition of “rural emergency hospital.” Although, as explained in our response to comments below, we are not finalizing the proposed REH exception due to our concern that the exception, as proposed, does not satisfy the standard under section 1877(b)(4) of the Act that financial relationships permitted under exceptions established by the Secretary do not pose a risk of program or patient abuse, the term “rural emergency hospital” is incorporated into the revisions to the exceptions at § 411.357(e), (r), (t), (v), (x), and (y) that we are finalizing in this CY 2023 OPPS/ASC final rule with comment period. Therefore, we are finalizing the definition of “rural emergency hospital” as proposed.
In the CY 2023 OPPS/ASC proposed rule, we explained that section 1877(d) of the Act and § 411.356(c) establish exceptions for ownership of or investment in specific types of providers: rural providers, hospitals located in Puerto Rico, and hospitals located outside of Puerto Rico. These exceptions apply only with respect to referrals for and billing of the specific services identified in the relevant exception. For example, the exception at section 1877(d)(1) of the Act and § 411.356(c)(2) applies to all referrals and billing for designated health services furnished by a hospital located in Puerto Rico. In contrast, the exception at section 1877(d)(2) of the Act and § 411.356(c)(1) applies only to referrals and billing for designated health services that the entity furnishes in a rural area. The proposed REH exception followed the established construct of the existing exceptions for other specific providers and we proposed that it would have applied to all referrals and billing for designated health services furnished by an REH. Thus, if all the requirements of the proposed REH exception were satisfied, the referral and billing prohibitions of the physician self-referral law would not have applied with respect to designated health services referred by a physician who has (or whose immediate family member has) an ownership or investment interest in the REH.
Because all REHs would have been critical access hospitals or small rural hospitals prior to their enrollment in Medicare as an REH, we stated in the CY 2023 OPPS/ASC proposed rule that we believed it was appropriate to include in the proposed REH exception program integrity requirements similar to those that apply to hospitals, including critical access hospitals and small rural hospitals, under the rural provider and whole hospital exceptions at § 411.356(c)(1) and (c)(3)(iv). We proposed that these requirements would have applied to an REH even if it was not owned or invested in by physicians (or their immediate family members) when it was a critical access hospital or small rural hospital. We did not propose to include every requirement of existing § 411.362 in the proposed REH
We proposed that the entity must be enrolled in Medicare as an REH. If finalized, the requirement at proposed § 411.356(c)(4)(i) would ensure that a hospital (for purposes of the physician self-referral law) that may technically meet the definition of “rural emergency hospital” but is not enrolled in Medicare as such may not avail itself of the proposed REH exception. We stated that a hospital must instead use the rural provider or whole hospital exception, and all of the requirements in § 411.362 would apply, including the prohibitions on facility expansion and exceeding the aggregate percentage of investment interests held by physicians (and their immediate family members) as of March 23, 2010.
We proposed to require at proposed § 411.356(c)(4)(ii) that the physician's (or immediate family member's) ownership or investment interest is in the entire REH and not merely in a distinct part or department of the REH. This requirement is similar to the requirement at § 411.356(c)(3)(iii) in the whole hospital exception, and we stated that we would interpret it in the same manner for REHs. When the physician self-referral law was first enacted and later amended to apply to referrals of designated health services beyond clinical laboratory services, the Congress included the whole hospital exception to allow physician ownership or investment in hospitals because, at the time, there were a number of rural hospitals in particular where physicians held ownership interests, and avoiding barriers to accessible health care for patients in rural areas was imperative. These hospitals were usually the only hospitals in the area and provided a breadth of services, and therefore, the Congress did not view ownership or investment in the hospital as a significant incentive for self-referral. Even so, the whole hospital exception explicitly prohibited ownership in a subdivision of a hospital because of the concern that if physicians owned only the particular part of a hospital to which they referred—such as a cardiac wing or department—there would be an incentive for self-referral. (
In line with requirements for hospitals under the rural provider and whole hospital exceptions, we proposed to require at § 411.356(c)(4)(iii) that the REH not directly or indirectly condition any ownership or investment interest held or to be held by a physician (or an immediate family member of a physician) on the physician making or influencing referrals to the REH or otherwise generating business for the REH. This proposed requirement is essentially identical to the requirement at existing § 411.362(b)(3)(ii)(B), which applies to hospitals that use the rural provider and whole hospital exceptions, and we stated that we would interpret the requirements applicable to REHs and hospitals in the same way.
In the CY 2023 OPPS/ASC proposed rule, we noted our position that an REH might fail to satisfy this proposed requirement if it requires a specified action or achievement with respect to referrals to or the generation of business for the REH prior to the purchase or receipt of the ownership or investment interest, or requires divestiture of an ownership or investment interest following the occurrence or nonoccurrence of a specified action or achievement with respect to referrals to or the generation of business for the REH. We stated that, for example, we would consider an REH to condition the ownership or investment interest to be held by a physician on the physician making or influencing referrals to the REH or otherwise generating business for the REH if the physician was permitted to purchase an ownership interest in the REH only if the physician had ordered a specific number of advanced imaging services during each of the 2 years prior to the purchase date of the ownership interest. We stated that we would also consider an REH to condition an ownership or investment interest held by a physician on the physician making or influencing referrals to the REH or otherwise generating business for the REH if the REH required the physician to sell their ownership interest back to the REH in the event that they failed to perform a specific percentage of their outpatient surgeries at the REH during the current year or reduced the hours that they work in their private practice below 75 percent of the prior year. Similarly, we stated that the REH may not condition the amount of an ownership or
Like existing § 411.362(b)(3)(ii)(B), which applies to hospitals that use the rural provider and whole hospital exceptions, the requirement at proposed § 411.356(c)(4)(iii), if finalized, would have prohibited policies and conduct that directly or indirectly condition ownership or investment interests held or to be held by a physician (or an immediate family member of a physician) on the physician making or influencing referrals to the REH or otherwise generating business for the REH. We stated that, for purposes of this requirement, an REH directly conditions ownership or investment interests by adopting policies that require a specific number, volume, or value of referrals to or other business for the REH during a particular time period. For example, a requirement that a physician owner of an REH must have ordered at least 50 clinical laboratory tests during three of the prior four quarters to maintain their ownership (or level of ownership) would not satisfy the requirement at proposed § 411.356(c)(4)(iii). We further stated that a policy that permits an immediate family member to purchase an ownership or investment interest in an REH only if their child, who is a physician in private practice, increases the number of patients that they refer to the REH by 25 percent during the calendar year prior to the purchase would not satisfy the proposed requirement. We continued that, if the REH directs the referrals of the physician under a bona fide employment relationship, personal service arrangement, or managed care contract between the REH and the physician, and the directed referral requirement meets all the conditions of § 411.354(d)(4), we would not consider the directed referral requirement to constitute directly or indirectly conditioning an ownership or investment interest held or to be held by a physician (or an immediate family member of a physician) on the physician making or influencing referrals to the REH or otherwise generating business for the REH.
For purposes of this proposed requirement, we stated that we would consider an REH to indirectly condition ownership or investment interests if it adopted policies or standards of another person or organization to establish qualification criteria for purchasing or maintaining ownership or investment interests in the REH and those policies or standards required the physician to make or influence referrals to or generate business for the REH. For example, if an REH required that a physician have active medical staff privileges at the REH to hold an ownership or investment interest in the REH, and also approved the medical staff bylaws that required a minimum of 50 outpatient therapeutic services per year performed or supervised by the physician, the REH would likely not satisfy the requirement at proposed § 411.356(c)(4)(iii). This is because the REH would indirectly adopt the policy mandating a minimum of 50 outpatient therapeutic services per year as the REH's own criteria for qualification to hold an ownership or investment interest in the REH. We recognized that the medical staff of an entity, although accountable to the entity's governing body for the quality of patient care provided by medical staff members to the entity's patients, is independently organized under its own bylaws and establishes the criteria for appointment to the medical staff, credentialing, privileging, and oversight. We also recognized that an entity's medical staff is responsible for peer review, which, to be effective, requires the review of a minimum body of a medical staff member's work in order to determine whether to grant or continue active (or some other category of) medical staff privileges. We did not propose, nor would we be able, to establish a bright-line rule applicable in all instances defining an acceptable number of referrals to or amount of business generated for an entity that a medical staff could require in order to complete effective peer review activities. We stated that such medical staff requirements must directly relate to its peer review obligations—including the evaluation of a physician's (or other practitioner's) individual character, competence, training, experience, and judgment—and not be a proxy for referrals to or the generation of business for the entity. We cautioned that, if an REH adopted a requirement that a physician owner of or investor in the REH must have active privileges at the REH, we would consider it to have effectively (albeit indirectly) adopted a condition that the physician owner must make the same number of referrals to or generate the same amount of business for the REH for purposes of the requirement at proposed § 411.356(c)(4)(iii) as the number of referrals to or amount of business for the REH that is required by the medical staff to hold active privileges at the REH. To illustrate, we stated that, if the REH requires all physician owners or investors to maintain active medical staff privileges, and the REH's medical staff requires a physician to admit and treat a minimum of five patients per year to maintain active privileges, we would consider the REH to require a minimum of five admissions per year for physician owners to hold their ownership interests in the REH. Whether the requirement constitutes prohibited indirect conditioning of ownership or investment in the REH under proposed § 411.356(c)(4)(iii)
We also stated that there are many ways that an REH could indirectly condition an ownership or investment interest held or to be held by a physician (or an immediate family member of a physician) on the physician making or influencing referrals to the REH or otherwise generating business for the REH. For example, an REH could require a physician to earn a minimum number of “points” in a year to maintain the physician's (or an immediate family member's) ownership interest or level of ownership. We noted that this would not per se be prohibited under proposed § 411.356(c)(4)(iii), but if the required points are merely a proxy for referrals to or the generation of business for the REH (for example, if the physician is awarded one point for each designated health service that they order), we would consider the REH to indirectly condition an ownership or investment interest held or to be held by a physician (or an immediate family member of a physician) on the physician making or influencing referrals to the REH or otherwise generating business for the REH. In the CY 2023 OPPS/ASC proposed rule, we stated that an REH could also indirectly condition ownership or investment interests under a points system if it awards points only for a physician's personally performed services but the personally performed services also result in the furnishing of designated health services by the REH. Whether a point system or other condition for ownership or investment in an REH runs afoul of proposed § 411.356(c)(4)(iii) would have required a case-by-case determination. A point system that allows the awarding of only one point per patient closely ties the referral of the patient or the generation of the business to the physician who ordered the designated health service or other REH service and, therefore, would likely not be permissible. In contrast, a point system that awards points for a variety of physician activities, including activities that are not tied to the physician's own referral of the patient or business generated for the REH (such as points for chairing a committee of the REH, serving as an assistant at surgery, or providing a professional consultation for another physician's patient), may be permissible under proposed § 411.356(c)(4)(iii).
As we explained in the MCR final rule, our policies with respect to determining whether compensation is determined in any manner that takes into account the volume or value of a physician's referrals (the “volume or value standard”) or the other business generated by a physician (the “other business generated standard”) have never applied and do not to apply for purposes of analyzing ownership or investment interests for compliance with the physician self-referral law, as none of our exceptions in § 411.356 include a requirement identical or analogous to the volume or value standard or other business generated standard (85 FR 77541). Any guidance regarding our interpretation of the volume or value standard or other business generated standard is not relevant for purposes of applying the exceptions at § 411.356(c)(1) and (3), both of which incorporate the requirements of § 411.362, including the requirement at § 411.362(b)(3)(ii)(B) that a hospital must not condition any physician ownership or investment interests either directly or indirectly on the physician owner or investor making or influencing referrals to the hospital or otherwise generating business for the hospital (85 FR 77541). In the CY 2023 OPPS/ASC proposed rule, we expressly stated that the same is true with respect to the proposed REH exception—our interpretation of the volume or value standard and the other business generated standard is not relevant. Likewise, the interpretations with respect to the proposed REH exception explained in the CY 2023 OPPS/ASC proposed rule (87 FR 44795) are not relevant for purposes of applying the special rules at § 411.354(d)(6) when analyzing compensation arrangements for compliance with the physician self-referral law.
As proposed § 411.356(c)(4)(iii) would have prohibited an REH conditioning any ownership or investment interests held or to be held by a physician (or an immediate family member of a physician) on the physician making or influencing referrals to the REH (or otherwise generating business for the REH). For purposes of the physician self-referral law generally, a physician makes a referral (as defined in § 411.351) by ordering the designated health service, writing a prescription for a designated health service, including the provision of a designated health service in a plan of care, certifying or recertifying the need for a designated health service, or otherwise requesting the designated health service. A physician also makes a referral when the physician requests a consultation with another physician and the consulting physician orders a designated health service to be performed by (or under the supervision of) the consulting physician. (A physician who transfers the care of a patient, in whole or in part, to another physician for specialty or other care to be provided by the other physician—as opposed to a request for a consultation with the other physician—does not make a referral for designated health services ordered or otherwise referred by the other physician.) A physician may make a referral orally, in writing, electronically, or in any other form. We stated that, for purposes of proposed § 411.356(c)(4)(iii), we would have interpreted the making of referrals to an REH in the same way.
In the CY 2023 OPPS/ASC proposed rule, we noted that, with respect to the influencing of referrals to an REH under proposed § 411.356(c)(4)(iii), impactful pressure or persuasion to refer, or an enforceable requirement for or control over the referrals of another, would demonstrate a physician's influence over the referrals of another physician to an REH. We highlighted that, under § 411.351, “referral” is defined in the context of a physician's action or conduct, and stated that we would interpret the term “referral” consistent with its meaning throughout the physician self-referral regulations, and interpret the requirement at proposed § 411.356(c)(4)(iii) to relate only to the influencing of referrals by a physician to the REH. For example, an REH would not satisfy the requirement at proposed § 411.356(c)(4)(iii) if it withheld the opportunity to purchase an ownership or investment interest in the REH from the physician owners of a physician practice unless the practice required all of its employed and contracted physicians to refer all of their patients to the REH for diagnostic testing and clinical laboratory services, or required them to perform all outpatient surgeries at the REH. (We noted that, with respect to the employed and contracted physicians' referrals for designated health services furnished by the physician practice, the requirement for referrals to the REH may be permissible, provided that all requirements of § 411.354(d)(4) are satisfied.)
We proposed that § 411.356(c)(4)(iii) also would prohibit an REH conditioning any ownership or investment interests held or to be held by a physician (or an immediate family member of a physician) on the physician
In the CY 2023 OPPS/ASC proposed rule, we stated our position that a physician may generate business for an REH in a variety of ways, including, but not limited to, ordering services to be furnished or billed by the REH, writing a prescription for a service to be furnished or billed by the REH, establishing a plan of care for services to be furnished or billed by the REH, certifying or recertifying the need for services to be furnished or billed by the REH, or otherwise requesting services to be furnished or billed by the REH. A physician may also generate business for an REH that is unrelated to the REH's furnishing of health care services. We stated that we interpret the generation of business by a physician to include the physician's direct actions and the actions of others whom the physician directs or otherwise influences to generate business for the REH.
We proposed to require at § 411.356(c)(4)(iv) that the REH does not offer any ownership or investment interests to a physician (or an immediate family member of a physician) on terms more favorable than the terms offered to a person that is not a physician (or an immediate family member of a physician). This proposed requirement is essentially identical to the requirement at existing § 411.362(b)(4)(ii), which applies to hospitals that use the rural provider and whole hospital exceptions, and we stated that we would interpret the requirements applicable to REHs and hospitals in the same way. For example, an REH that permits a physician owner or investor to pay for purchased shares in the REH over 5 years while requiring non-physicians to pay the full purchase price in advance of the purchase would not satisfy the proposed requirement. Similarly, an REH could not permit a physician to purchase additional shares in the REH every year while allowing non-physicians to purchase shares only once every 3 years.
We noted that, in the requirement at existing § 411.362(b)(4)(ii) from which this proposed requirement was drawn, the word “who” follows “person.” We stated our belief that the statutory requirement on which that regulation is based is intended to prohibit the offering of ownership or investment interests to physicians (or immediate family members of physicians) on terms more favorable than any other owner of or investor in a hospital. For this reason, we proposed to use the word “that” following “person” to indicate that the person to which less favorable terms are offered could be a natural person (that is, an individual) or a non-natural person (that is, a corporation, partnership, or similar organization).
We proposed at § 411.356(c)(4)(v) to prohibit an REH and the owners of or investors in the REH from directly or indirectly providing loans or financing for any investment in the REH by a physician (or an immediate family member of a physician). This proposed requirement is essentially identical to the requirement at existing § 411.362(b)(4)(iii), which applies to hospitals that use the rural provider and whole hospital exceptions, and we stated that we would interpret the requirements applicable to REHs and hospitals in the same way. For purposes of this proposed requirement, an REH directly provides loans or financing by lending the funds or other assets of the REH for use in purchasing the physician's (or immediate family member's) ownership or investment interest in the REH. In such a case, the REH is the lender. Similarly, an individual or corporate owner of or investor in an REH directly provides loans or financing by lending their own funds or other assets for use in purchasing the physician's (or immediate family member's) ownership or investment interest in the REH.
We also stated that, under our interpretation of the proposed exception, an REH indirectly provides loans or financing for investment in the REH by controlling or meaningfully influencing another person's decision to lend funds or assets for use in purchasing the physician's (or immediate family member's) ownership or investment interest in the REH. In such a case, the REH is not the lender. For example, if an REH is the sole owner of the corporation that loans money to a physician to purchase an ownership or investment interest in the REH, we would consider the REH to indirectly provide the loan because the REH exercises control over its wholly-owned subsidiary corporation. In contrast, merely introducing a physician (or an immediate family member of a physician) to an individual or corporation that might lend funds or assets for use in purchasing an ownership or investment interest in an REH, in the absence of actual control or meaningful influence over the lender's decision whether a loan will be provided, would not constitute the indirect provision of a loan or financing for investment in the REH.
At proposed § 411.356(c)(4)(vi), we proposed to prohibit an REH and the owners of or investors in the REH from directly or indirectly guaranteeing a loan, making a payment toward a loan, or otherwise subsidizing a loan for a physician (or an immediate family member of a physician) that is related to acquiring any ownership or investment interest in the REH. This proposed requirement is essentially identical to the requirement at existing § 411.362(b)(4)(iv), which applies to hospitals that use the rural provider and whole hospital exceptions, and we stated that we would interpret the requirements applicable to REHs and hospitals in the same way. We noted that existing § 411.362(b)(4)(iv) extends the prohibition on guaranteeing, making a payment toward, or otherwise subsidizing a loan to such activities when they are for a group of physician owners or investors, whereas proposed § 411.356(c)(4)(vi) prohibits these activities as they relate to individual physicians (and immediate family members). A group of physician owners or investors is made up of individual physicians and, therefore, the proposed requirement would have also prohibited guaranteeing, making a payment toward,
In the CY 2023 OPPS/ASC proposed rule, we stated that, for purposes of proposed § 411.356(c)(4)(vi), an REH, individual owner of or investor in an REH, or corporate owner of or investor in an REH guarantees a loan when the REH, owner, or investor formally or informally promises the lender that, should a physician (or an immediate family member of a physician) fail to make a required payment on a loan related to the physician's (or immediate family member's) acquisition of any ownership or investment interest in the REH, the REH, owner, or investor, respectively, will make or otherwise ensure that the payment will be made to the lender. A direct guarantee would include pledging the guarantor's own funds or assets as collateral for the guaranteed loan, whereas an indirect guarantee would include pledging or arranging for the pledge of the funds or assets of another individual or corporate entity as collateral for the guaranteed loan. We stated that we would also consider the pledge of funds or assets of an REH, individual owner of or investor in an REH, or corporate owner of or investor in an REH to guarantee a loan for property that serves as collateral for the loan related to acquiring the physician's (or immediate family member's) ownership or investment interest in the REH to be an indirect guarantee of such loan.
We further stated that we would interpret the direct or indirect making of a payment toward a loan similarly. That is, a person directly makes a payment toward a loan by using the person's own funds or assets to make the payment, and indirectly makes a payment toward a loan by using or arranging for the use of the funds or assets of another individual or corporate entity to make the payment. An REH would not have been prohibited from garnishing the wages or other compensation due to a physician (or an immediate family member of a physician) to make loan payments on behalf of the physician (or immediate family member).
Finally, for purposes of proposed § 411.356(c)(4)(vi), we stated that an REH, individual owner of or investor in an REH, or corporate owner of or investor in an REH otherwise subsidizes a loan when the REH, owner, or investor pays part of the cost of a loan for a physician (or an immediate family member of a physician). Subsidies would include, for example, payments to reduce the principal amount of the loan, reduce the interest rate applied to the loan, or cover the cost of fees, such as origination fees, late fees, or early payoff penalties. We stated that, as with guaranteeing or making payments toward a loan, we would interpret directly and indirectly subsidizing a loan to mean that a person directly subsidizes a loan by using the person's own funds or assets to pay part of the cost of the loan, and indirectly subsidizes a loan by using or arranging for the use of funds or assets of another individual or corporate entity to pay part of the cost of the loan.
We proposed to require at § 411.356(c)(4)(vii) that ownership or investment returns are distributed to each owner of or investor in an REH in an amount that is directly proportional to the ownership or investment interest in the REH of such owner or investor. This proposed requirement is essentially identical to the requirement at existing § 411.362(b)(4)(v), which applies to hospitals that use the rural provider and whole hospital exceptions, and we stated that we would interpret the requirements applicable to REHs and hospitals in the same way. Simply put, distributions of profits, dividend payments, and other payouts on equity may only be tied to the number of shares owned by an investor, and not to their referrals or the other business the investor generates for the REH. We stated that we would interpret “proportional” as it is defined in the dictionary: corresponding in size or amount.
Under the proposed REH exception, to ensure that the ownership or investment return to each owner of or investor in the REH is directly proportional to the particular owner's or investor's interest in the REH, we would have required that all owners and investors must be treated the same. That is, if any owner or investor is eligible to receive or actually receives an ownership or investment return, all other owners or investors must be eligible to receive or actually receive an ownership or investment return, respectively. For example, an REH wholly-owned by physicians would not satisfy this proposed requirement if the REH made distributions only to physicians who generate a minimum amount of business for the REH during the ownership or investment period. In addition, an REH could not exclude owners or investors that are not physicians (or their immediate family members) from eligibility for ownership or investment returns for the purpose of making distributions only to owners or investors who are physicians in a position to generate business for the REH or their immediate family members. This would be the case even if the distributions were in amounts that are directly proportional to the physician's (or immediate family member's) ownership or investment interest in the REH.
We also proposed to require that any physician (or immediate family member of a physician) who has an ownership or investment interest in an REH does not directly or indirectly receive any guaranteed receipt of or right to purchase other business interests related to the REH, including the purchase or lease of any property under the control of any other owner of or investor in the REH or located near the premises of the REH. This requirement at proposed § 411.356(c)(4)(viii) is essentially identical to the requirement at existing § 411.362(b)(4)(vi), which applies to hospitals that use the rural provider and whole hospital exceptions. We stated that we would interpret the requirements applicable to REHs and hospitals in the same way.
For purposes of this proposed requirement, we stated that other business interests related to the REH would include a wide array of investment opportunities, ventures, and interests, as well as the examples of the purchase and lease of property under the control of any other owner of or investor in the REH that are listed in the statutory and regulatory requirements applicable to hospitals that use the rural provider and whole hospital exceptions. We stated that we would consider the business interests of any owner of or investor in the REH to be business interests related to the REH. For example, under the proposed requirement at § 411.356(c)(4)(viii), a physician owner of or investor in an REH may not directly or indirectly receive an interest in another component of the health care system that includes an REH upon the physician's purchase of their ownership or investment interest in the REH, nor may the physician owner directly or indirectly be guaranteed the right to invest in a venture in which another owner of the REH is also an investor. In these examples, the physician owner would directly receive an interest or be guaranteed the right to invest in a business interest related to an REH if the interest is held or would be held, if purchased, in the physician's name. We further stated that, in contrast, the physician owner would indirectly receive an interest or be guaranteed the right to invest in a business interest related to an REH if the interest is
Finally, at proposed § 411.356(c)(4)(ix), we proposed to require that an REH does not offer a physician (or an immediate family member of a physician) the opportunity to purchase or lease any property under the control of the REH or any other owner of or investor in the REH on more favorable terms than the terms offered to a person that is not a physician (or an immediate family member of a physician). This proposed requirement is essentially identical to the requirement at existing § 411.362(b)(4)(vii), which applies to hospitals that use the rural provider and whole hospital exceptions, and we stated that we would interpret the requirements applicable to REHs and hospitals in the same way.
We highlighted that there are two main differences between the requirements at proposed § 411.356(c)(4)(viii) and (ix). The former applies to any business interests related to the REH and prohibits the guaranteed receipt of or right to purchase such other business interests. The latter applies only to property under the control of the REH, an owner of the REH, or an investor in the REH, and prohibits the offering of the opportunity to purchase or lease such property on terms more favorable than the terms offered to a person that is not a physician (or an immediate family member of a physician).
With respect to the prohibition on offering an opportunity to purchase or lease property on terms more favorable than the terms offered to a person that is not a physician (or an immediate family member of a physician), we stated that we would interpret this requirement in the same way as proposed § 411.356(c)(4)(iv), which, would prohibit an REH from offering any ownership or investment interests to a physician (or an immediate family member of a physician) on terms more favorable than those offered to a person that is not a physician (or an immediate family member of a physician). We noted that the requirement at existing § 411.362(b)(4)(vii), from which this proposed requirement is drawn, states that the physician owner may not be offered the opportunity to purchase or lease certain property on more favorable terms than those offered to an “individual” who is not a physician owner or investor, in contrast to the requirement at existing § 411.362(b)(4)(ii), which references “persons” in a similar manner. We stated our belief that the statutory requirement on which existing § 411.362(b)(4)(vii) is based is intended to prohibit the offering of the opportunity to purchase or lease the specified property on terms more favorable than any other owner of or investor in a hospital. For this reason, proposed § 411.356(c)(4)(ix) included the words “person that” in the same way as proposed § 411.356(c)(4)(iv) to indicate that the person to which less favorable terms are offered could be a natural person (that is, an individual) or a non-natural person (that is, a corporation, partnership, or similar organization).
Section 1861(e) of the Act excludes critical access hospitals (formerly referred to as rural primary care hospitals) from the definition of “hospital” for most purposes of Title XVIII of the Act unless the context otherwise requires. However, as we explained in the 1998 proposed rule, we believe that the reference to context in this statutory provision indicates that critical access hospitals may be deemed to be hospitals where, in specific contexts, it is consistent with the purpose of the legislation to do so (63 FR 1681). For that reason, we included such entities in our definition of “hospital” at § 411.351 (66 FR 954). We based this policy on our belief that a physician who has a financial relationship with a critical access hospital is in as much of a position to profit from overutilizing referrals to the critical access hospital as they would be if the financial relationship was with an ordinary hospital. In addition, a critical access hospital provides services that are very similar to inpatient hospital services (63 FR 1681).
Section 125 of the CAA amended section 1861(e) of the Act to also exclude REHs from the definition of “hospital” for most Medicare purposes, unless the context otherwise requires. We considered whether to include REHs in the definition of “hospital” in § 411.351 for purposes of the physician self-referral law similar to our treatment of critical access hospitals. We did not propose to do so for two primary reasons. First, REHs are not the same as critical access hospitals (or other hospitals that furnish inpatient care). By definition, an REH may not furnish inpatient care, a fundamental attribute of and requirement for a hospital for purposes of Medicare. (See section 1861(e) of the Act.) Second, if we were to consider an REH to be a hospital for purposes of the physician self-referral law, in order for an REH to avoid the law's referral and billing prohibitions, the ownership or investment interests of physicians (and their immediate family members) would have to satisfy the requirements of one of the existing exceptions applicable to such ownership or investment interests, which could prove challenging, thus limiting the ability of such potential investors to bring needed resources to underserved and rural communities. We explained that, if we had proposed to include REHs as “hospitals” for purposes of the physician self-referral law, we would not have proposed to establish the exception for ownership or investment in an REH with the requirements described in the proposed rule because we do not believe that the Secretary's authority under section 1877(b)(4) of the Act would permit us to establish an exception that applies to only one type of hospital (for purposes of the physician self-referral law) without including the same (or equally stringent) program integrity requirements established by the Congress in statute.
To avoid the physician self-referral law's referral and billing prohibitions under the rural provider or whole hospital exception, an ownership or investment interest must satisfy the requirements of the applicable exception at the time of the physician's referral and the hospital must meet the requirements of section 1877(i) of the Act and § 411.362 no later than September 23, 2011. Section 1877(i)(1)(A) of the Act and § 411.362(b)(1) require that the hospital had physician ownership or investment on December 31, 2010, and a provider agreement under section 1866 of the Act on that date (emphasis added). Put another way, for a hospital to bill Medicare (or another individual, entity, or third-party payer) for a designated health service furnished as a result of a physician owner's referral today, the hospital must have had both physician ownership or investment and a Medicare provider agreement on December 31, 2010. Thus, the hospital submitting the claim today must be the same hospital that had both physician ownership or investment and a Medicare provider agreement on December 31, 2010. We stated that, if we were to include REHs as hospitals for
Critical access hospitals and small rural hospitals that had physician ownership on March 23, 2010 and December 31, 2010 and a Medicare provider agreement in effect on December 31, 2010 may avail themselves of the rural provider and whole hospital exceptions, provided that all other requirements of the applicable exception are satisfied. This would continue after conversion to an REH if we deemed REHs to be hospitals for purposes of the physician self-referral law. However, as noted above, the REH/hospital would have to be the same hospital that had physician ownership on March 23, 2010 and December 31, 2010 and a Medicare provider agreement in effect on December 31, 2010 (the “original hospital”). We would consider many factors when determining whether an REH would qualify as the same hospital that had physician ownership on March 23, 2010 and December 31, 2010 and a Medicare provider agreement in effect on December 31, 2010 including, but not limited to: status of, type of, and party to the State license for both the REH and the original hospital, including any lapses in State licensure or operation of either the REH or the original hospital; status of and party to the Medicare provider agreement, including any lapses in Medicare participation of either the REH or the original hospital; whether the REH has the same Medicare provider number as the original hospital; the location and structure of the REH building(s) and those of the original hospital; whether the REH is under the same State's licensure regime as the original hospital; whether the REH serves the same community as the original hospital; whether the REH provides the same scope of services as the original hospital; REH ownership and that of the original hospital; and the number of operating rooms, procedure rooms, and beds operated by the REH and that of the original hospital. No one factor would be dispositive.
As noted above, we are finalizing the definition of “rural emergency hospital” as proposed. For the reasons explained in the following responses to public comments, we are not finalizing our proposal to establish an exception at § 411.356(c)(4) for ownership or investment in an REH.
Some of the commenters that urged CMS not to finalize the REH exception raised concerns regarding the adequacy of the program integrity protections of the proposed REH exception. These commenters asserted that the REH exception, as proposed, falls outside the Secretary's authority under section 1877(b)(4) of the Act to establish regulatory exceptions only for financial relationships that do not pose a risk of program or patient abuse. The commenters disagreed with our rationale for not including certain of the program integrity requirements imposed on hospitals that use the whole hospital and rural provider exceptions, and opined that the proposed exception would impose less of a burden on REHs than the whole hospital and rural provider exceptions pose for physician ownership or investment in hospitals. One of the commenters maintained that, when relying on the authority provided in section 1877(b)(4) of the Act, CMS should not create an exception for ownership or investment in an REH with requirements that are less rigorous than those set forth by the Congress for the type of entity from which the REH converted. This commenter urged that, if CMS adopts an REH-specific exception for physician ownership or investment, we should include in the final exception all requirements applicable to physician ownership or investment in hospitals under the whole hospital and rural provider exceptions, including prohibitions on facility expansion, transparency requirements, and patient safety requirements. This recommendation was endorsed by other commenters. None of the commenters suggested potential program integrity requirements alternative to the existing requirements in the statute and our regulations applicable to physician ownership or investment in hospitals, although some noted that the REH exception as proposed would not prevent physician-owned REHs from limiting the services they offer to those most likely to be highly reimbursed or profitable (“cherry-picking”), choosing not to offer less profitable services or treat sicker and costlier patients (“lemon dropping”), and engaging in other behaviors that would have negative effects on care for beneficiaries in rural areas. Despite their opposition to the REH-specific exception for ownership or investment in an REH, the commenters did not object to CMS treating REHs as “hospitals” for purposes of the physician self-referral law instead of finalizing the proposed REH exception.
Any exception to the physician self-referral law established by the Secretary under section 1877(b)(4) of the Act that permits physician ownership or investment in REHs must include sufficient program integrity requirements to ensure that such ownership or investment interests do not pose a risk of program or patient abuse. After reviewing the comments on the CY 2023 OPPS/ASC proposed rule, we believe that the REH exception—as proposed—may not meet the requirement of section 1877(b)(4) of the Act that the physician ownership or investment interests it would permit do not pose no risk of patient or program abuse. We considered the comments that encouraged CMS to include existing requirements for physician-owned hospitals in any final REH exception. We decline to do so because we continue to believe that certain of the requirements that are currently applicable to hospitals, such as the limitation on expansion of the aggregate number of operating rooms, procedure rooms, and beds for which the hospital was licensed on March 23, 2010, are not suitable for application to REHs. Commenters did not suggest alternative program integrity criteria that, if included in the exception, would satisfy the statutory requirement that permitted financial relationships do not pose a risk of program or patient abuse. Therefore, we are not finalizing the proposed REH exception at this time.
Because they are not “hospitals,” REHs located in rural areas, as defined in § 411.351, may use the rural provider exception in section 1877(d)(2) of the Act and codified at § 411.356(c)(1), without application of the additional requirements for hospitals in § 411.362. As set forth in statute and incorporated into our regulations without additional requirements, the rural provider exception is available to entities located in rural areas and has only one substantive requirement. Specifically, the entity must furnish substantially all (not less than 75 percent) of the designated health services it provides to residents of rural areas. We emphasize that the “substantially all” requirement at § 411.356(c)(1) applies only to designated health services furnished by an entity. As applied to an REH, this means that the REH must furnish not less than 75 percent of the designated health services that it furnishes (such as radiology and other imaging services) to residents of a rural area, but would not need to monitor the residence of patients to whom it provides any services that are not considered designated health services under § 411.351.
In the proposed rule, we recognized that monitoring the residence of beneficiaries receiving designated health services could be burdensome for REHs. Even so, we believe that REHs that are located in rural areas and primarily serve beneficiaries who reside in rural areas will have no difficulty meeting this threshold. The monitoring burden would most likely be limited to REHs that are located in rural areas but have service areas that encompass urban areas as well. As described in section XXIV.G and H of this CY 2023 OPPS/ASC final rule with comment period, we expect only a limited number of CAHs and small rural hospitals will convert to REHs; therefore, any monitoring burden under the rural provider exception would be limited to only those few REHs located in rural areas but that have service areas that encompass urban areas.
Section 1877(e) of the Act and § 411.357 set forth exceptions to the physician self-referral law's referral and billing prohibitions for compensation arrangements between entities and physicians (or immediate family members of physicians) that satisfy all requirements of the exception. Some of these exceptions apply only to specified types of compensation, specified types of entities, or both. The exceptions in § 411.357 that are applicable only to compensation arrangements to which one party is a hospital, federally qualified health center, or rural health clinic would not be available to an REH because it is not a hospital under section 1861(e) of the Act or our regulations at § 411.351. We believe that many of these party-limited exceptions could be important to ensuring access to necessary designated health services and other care furnished by an REH. Therefore, using the Secretary's authority under section 1877(b)(4) of the Act, we proposed to revise the exceptions at § 411.357(e), (r), (t), (v), (x), and (y) to make them applicable to compensation arrangements to which an REH is a party.
The existing exceptions for physician recruitment (§ 411.357(e)), obstetrical malpractice insurance subsidies (§ 411.357(r)), retention payments in underserved areas (§ 411.357(t)), and assistance to compensate a nonphysician practitioner (§ 411.357(x)) are available to hospitals, federally qualified health centers, and rural health clinics. We proposed to revise these exceptions to also permit an REH to provide remuneration to a physician if all requirements of the applicable exception are satisfied because we believe that REHs will face the same challenges as hospitals, federally qualified health centers, and rural health clinics in recruiting and retaining qualified physicians and other practitioners in their service areas. Consistent with our rationale when expanding the statutory exception for physician recruitment to federally qualified health centers (69 FR 16095), we proposed the extension of these exceptions to REHs to help ensure that the physician self-referral law does not impede efforts by REHs, which will provide substantial services to underserved populations, to recruit, assist with the recruitment of, and retain adequate staffs. We do not believe that a compensation arrangement between an REH and a physician (or an immediate family member of a physician) that is properly structured to satisfy all the requirements of these exceptions would pose a risk of program or patient abuse. We also proposed a technical amendment at proposed § 411.357(t)(5) to cross-reference the definition of the geographic area served by a federally qualified health center or rural health clinic that was previously omitted from this paragraph. As proposed, the cross-referenced definition would also apply to REHs under this proposal.
The existing exception for electronic prescribing items and services at
The existing exception for timeshare arrangements at § 411.357(y) is available only to hospitals and certain physician organizations (as defined in § 411.351) and applies to arrangements for the use of premises, equipment, personnel, items, supplies, and services. One of the underlying policy considerations for establishing this exception was to facilitate access to care in rural and other underserved areas (80 FR 71326). We believe that timeshare arrangements between REHs and physicians (or physician organizations in whose shoes such physicians stand under § 411.354(c)) may similarly increase access to necessary care for patients in underserved areas, and that it would be appropriate to extend the availability of the exception for timeshare arrangements to REHs. We do not believe that a compensation arrangement between an REH and a physician (or an immediate family member of a physician) that is properly structured to satisfy all the requirements of the exception would pose a risk of program or patient abuse.
We are finalizing without modification our proposal to revise the exceptions at § 411.357(e), (r), (t), (v), (x), and (y) to make them applicable to compensation arrangements to which an REH is a party. Our responses to the public comments we received on these proposals are below.
As discussed in section XVIII.E of this final rule with comment period, the rural provider exception applies to designated health services furnished in a rural area. Section 1877(d)(2) of the Act defines “rural area” by reference to section 1886(d)(2)(D) of the Act. In the 1992 proposed rule, we proposed to define “rural area” as an area that is not an “urban area,” as the term is the term is defined at § 412.62(f)(1)(ii) (57 FR 8598). Section 412.62 established the Federal rates for inpatient operating costs for fiscal year 1984. We finalized the definition of “rural area,” including the reference § 412.62(f)(1)(ii), in the 1995 final rule (60 FR 41980). In the FY 2005 IPPS final rule, CMS revised the definitions of urban and rural areas based on OMB's revised standards for defining Metropolitan Statistical Areas (MSAs) (69 FR 49077). The revised definitions of urban and rural areas were codified at § 412.64(b). Section 412.64 establishes Federal rates for inpatient operating costs for Federal fiscal year 2005 and subsequent fiscal years. Despite the revised definition of rural and urban areas in the FY 2005 IPPS final rule, the definition of “rural area” as codified in § 411.351 for purposes of the physician self-referral law was never updated to reflect OMB's revised standards for defining MSAs. As a consequence, the current definition of “rural area” in § 411.351 includes, by reference to § 412.62(f)(1)(ii), terminology that is no longer employed by OMB, such as “New England County Metropolitan Area (NECMA)” (see, for example, 65 FR 51065). To ensure that the definition of “rural area” for purposes of the physician self-referral law is aligned with CMS' updated definitions of rural and urban areas at § 412.64 and takes into account OMB's revised standards for defining MSAs, we proposed to modify the definition of “rural area” in § 411.351 to reference § 412.64(b) instead of § 412.62(f). Specifically, we proposed to define “rural area” as an area that is not an urban area as defined at § 412.64(b) of this chapter. We believe that this technical change will have no effect on the entities that qualify as “rural providers” under § 411.356(c)(1). We solicited comment on this proposal.
We did not receive any public comments on our proposal. We are finalizing without modification the proposed technical change to the definition of “rural area” at § 411.351.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44800 through 44802), we included a Request for Information (RFI) related to the use of CMS data to drive competition in healthcare marketplaces. We received approximately 21 timely pieces of correspondence that were submitted in response to the Competition RFI questions. Additionally, we received 180 pieces of correspondence (176 of the 180 submissions were form letters) related to CMS' hospital price transparency efforts and its role in driving competition, generally. We thank all interested parties for their comments and will take them into consideration in the future.
In the CY 2020 OPPS/ASC final rule with comment period, we established a prior authorization process for certain hospital OPD services (84 FR 61142, 61446 through 61456) using our authority under section 1833(t)(2)(F) of the Act, which allows the Secretary to develop “a method for controlling unnecessary increases in the volume of covered OPD services.”
Paragraph (a)(1) of § 419.83 lists the specific service categories for which prior authorization must be obtained for service dates on or after July 1, 2020, which are: (i) Blepharoplasty; (ii) Botulinum toxin injections; (iii) Panniculectomy; (iv) Rhinoplasty; and (v) Vein ablation. Paragraph (a)(2) of § 419.83 lists two additional service categories for which prior authorization must be obtained for service dates on or after July 1, 2021, which are: (i) Cervical Fusion with Disc Removal; and (ii) Implanted Spinal Neurostimulators. Paragraph (b) states that CMS will adopt the list of hospital outpatient department service categories requiring prior authorization and any updates or geographic restrictions through formal notice-and-comment rulemaking. Additionally, paragraph (c) describes the circumstances under which CMS may elect to exempt a provider from the prior authorization process, and paragraph (d) states that CMS may suspend the prior authorization process generally or for a particular service at any time by issuing a notification on the CMS website.
In accordance with § 419.83(b), we proposed to require prior authorization for a new service category: Facet Joint Interventions. We proposed adding the new service category at § 419.83(a)(3). We also proposed that the prior authorization process for this additional service category would be effective for dates of services on or after March 1, 2023. As explained more fully below, the proposed addition of this service category is consistent with our authority under section 1833(t)(2)(F) of the Act and is based upon our determination that there has been an unnecessary increase in the volume of these services. Because we proposed that prior authorization would be required for this service category at a later date than for the first seven service categories, we proposed to revise paragraph (a)(3) to include this new service category and reflect the March 1, 2023 implementation date for the prior authorization requirement for this additional service category. Specifically, we proposed that paragraph (a)(3) would read, “[t]he Facet Joint Interventions service category requires prior authorization beginning for service dates on or after March 1, 2023.” We also proposed that existing paragraph (a)(3) be moved to paragraph (b), and that paragraph (b) be revised by modifying the heading to read, “Adoption of the list of services and technical updates.” We also proposed to re-designate the current paragraph (b) as paragraph (b)(1). We proposed that paragraph (b)(1) would provide that CMS will adopt the list of hospital outpatient department service categories requiring prior authorization and any updates or geographic restrictions through formal notice-and-comment rulemaking. We proposed that current paragraph (a)(3) would be moved to new paragraph (b)(2) and provide that technical updates to the list of services, such as changes to the name of the service or CPT code, will be published on the CMS website.
We proposed that the Facet joint interventions service category would consist of facet joint injections, medial branch blocks, and facet joint nerve destruction. Facet joint injections are procedures in which a practitioner injects medication into the facet joints (the connections between the bones of the spine) to help diagnose the cause and location of pain and also to provide pain relief. Medial branch block is a procedure in which a medication is injected near the medial branch nerve connected to a specific facet joint to achieve pain relief. Facet joint nerve destruction (also known as nerve denervation) is a procedure that uses heat to destroy the small area of the facet joint nerve for pain management.
We proposed that the list of proposed additional OPD services in the Facet joint interventions service category that would require prior authorization beginning on March 1, 2023, are those identified by the CPT codes in Table 103. For ease of review and brevity, we only included in the regulation text in proposed new § 419.83(a)(3) the name of the service category, but not the CPT codes that fall into that service category, which are listed in Table 103. Note that this is the same approach we took in establishing the initial five service categories in § 419.83(a)(1) and two additional service categories in § 419.83(a)(2). Again, we proposed that the prior authorization process for the proposed additional service category would be effective for dates of service on or after March 1, 2023. We proposed an effective date slightly earlier in the calendar year (compared to July 1, 2020, and July 1, 2021, effective dates for the service categories previously added to the prior authorization regulation) because Medicare Contractors, CMS, and the OPD providers already have knowledge of and experience with the prior authorization process. Also, this new service category can be performed by some of the same provider types who furnish other services currently subject to the OPD prior authorization process, such as implanted spinal neurostimulators and cervical fusion with disc removal.
As part of our responsibility to protect the Medicare Trust Funds, we noted in the proposed rule that we continue our routine analysis of data associated with all aspects of the Medicare program. This responsibility includes monitoring the total amount or types of claims submitted by providers and suppliers; analyzing the claims data to assess the growth in the number of claims submitted over time (for example, monthly and annually, among other intervals); and conducting comparisons of the data with other relevant data, such as the total number of Medicare beneficiaries served by providers, to help ensure the continued appropriateness of payment for services furnished in the hospital OPD setting.
In the proposed rule, we noted that we reviewed approximately 1 billion claims related to OPD services during the 10-year period from 2012 through 2021. We determined that the overall rate of OPD claims submitted for payment to the Medicare program increased each year by an average rate of 0.6 percent. This equated to an increase from approximately 105 million OPD claims submitted for payment in 2012 to approximately 111 million claims submitted for payment in 2021. The 0.6 percent rate reflects a decrease when compared to the 2.8 percent rate identified in the CY 2021 OPPS/ASC proposed rule when we looked at the period from 2007 through 2018. Our analysis also showed an average annual rate-of-increase in the Medicare allowed amount (the amount that Medicare would pay for services regardless of external variables, such as beneficiary plan differences, deductibles, and appeals) of 4.2 percent. Again, this is a decrease when compared to the 7.8 percent rate identified in the CY 2021 OPPS/ASC proposed rule for a slightly earlier timeframe. The decrease in the average annual increase in the claim volume and allowed amount from the increases
In the proposed rule, we noted that our analysis of Integrated Data Repository (IDR)
As noted in the proposed rule, when analyzing the data, we took the COVID-19 Public Health Emergency (PHE) into consideration. As a result of the PHE, healthcare use and spending dropped sharply due to cancellations of elective and non-emergency care to increase hospital capacity and social distancing measures to reduce the community spread of the coronavirus. Consequently, the claims data for CY 2020 showed a significant decrease in volume compared to the previous year, which is likely due to the PHE. However, over the 9-year period of our analysis, services for Facet joint interventions demonstrated increases. These volume increases led us to further research the reasons behind them to determine if they were unnecessary.
We also noted in the proposed rule that the Department of Health and Human Services' Office of the Inspector General (OIG) had published multiple reports indicating questionable billing practices, improper Medicare payments, and questionable utilization of Facet joint interventions. An OIG report published in 2020 identified $748,555 in improper payments out of $3.3 million in paid Medicare claims for facet joint injections with an audit period from January 1, 2017, through May 31, 2019. The OIG recommended that CMS and its contractors provide additional oversight on claims for facet joint injections to prevent additional improper payments.
In the proposed rule, we said that our conclusion that increases in volume for facet joint services are unnecessary was based not only on the data specific to this service category but also on a comparison of the rate of increase for the service category to the overall trends for all OPD services. We noted our belief that comparing the utilization rate for the particular service category to the overall rate of growth for Medicare OPD services generally is an appropriate method for identifying unnecessary increases in volume, particularly where there are no legitimate clinical or coding reasons for the changes. We researched possible causes for the increases in volume that would indicate the services are increasingly necessary, but we did not find any explanations that would cause us to believe that was the case. In the proposed rule, we reaffirmed our belief that prior authorization is an effective mechanism to ensure Medicare beneficiaries receive medically necessary care while protecting the Medicare Trust Funds from unnecessary increases in volume by virtue of improper payments without adding onerous new documentation requirements. A broad program integrity strategy must use a variety of tools to best account for potential fraud, waste, and abuse, including unnecessary increases in volume. We believe prior authorization for these services will be an effective method for controlling unnecessary increases in the volume of these services and expect that it will reduce the instances in which Medicare pays for services that are determined not to be medically necessary. We solicited comments on the addition of this service category and specifically requested comments on the potential for any unintended clinical consequences from the addition of this service category.
We received 69 comments on this proposal, including comments from healthcare providers, professional and trade organizations, and device manufacturers. The following is a summary of the comments we received and our responses.
Additionally, we note that our prior authorization policy does not create any new documentation requirements. Instead, it requires hospitals to submit the same documents needed to support claim payments, just earlier in the process. Therefore, HOPDs should not need to divert resources from patient care. We note that prior authorization has the added benefit of giving hospitals some assurance of payment for services for which they received a provisional affirmation. In addition, beneficiaries have information regarding coverage prior to receiving the service and benefit from knowing in advance of receiving the service if they will incur financial liability because the service is non-covered. CMS will continue tracking MAC timeliness metrics and is confident that the MACs will continue to meet the required review and decision timeframes to avoid causing an additional burden for HOPDs or delaying medically necessary services.
Although we believe CMS and MACs have sufficient resources to manage additional prior authorization requests, we acknowledge the commenters' concerns about the proposed March 1, 2023, implementation date for the new service category. While we explained in the proposed rule that the effective date for the new service category would be March 1, 2023, because MACs, CMS, and HOPDs already have knowledge of and experience with the prior authorization process, we recognize that all participants would benefit from additional time to prepare for the addition of Facet joint interventions service category to the prior authorization processes. Accordingly, we are finalizing an implementation date for prior authorization for the Facet joint interventions service category of July 1, 2023, which is consistent with previous July 1 implementation dates for current service categories.
Commenters are correct that many services in other categories for which we require prior authorization are cosmetic, while services in the Facet joint intervention service category are not. We also acknowledge the benefits that Facet joint intervention services offer for chronic pain. However, we reiterate that these are non-emergency procedures that require the beneficiary to undergo at least 3 months of conservative treatment prior to the procedure. For that reason, these procedures generally are elective.
In sum, we continue to believe prior authorization is an effective mechanism to ensure Medicare beneficiaries receive medically necessary care while protecting the Medicare Trust Funds from unnecessary increases in volume by virtue of improper payments without adding onerous new documentation requirements. A broad program integrity strategy must use a variety of tools to best account for potential fraud, waste, and abuse, including unnecessary increases in volume. We believe prior authorization for these services will be an effective method for controlling unnecessary increases in the volume of these services and expect that it will reduce the instances in which Medicare pays for services that are determined not to be medically necessary.
After consideration of the public comments we received, we are finalizing our proposal to add the Facet joint interventions service category to the list of hospital outpatient department services requiring prior authorization with modification. In particular, we are finalizing an implementation date for prior authorization for the Facet joint interventions service category of July 1, 2023, rather than the March 1, 2023 implementation date we proposed and making this change in the proposed regulation text at § 419.83(a)(3). Other than this change in the implementation date, we are finalizing the proposed regulation text changes as proposed.
The Overall Hospital Quality Star Rating provides a summary of certain existing hospital quality information based on publicly available quality measure results reported through CMS programs in a way that is simple and easy for patients to understand, by assigning hospitals between one and five stars (85 FR 86193). The Overall Hospital Quality Star Rating was first introduced and reported on our Hospital Compare website in July 2016
In the CY 2023 OPPS/ASC proposed rule (87 FR 44807-44809), we: (1) provided information on the previously finalized policy for inclusion of quality measure data from Veterans Health Administration (VHA) hospitals; (2) proposed to amend the language of § 412.190(c) to state that we would use publicly available measure results on Hospital Compare or its successor websites from a quarter within the prior twelve months; and (3) conveyed that although CMS intends to publish Overall Hospital Quality Star Ratings in 2023, we may apply the suppression policy if applicable.
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 86197 and 86198), we finalized a policy to include Veterans Health Administration hospitals' (VHA hospitals) quality measure data for the purpose of calculating the Overall Hospital Quality Star Ratings beginning with the 2023 refresh. In that final rule, we also stated that we intended to provide more information about the statistical impact of adding VHA hospitals to the Overall Star Rating and discuss procedural aspects in a future rule (85 FR 48999). Since the publication of the CY 2021 OPPS/ASC final rule, we conducted an internal analysis from February 28, 2022, through March 30, 2022, with measure data from all VHA hospitals in the calculation of the Overall Hospital Quality Star Ratings methodology. The internal analysis included a period of confidential reporting and feedback during which VHA hospitals reviewed their Overall Hospital Quality Star Ratings internal analysis results, and in addition, further familiarized themselves with the Overall Hospital Quality Star Ratings methodology and had the opportunity to ask questions. All VHA hospitals were made aware of the internal analysis and were provided the opportunity to participate. For the internal analysis, the Overall Hospital Quality Star Ratings were calculated using VHA hospital measure data along with subsection (d) hospitals and CAHs. The internal analysis included the same measures used for the April 2021 refresh of Overall Hospital Quality Star Ratings on our public reporting website, Care Compare. At the time of the 2022 VHA internal analysis, VHA hospitals in each peer group reported a similar number of measures when compared to non-VHA hospitals for most measure groups. VHA hospitals in the five-measure group peer group reported a lower median number of Safety and Readmission measures. VHA hospitals in all three peer groups reported fewer measures in the Timely and Effective Care measure group. The measurement periods for VHA and non-VHA hospitals were the same, except for the HAI-1, HAI-2, PSI 04, PSI 90, and OP-22 measures. The specific performance periods for these measures were provided to VHA hospitals during the internal analysis. The reasons for the differing measure reporting periods are:
• The HAI-1 and HAI-2 measures were first publicly reported for VHA hospitals in July 2021, but only included one quarter of measure data. Therefore, we chose to use the next public reporting, April 2022, which included four quarters of these measures' data.
• For the PSI 04 and PSI 90 measures, we used measure data that were publicly reported in July 2021. VHA hospitals first publicly reported these measures in October 2020; however, a different software was used for the measure calculations than the software used to calculate subsection (d) hospitals and CAHs measure data. We
• For the OP-22 measure, VHA hospitals began submitting their measure data in January 2021 for public reporting.
• For the HIP/KNEE measures (total hip arthroplasty (THA) and total knee arthroplasty (TKA)), we used measure data that were publicly reported in October 2020. These data did not initially include VHA hospitals, so we recalculated to include them. The recalculated results including VHA hospitals was not publicly reported until July 2021.
Using these data from the internal analysis, we compared 2021 Overall Hospital Quality Star Ratings scores for non-VHA hospitals before and after adding VHA hospitals to Overall Hospital Quality Star Ratings. 119 out of 171 VHA hospitals met the requirements to receive a Star Rating. This increased the number of hospitals receiving a star rating from 3,355 to 3,474. The distribution of Star Ratings was nearly identical for VHA and non-VHA hospitals. As part of the Overall Hospital Quality Star Ratings methodology, hospitals are assigned to peer groups based on the number of measure groups with at least three measures. Peer group assignments were similar across VHA and non-VHA hospitals. In Peer Group 3, assignments were 12 percent VHA vs. 10 percent non-VHA; in Peer Group 4, assignments were 25 percent VHA vs. 16 percent non-VHA; and in Peer Group 5, assignments were 63 percent VHA vs. 74 percent non-VHA). 3,119 (93 percent) non-VHA hospitals maintained the same number of stars after adding VHA hospitals to 2021 Overall Hospital Quality Star Ratings. For the 236 non-VHA hospitals with a different star rating, 23 gained a star and 213 lost a star. No hospital gained or lost more than one star. As with any update to either the underlying measures or the Overall Hospital Quality Star Ratings methodology, we expect that some hospitals would shift star rating categories. However, for this internal analysis, over 90 percent of non-VHA hospitals did not experience a change in their Overall Hospital Quality Star Ratings score, which is consistent with prior changes to the measures or methodology in our experience. As previously finalized, we intend to include VHA hospitals in future Overall Hospital Quality Star Ratings.
While we did not make any proposals for VA hospital data in the proposed rule, we received some comments, which we are summarizing below.
While the results of the VHA hospital Star Rating internal analyses demonstrated that VHA hospitals report fewer measures on average, 63 percent of VHA hospitals still reported at least three measures in all five measure groups, which landed them in the five-measure group peer group (87 FR 44808). Many hospitals that report fewer measures than VHA hospitals are included in Overall Star Ratings, and we believe it is important for the public to have access to Overall Star Ratings for as many hospitals as possible, while still adhering to the Overall Star Ratings guiding principles to:
• Use scientifically valid methods that are inclusive of hospitals and measure information and able to accommodate underlying measure changes;
• Align with Care Compare or its successor website and CMS programs;
• Provide transparency of the methods for calculating the Overall Star Rating; and
• Be responsive to stakeholder input.
We also disagree that including Overall Star Ratings scores for VHA hospitals will cause confusion among VHA patients who are also Medicare beneficiaries. Publishing Overall Star Ratings for VHA hospitals will allow dual VHA/Medicare beneficiaries to have more complete information about the quality of care for hospitals in their area and empower them to make health care decisions, in part, based on performance on the underlying Overall Star Ratings measures. In our internal analysis, 3,119 (93 percent) of non-VHA hospitals maintained the same number of stars after adding VHA hospitals to the 2021 Overall Star Ratings (87 FR
While we did not make any proposals for VHA hospital data in the proposed rule, we appreciate related stakeholder feedback that we received.
In the CY 2023 OPPS/ASC proposed rule (87 FR 44807), we proposed to amend our policy regarding the data periods used to refresh Overall Hospital Quality Star Ratings. In the CY 2021 OPPS final rule with comment period, we stated that “we would use publicly available measure results on Hospital Compare or its successor websites from a quarter within the prior year” to refresh Overall Hospital Quality Star Ratings (85 FR 86202). As discussed in the CY 2023 OPP/ASC proposed rule, since adopting that policy, it has come to our attention that this wording could be confusing. We intended for the phrase “within the prior year” to refer to any time within the prior 12 months, and not to a Care Compare refresh from the prior calendar year. Therefore, we proposed to change § 412.190(c) to provide that the Overall Star Rating are published once annually using data publicly reported on Hospital Compare or its successor website from a quarter within the previous 12 months. For example, for the Overall Hospital Quality Star Ratings in July 2023, we would use any Care Compare refreshes from the previous 12 months: July 2023, April 2023, January 2023, October 2022, or July 2022.
We invited public comments on this proposal.
After consideration of the public comments we received, we are finalizing the proposal as proposed and thank the commenters for their input.
During development of the Overall Hospital Quality Star Ratings, we established guiding principles to use methods that are scientifically valid, inclusive of hospitals and measure information, account for the heterogeneity of available measures and hospital reporting, and accommodate changes in the underlying measures (85 FR 86193).
We discussed in the CY 2023 OPPS/ASC proposed rule (87 FR 44807) that we recognize there may be some concerns with publishing Overall Hospital Quality Star Ratings if the underlying measures reflect some aspect of extenuating circumstances, for example, skewed data or performance related to treating patients with COVID-19. However, we want to balance that with providing important quality information to Medicare beneficiaries and the public during times when hospital care is critical. The goal of the Overall Hospital Quality Star Ratings is to summarize hospital quality information in a way that is simple and easy for patients to understand to increase transparency and empower patients to make more informed decisions about their healthcare.
Although Overall Hospital Quality Star Ratings will have been refreshed twice (that is, in 2021 and 2022) since the emergence of COVID-19, almost all measures included in both Overall Hospital Quality Star Ratings refreshes used pre-COVID-19 data to calculate both the 2021 and 2022 Overall Star Ratings. This is because we issued a nationwide Extraordinary Circumstance Exception (ECE) for hospitals and other facilities participating in our quality reporting and value-based purchasing programs in response to the COVID-19 Public Health Emergency (PHE). The ECE can be found at this website:
If a measure is considered valid and reliable enough to be reported on Care Compare then it meets the criteria to be included in Overall Hospital Quality Star Ratings calculations (85 FR 86193 through 86236). This remains true even for measures that were suppressed in certain pay-for-performance programs due to the impact of COVID-19 (86 FR 45301 through 45304). Consistent with this policy, we will continue to include measures in the Overall Hospital Quality Star Ratings that might have been suppressed in the Hospital Value-Based Purchasing, Hospital-Acquired Condition Reduction, and Hospital Readmissions Reduction Programs but are still publicly reported (86 FR 44778 through 44779).
In the CY 2021 OPPS/ASC final rule with comment period (85 FR 48996 through 49027), we finalized that we will allow for suppression, but only in limited circumstances. Specifically, for the Overall Hospital Quality Star Rating beginning with the CY 2021 and for subsequent years, we adopted a policy that we would consider suppressing the Overall Star Rating only under extenuating circumstances that affect numerous hospitals (as in, not an individualized or localized issue) as determined by CMS or when CMS is at fault, including but not limited to when—
There is an Overall Star Rating calculation error by CMS;
There is a systemic error at the CMS quality program level that substantively affects the Overall Hospital Star Rating calculation. For example, there is a CMS quality program level error for one or more measures included within the Overall Star Rating due to incorrect data processing or measure calculations that affects a substantial number of hospitals reporting those measures. We note that we would strive to first correct systemic errors at the program level per program policies and then recalculate the Overall Star Rating, if possible; or
A Public Health Emergency substantially affects the underlying measure data.
This is codified at § 412.190(f)(1). Although we intend to publish the Overall Hospital Quality Star Rating in 2023, we may exercise the authority described above should the COVID-19 PHE substantially affect the underlying measure data.
While we did not make any proposals for the suppression of Overall Star Ratings in the proposed rule, we appreciate related stakeholder feedback that we received.
In this final rule with comment, we are responding to public comments and stating our final policies for certain provisions in the IFC titled “Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” (CMS-1744-IFC), which appeared in the April 6, 2020
For purposes of Medicare payment, section 1861(b) of the Act defines inpatient hospital services in part as the following items and services furnished to an inpatient of a hospital and (except as provided in paragraph (3)) by the hospital: (1) bed and board; (2) such nursing services and other related services, such use of hospital facilities, and such medical social services as are ordinarily furnished by the hospital for the care and treatment of inpatients, and (3) such other diagnostic or therapeutic items or services, furnished by the hospital or by others under arrangements with them made by the hospital, as are ordinarily furnished to inpatients either by such hospital or by others under such arrangements.
Routine services in the hospital setting are those described in sections 1861(b)(1) and (b)(2) of the Act, under the definition of “inpatient hospital services.” Under our historical policy for hospital services furnished under arrangements that we adopted in the FY 2012 IPPS/LTCH PPS rulemaking (76 FR 51714), routine services cannot be provided under arrangement outside the hospital. Only the therapeutic and diagnostic services described in section 1861(b)(3) of the Act can be provided under arrangement outside the hospital.
In the April 6, 2020 IFC (85 FR 19278), we provided an overview of the FY 2012 IPPS/LTCH PPS rulemaking, which set forth the rationale and statutory basis for our under arrangements policy. In particular, we stated in the FY 2012 rulemaking that we believe this policy is consistent with the statute because the statutory language specifying that the routine services described in sections 1861(b)(1) and (b)(2) of the Act be provided “by the hospital” suggests that the hospital is required to exercise professional responsibility over the services, including quality controls. In situations in which certain routine services are provided through arrangement “in the hospital,” for example, contracted nursing services, we stated that we believe the arrangement generally results in the hospital exercising the same level of control over those services as the hospital does in situations in which the services are provided by the hospital's salaried employees.
Therefore, if routine services are provided in the hospital to its inpatients, we consider the service as being provided by the hospital. However, if these services are provided to its patients outside the hospital, the services are considered as being provided under arrangement, and not by the hospital. Therefore, consistent with the statute, we stated that only therapeutic and diagnostic services can be provided under arrangement outside the hospital.
Furthermore, we noted that, at the time of the FY 2012 rulemaking, we were aware that some hospitals were furnishing certain routine services, including ICU services, under arrangement, which we believed might result in inappropriate and potentially excessive Medicare payments for such services in certain circumstances. We explained that limiting the furnishing of routine services under arrangements to situations in which the services are furnished in the hospital would reduce the opportunity for gaming and ensure that the hospital exercises sufficient control over the use of hospital resources when furnishing these services.
For additional details on our prior rulemaking, refer to the discussion in section II.CC.2 of the April 6, 2020 IFC (85 FR 19278) and the FY 2012 IPPS/LTCH PPS final rule (76 FR 51711).
As we noted in the April 6, 2020 IFC (85 FR 19279), while we continue to believe that our historical policy is consistent with the statute and appropriate for the reasons discussed in the FY 2012 IPPS/LTCH PPS rulemaking, we wished to give hospitals that provide services to Medicare beneficiaries additional flexibilities to respond effectively to the serious public health threats posed by the spread of COVID-19. Recognizing the urgency of this situation, and understanding that some pre-existing Medicare payment rules might inhibit use of capacity that might otherwise be effective in the efforts to mitigate the impact of the pandemic on Medicare beneficiaries and the American public, we changed our “under arrangements” policy during the PHE for the COVID-19 pandemic beginning March 1, 2020, so that hospitals could be allowed broader flexibilities to furnish inpatient services, including routine services outside the hospital's campus or premises.
We believe that our concerns articulated in the FY 2012 rulemaking
Moreover, we stated that we did not believe that the statute would preclude this temporary change in policy to allow routine services to be provided under arrangements outside the hospital, in light of the compelling circumstances and the need for additional, short-term flexibility during the current PHE for the COVID-19 pandemic. Consistent with this, we noted that we received comments during the FY 2012 rulemaking stating that our policy to limit the services a hospital may provide under arrangements is not required by the statute and that CMS' reading of the statutory definition of “inpatient hospital services” is only one possible interpretation of the statute.
While we changed our under arrangements policy during the PHE for the COVID-19 pandemic to allow hospitals broader flexibilities in furnishing inpatient services, we emphasized in the April 6, 2020 IFC that we were not changing our policy that a hospital needs to exercise sufficient control and responsibility over the use of hospital resources in treating patients, as discussed in the FY 2012 IPPS/LTCH PPS final rule and Section 10.3 of Chapter 5 of the Medicare General Information, Eligibility, and Entitlement Manual (Pub. 100-01). Nothing in the current PHE for the COVID-19 pandemic has changed our policy or thinking with respect to this issue and we made no modifications to this aspect of the policy. We emphasized that hospitals need to continue to exercise sufficient control and responsibility over the use of hospital resources in treating patients regardless of whether that treatment occurs in the hospital or outside the hospital under arrangements. If a hospital cannot exercise sufficient control and responsibility over the use of hospital resources under arrangements, the hospital should not provide those services outside the hospital under arrangements.
After consideration of the comments received, and for the reasons discussed, we are finalizing without modification our policy that, effective for services provided for discharges for patients admitted to the hospital during the PHE for COVID-19 beginning March 1, 2020 until the end of the PHE, if routine services are provided under arrangements outside the hospital to its inpatients, these services are considered as being provided by the hospital. We are not changing our policy that a hospital needs to exercise sufficient control and responsibility over the use of hospital resources in treating patients regardless of whether that treatment occurs in the hospital or outside the hospital under arrangements. When the COVID-19 PHE ends, and consistent with the policy adopted in the FY 2012 IPPS/LTCH PPS rulemaking, for purposes of Medicare payment, only the therapeutic and diagnostic items and services described in section 1861(b)(3) of the Act may be furnished under arrangements outside the hospital. If routine services are provided in the hospital to its inpatients, these services will be considered as being provided by the hospital. However, if these services are provided to patients outside the hospital, the services will be considered as being provided under arrangement, and not by the hospital.
In the April 6, 2020-IFC (85 FR 19269), we included provisions revising 42 CFR 415.172, 415.174, 415.180, 415.184, and 415.208 for the duration of the PHE that allowed a hospital to claim a resident for indirect medical education (IME) or direct graduate medical education (DGME) if the resident is performing patient care activities within the scope of his or her approved program via telecommunications, in his or her own home, or in a patient's home. This allowed medical residents to perform their duties in alternate locations, including their own home or a patient's home, as long as the activities meet appropriate physician supervision requirements, which could also be met via telecommunications participation.
In this section of this final rule, we are responding to the public comments that we received on these provisions in the April 6, 2020 IFC and finalizing the interim policies.
In this final rule with comment period, we are finalizing the provisions of the April 6, 2020 IFC without modification, to allow a hospital to claim a resident for IME or DGME if the resident is performing patient care activities within the scope of his or her approved program in his or her own home, or in a patient's home for the duration of the COVID-19 PHE. We note, when the COVID-19 PHE ends, a hospital may not count a resident for purposes of Medicare DGME payments or IME payments if the resident is performing activities with the scope of his/her approved program in his/her own home, or a patient's home. This policy does not require any changes to the regulations text.
Under 42 CFR 412.622(a)(3)(iv), for an inpatient rehabilitation facility (IRF) claim to be considered reasonable and necessary under section 1862(a)(1) of the Act, there must be a reasonable expectation at the time of the patient's admission to the IRF that the patient requires physician supervision by a rehabilitation physician, defined as a licensed physician with specialized training and experience in inpatient rehabilitation. The requirement for medical supervision means that the rehabilitation physician must conduct face-to-face visits with the patient at least 3 days per week throughout the patient's stay in the IRF to assess the patient both medically and functionally, as well as modify the course of treatment as needed to maximize the patient's capacity to benefit from the rehabilitation process. The purpose of the physician supervision requirement is to ensure that the patient's medical and functional statuses are being continuously monitored as the patient's overall plan of care is being carried out.
We note that, in the FY 2021 IRF PPS final rule (85 FR 48450 through 48453), we amended the IRF coverage requirements to allow, beginning with the second week of admission to the IRF, a nonphysician practitioner who is determined by the IRF to have specialized training and experience in inpatient rehabilitation to conduct 1 of the 3 required face-to-face visits with the patient per week, provided that such duties are within the non-physician practitioner's scope of practice under applicable state law.
We continue to believe that it is in the patient's best interest to be seen in person by a rehabilitation physician (or, in accordance with the revised regulations, a nonphysician practitioner) to assess their medical and functional statuses while at the IRF, and we encourage rehabilitation physicians (or, in accordance with the revised regulations, nonphysician practitioners) to continue to visit IRF patients in person as long as all necessary precautions, including the use of PPE, are taken to ensure the health and safety of the patient and the physician. However, in the April 6, 2020 IFC (85 FR 19252), we stated that we would temporarily allow the face-to-face visit requirements at §§ 412.622(a)(3)(iv) and 412.29(e) to be conducted via telehealth to safeguard the health and safety of Medicare beneficiaries and the rehabilitation physicians (or, in accordance with the revised regulations, the nonphysician practitioners) treating them during the PHE for the COVID-19 pandemic. This provision allowed rehabilitation physicians (or, in accordance with the revised regulations, nonphysician practitioners) to use telehealth services, as defined in section 1834(m)(4)(F) of the Act, to conduct the required 3 physician visits per week during the PHE for the COVID-19 pandemic. By increasing access to telehealth, we believe that this provision has provided the necessary flexibility for Medicare beneficiaries to be able to receive medically necessary services without jeopardizing their health or the health of those who are providing those services, while minimizing the overall risk to public health.
We received several comments on the flexibility allowing rehabilitation physicians (or, in accordance with the revised regulations, nonphysician practitioners) to use telehealth services as defined in section 1834(m)(4)(F) of the Act to conduct the required 3 physician visits per week during the COVID-19 PHE, which are addressed below.
After carefully considering the comments we received, and for the reasons discussed, we are finalizing without modification our policy that during the COVID-19 PHE, rehabilitation physicians (or, in accordance with the revised regulations, nonphysician practitioners) may use telehealth services as defined in section 1834(m)(4)(F) of the Act to conduct the 3 physician visits required under §§ 412.622(a)(3)(iv) and 412.29(e). When the COVID-19 PHE ends, rehabilitation physicians (or, in accordance with the revised regulations, nonphysician practitioners) will be required to visit IRF patients face-to-face at least 3 times per week. To effectuate these changes, we are finalizing without modification the revisions to the regulations at §§ 412.622(a)(3)(iv) and 412.29(e) described within the April 6, 2020 IFC.
In the April 6, 2020 IFC (85 FR 19245 through 19246) we altered, for the duration of the PHE, the definition of direct supervision at §§ 410.32(b)(3)(ii) and 410.28(e), to state that the necessary presence of the physician includes virtual presence through audio/video real-time communications technology when use of such technology was indicated to reduce exposure risks for the beneficiary or health care provider. We similarly altered the definition of direct supervision of pulmonary, cardiac and intensive rehabilitation at § 410.27(a)(1)(iv)(D), to state that the necessary presence of the physician 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.
In the CY 2021 PFS final rule (85 FR 84538 through 84540), we revised § 410.32(b)(3)(ii) to extend the duration of the altered definition of direct supervision until the later of December 31st, 2021, or the end of the calendar year in which the PHE ends. In the CY 2021 OPPS final rule (85 FR 86110 through 86113), we revised § 410.27(a)(1)(iv)(D) to extend the duration of the altered definition of direct supervision of pulmonary, cardiac and intensive rehabilitation until the later of December 31st, 2021 or the end of the calendar year in which the PHE ends.
In the CY 2023 OPPS proposed rule (87 FR 44834 through 44835), we proposed to revise § 410.28(e) to extend the duration of the altered definition of direct supervision from the end of the PHE to the end of the calendar year in which the PHE ends for consistency with §§ 410.32(b)(3)(ii) and 410.27(a)(1)(iv)(D). In section X.E of this final rule with comment period, we are finalizing the revisions to § 410.28(e) as proposed.
In the CY 2023 OPPS proposed rule (87 FR 44679 through 87 FR 44680), we solicited comment as to whether we should extend the duration of the altered definition of direct supervision of pulmonary, cardiac and intensive rehabilitation through the end of CY 2023. Based on the comments we received in response to our solicitation, in section X.C of this final rule with comment period, we are finalizing revisions to § 410.27(a)(1)(iv)(D) to extend the duration of the altered definition of direct supervision of pulmonary, cardiac and intensive rehabilitation until the later of December 31st, 2023, or the end of the calendar year in which the PHE ends.
We refer readers to the April 6, 2020 IFC (85 FR 19245 through 19246), CY 2021 PFS final rule (85 FR 84538 through 84540), CY 2021 OPPS final rule (85 FR 86110 through 86113) and the above referenced sections of this CY 2023 OPPS final rule for a more detailed discussion of the reasoning behind our revisions to §§ 410.32(b)(3)(ii), 410.28(e), and 410.27(a)(1)(iv)(D).
In this final rule with comment we are also responding to public comments and stating our final policies for certain provisions in the IFC titled “Medicare and Medicaid Programs, Basic Health Program, and Exchanges; Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency and Delay of Certain Reporting Requirements for the Skilled Nursing Facility Quality Reporting Program” (CMS-5531-IFC), which appeared in the May 8, 2020
In the May 8, 2020 IFC (85 FR 27567 through 27568), we implemented several policies on an interim final basis related to holding hospitals harmless from reductions in IME payments due to increases in bed counts during the COVID-19 PHE. As discussed later in this section of this CY 2023 OPPS/ASC final rule, we also implemented a policy to hold IRFs and IPFs harmless from reductions to teaching status adjustment payments due to COVID-19. We refer readers to the May 8, 2020 IFC, for an overview of IME (85 FR 27567).
We received public comments on the policies that we adopted on an interim basis in the IFC provisions related to the holding hospitals harmless from reductions in IME payments due to increases in bed counts due to COVID-19 (85 FR 27567 through 27568). The following is a summary of the comments we received and our responses.
In this final rule with comment period, we are finalizing the provisions of the May 8, 2020 IFC without modification, allowing a hospital to maintain the same available bed count as it was on the day before the COVID-19 PHE was declared, for the duration of the COVID-19 PHE. When the COVID-19 PHE ends, any added beds will be considered in determining the hospital's IME payments.
As we discussed in the May 8, 2020 IFC (85 FR 27567 through 27568), we were asked by IRFs and IPFs if CMS can hold facilities harmless from a reduction in teaching status adjustment payments resulting from the temporary increase in facilities' ADC due to the influx of COVID-19 patients. We were concerned that, if a teaching IRF or IPF accepts patients from the inpatient acute care hospital to alleviate bed capacity during the PHE for the COVID-19 pandemic, the IRF's or IPF's ADC would increase, which would artificially decrease the IRF's or IPF's ratio of number of interns and residents to ADC and thereby decrease the facility's teaching status adjustment. To ensure that teaching IRFs or teaching IPFs could alleviate bed capacity issues by taking patients from the inpatient acute care hospitals without being penalized by lower teaching status adjustments, we established an interim final policy to freeze the IRFs' or IPFs' teaching status adjustment payments at their values prior to the COVID-19 PHE. Therefore, we stated that for the duration of the COVID-19 PHE, an IRF's or an IPF's teaching status adjustment payment amount would be the same as it was on the day before the COVID-19 PHE was declared.
In response to the request that we implement the policy in a manner that achieves the intent without potentially subjecting IRFs and IPFs to unintended consequences, we note that our intent was to hold IRFs and IPFs harmless and not to limit their teaching adjustments to the level prior to the PHE. IPF and IRF teaching status adjustments are made on a claim basis as an interim payment, and the final payment in full for the claim is made during the final settlement of the cost report. In accordance with this hold harmless policy, we intend to clarify in the cost reporting instructions that for cost reporting periods ending on or after March 1, 2020 and beginning before the end of the COVID-19 Public Health Emergency, if an IRF's or IPF's calculated teaching adjustment factor is below the teaching adjustment factor that was applicable on February 29, 2020, then the IRF's or IPF's teaching adjustment factor is equal to the teaching adjustment factor that was applicable on February 29, 2020.
Lastly, regarding the suggestion that we allow IPFs and IRFs that send residents to work in another hospital to claim such resident FTE time spent at another hospital, we note that we did not include this as part of our interim final policy for IRF and IPF teaching adjustments, and we are not finalizing such a policy in this final rule with comment period.
After consideration of the public comments we received, we are confirming as final this interim final policy to hold IRF and IPF teaching status adjustments harmless for the duration of the COVID-19 PHE. Therefore, we are finalizing that for the duration of the COVID-19 PHE, an IRF's or an IPF's teaching status adjustment payment amount will not be less than it was on the day before the COVID-19 PHE was declared.
In the May 8, 2020 IFC (85 FR 27568 through 27569), we implemented several policies on an interim final basis related to time spent by residents at another hospital during the COVID-19 PHE. We refer readers to the May 8, 2020 IFC, for an overview of GME (85 FR 27568).
We received public comments on policies that we adopted on an interim basis in the IFC provisions related to time spent by residents at another hospital during the COVID-19 PHE (85 FR 27568 through 27569). The following is a summary of the comments we received and our responses.
In this final rule with comment period, we are finalizing the provisions of the May 8, 2020 IFC without modification, allowing teaching hospitals during the COVID-19 PHE to claim for purposes of IME and DGME payments the time spent by residents training at other hospitals during the COVID-19 PHE. It is important to note that when the COVID-19 PHE ends, the presence of residents in non-teaching hospitals will trigger establishment of IME and/or DGME FTE resident caps at those non-teaching hospitals (and for DGME will trigger establishment of per resident amounts (PRAs) at those non-teaching hospitals).
As a condition of payment for IRF services, § 412.622(a)(3)(ii) generally requires that a beneficiary requires and can be reasonably expected to actively participate in, and benefit from, an intensive rehabilitation therapy program on admission to the IRF. Under current industry standards, this intensive rehabilitation therapy program generally consists of at least 3 hours of therapy (physical therapy, occupational therapy, speech-language pathology, or prosthetics/orthotics therapy) per day at least 5 days per week. In certain well-documented cases, this intensive rehabilitation therapy program might instead consist of at least 15 hours of intensive rehabilitation therapy within a 7-consecutive day period, beginning with the date of admission to the IRF. Benefit from this intensive rehabilitation therapy program is demonstrated by measurable improvement that will be of practical value to the patient in improving the patient's functional capacity or adaptation to impairments. The required therapy treatments must begin within 36 hours from midnight of the day of admission to the IRF.
On March 27, 2020, the CARES Act was enacted. Section 3711(a) of the CARES Act requires the Secretary to waive § 412.622(a)(3)(ii) during the emergency period described in section 1135(g)(1)(B) of the Act (the COVID-19 PHE). This waiver was issued on April 15, 2020. The waiver required by section 3711(a) of the CARES Act was not limited to particular IRFs or patients, and therefore, is available during the emergency period described in section 1135(g)(1)(B) of the Act regardless of whether a patient was admitted for standard IRF care or to relieve acute care hospital capacity. In the May 8, 2020 IFC (85 FR 27572), we therefore waived § 412.622(a)(3)(ii) for all patients during the COVID-19 PHE to reflect the waiver required by section 3711(a) of the CARES Act.
We received several comments on the CARES Act waiver of the “3-hour rule,” which are addressed below.
After carefully considering the comments we received, and for the reasons discussed, we are finalizing the waiver of the requirements in § 412.622(a)(3)(ii) during the COVID-19 PHE, as authorized by section 3711(a) of the CARES Act. We will terminate this waiver for all IRF admissions occurring after the end of the COVID-19 PHE, so that patients who are admitted to IRFs during the PHE will be able to remain under the waiver until they are discharged from the IRFs.
IRF care is only considered by Medicare to be reasonable and necessary under section 1862(a)(1) of the Act if the patient meets all of the IRF coverage requirements outlined in § 412.622(a)(3), (4), and (5). These requirements include requiring 2 or more types of therapy, being sufficiently stable to tolerate an intensive rehabilitation therapy program typically provided in IRFs, needing close medical supervision by a rehabilitation physician, and requiring an interdisciplinary approach to care. Failure to meet the IRF coverage criteria in a particular case results in denial of the IRF claim.
We note that the April 6, 2020 IFC removed the requirement at § 412.622(a)(4)(ii) to complete a postadmission physician evaluation during the COVID-19 PHE, as defined in § 400.200. In follow up to this temporary removal of the waiver, the FY 2021 IRF PPS final rule (85 FR 48445 through 48446) removed this requirement permanently, effective for all IRF discharges beginning on or after October 1, 2020.
While we generally believe that all IRFs should have to comply with the requirements at §§ 412.29(d), (e), (h), and (i) and 412.622(a)(3), (4), and (5), we recognize that there are certain institutional differences between freestanding IRF hospitals and IRF distinct part units of hospitals that may impose barriers on freestanding IRF hospitals seeking to admit patients to relieve acute care hospital capacity during the COVID-19 PHE. Specifically, freestanding IRF hospitals do not have the same close affiliations with acute care hospitals that IRF distinct part units of hospitals have, and are not as able to establish billing procedures under the IPPS that IRF distinct part units have established, by virtue of the fact that the distinct part units have access to (or at least affiliations with) their parent hospitals' billing departments. Therefore, in the May 8, 2020 IFC, we amended the requirements at §§ 412.29(d), (e), (h), and (i) and 412.622(a)(3), (4), and (5) to add an exception for care furnished to patients admitted to freestanding IRF hospitals (identified as those facilities with the last 4 digits of their Medicare provider numbers between 3025 through 3099) solely to relieve acute care hospital capacity during the COVID-19 PHE.
We believe that freestanding IRF hospitals have needed the flexibility during the COVID-19 PHE to determine the best care for each patient who is admitted solely to relieve acute care hospital capacity. For the purposes of exercising these IRF flexibilities that are intended to provide broad flexibility for freestanding IRF hospitals to provide surge capacity in support of acute care hospitals in their state or community, CMS considers surge to be alleviated with regard to exercising these flexibilities when the state (or region, as applicable) in which the freestanding IRF is located has moved beyond phase 1 of reopening. Thus, these flexibilities are no longer available to the freestanding IRF hospital when the state is in phase 2 or phase 3 of reopening. In the Guidelines for Opening Up America Again, Phase 1 of reopening is defined specifically as a state (or region, as applicable) that satisfies all of the following, as determined by applicable state and local officials:
• All vulnerable individuals continue to shelter in place.
• Individuals continue social distancing.
• Individuals avoid socializing in groups of more than 10.
• Non-essential travel is minimized.
• Visits to senior living facilities and hospitals are prohibited.
• Schools and organized youth activities remain closed.
These flexibilities apply to specific patients who must be discharged from the acute care hospitals to the freestanding IRFs to provide surge capacity for the acute care hospitals, and therefore apply only when those specific patients are admitted to the freestanding IRF hospitals and continue for the duration of that patient's care. We believe this allows for continuity of care and care planning consistency at admission and throughout a patient's stay if the same flexibilities apply for the duration of a patient's IRF stay. These limitations only apply to the provisions stated in the IFC and not to any blanket waivers issued, which have their own conditions. Freestanding IRF hospitals must document the particular phase for the state when admitting the patient and electing to exercise these flexibilities.
For billing purposes, we have required freestanding IRF hospitals to append the “DS” modifier to the end of the IRF's unique patient identifier number (used to identify the patient's medical record in the IRF) to identify patients who are being treated in a freestanding IRF hospital solely to alleviate inpatient bed capacity in a state that is experiencing a surge during the PHE for the COVID-19 pandemic. The modifier has also been used to identify those patients for whom the requirements in § 412.622(a)(3)(i), (iii), and (iv) and (a)(4) and (5) do not apply. Freestanding IRF hospitals are paid at the IRF PPS rates for patients with the “DS” modifier.
We have expected freestanding IRF hospitals to take advantage of these flexibilities for those beneficiaries who are surge patients from inpatient hospitals, while continuing to provide standard IRF-level care for those beneficiaries who would benefit from IRF-level care and would otherwise receive such care in the absence of the COVID-19 PHE. This has provided crucial flexibility to allow freestanding IRF hospitals to aid in the response to the COVID-19 pandemic in several ways. First, some of the patients that freestanding IRF hospitals have cared for during the COVID-19 PHE in states experiencing a surge would need high-acuity clinical care but may not need or be able to tolerate the intensive rehabilitation therapy typically provided in an IRF, such as at least two types of therapy. Second, waiving the documentation requirements in § 412.622(a)(4) and (5) for patients alleviating inpatient hospital bed capacity has allowed freestanding IRF hospitals to concentrate on providing care for surge patients from the acute care hospitals in a state that is experiencing a surge, instead of completing documentation that may not be applicable to these acute patients during the PHE. Third, this flexibility has allowed freestanding IRF hospitals to maximize their available beds to take advantage of space where COVID-19 patients or surge patients could be safely managed. We believe this policy has allowed freestanding IRF hospitals to make a clinical determination about what level of care each individual patient needs during the PHE for the COVID-19 pandemic.
We received several comments on the modification of IRF coverage and classification requirements for freestanding IRF hospitals for the PHE during the COVID-19 pandemic, which are addressed below.
After carefully considering the comments we received, and for the reasons discussed, we are finalizing without modification the waiver of the requirements at §§ 412.29(d), (e), (h), and (i) and 412.622(a)(3), (4), and (5) during the COVID-19 PHE for freestanding IRF hospitals admitting patients in support of acute care hospitals when the state (or region, as applicable) is in phase 1 or prior to entering phase 1 of reopening described in the May 8, 2020 IFC. Patients who are admitted to IRFs during the PHE will remain under these waivers until they are discharged from the IRFs. However, these waivers will no longer apply to patients who are admitted to IRFs after the end of COVID-19 PHE.
To effectuate these changes, we are finalizing without modification the revisions to §§ 412.29(d), (e), (h), and (i) and 412.622(a)(3), (4), and (5) described in the May 8, 2020 IFC. Specifically, in § 412.622(a)(3)(i), (ii), (iii), and (iv) we are finalizing language providing that these IRF coverage criteria continue to be required, except for care furnished to patients in a freestanding IRF hospital solely to relieve acute care hospital capacity in a state (or region, as applicable) that is experiencing a surge during the PHE, as defined in § 400.200. Similarly, in § 412.622(a)(4), we are finalizing this paragraph to state that the IRF documentation requirements must be present in the IRF medical record, except for care furnished to patients in a freestanding IRF hospital solely to relieve acute care hospital capacity in a state (or region, as applicable) that is experiencing a surge during the PHE, as defined in § 400.200. In § 412.622(a)(5), we are finalizing this paragraph to state that an interdisciplinary team approach to care is required, except for care furnished to patients in a freestanding IRF hospital solely to relieve acute care hospital capacity in a state (or region, as applicable) that is experiencing a surge during the PHE, as defined in § 400.200. We are also finalizing the revisions to § 412.29(d), (e), (h), and (i) to align the provisions we have waived in § 412.622 with the classification criteria for payment to freestanding IRF hospitals under the IRF prospective payment system. Finally, we are finalizing the revisions to § 412.622(c) to add a definition of state (or region, as applicable) that are experiencing a surge and § 412.29 to cross-reference that definition where applicable.
A 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 and schizophrenia. 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 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.
In the May 8, 2020 IFC (85 FR 27563 through 27566), we stated that infection control was a primary goal of CMS initiatives undertaken during the COVID-19 PHE. We also stated that we believe continuity of behavioral health services is critical for those participating in a PHP, particularly at a time of heightened anxiety and uncertainty. As we noted in the May 8, 2020 interim final rule (85 FR 27562), we issued numerous blanket waivers under section 1135 of the Act, including for hospitals and CMHCs providing PHP services, to give health care providers needed flexibility to address the COVID-19 PHE and support the goal of infection control while maintaining access to partial hospitalization services and ensuring continuity of care for patients. Effective as of March 1, 2020, and for the duration of the COVID-19 PHE, we established an interim final policy that a temporary expansion location where the beneficiary may be located, including a beneficiary's home, may be a provider-based department (PBD) of the hospital, or may be a temporary extension of the CMHC (discussed in more detail below).
Consistent with the goals of infection control and maintaining access, for the duration of the COVID-19 PHE only, we established that providers could furnish certain partial hospitalization services remotely to patients in a temporary
We further explained that although these services can be furnished remotely, all other PHP requirements were unchanged and still in effect, including that all services furnished under the PHP still required an order by a physician, had to be supervised and certified by a physician, and had to be furnished in accordance with coding requirements by a clinical staff member working within his or her scope of practice. We 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 would continue to be required. We further explained that when these services are provided by clinical staff of the physician or other practitioner and furnished incident to their professional services, and are not provided by staff of the hospital or CMHC, the hospital or CMHC would not bill for the services. The physician or other practitioner would bill for such services incident to their own services and would be paid under the PFS.
As detailed in the May 8, 2020 IFC (85 FR 27564), as part of the initiative to promote infection control and maintain access to PHP services, we waived the requirements for being a PBD of the hospital in § 413.65, as well as certain requirements under the Medicare conditions of participation in §§ 482.41 and 485.623, to facilitate the availability of temporary expansion locations. As we noted in that IFC, for purposes of the COVID-19 PHE and effective as of March 1, 2020, a temporary expansion location where the beneficiary may be located, including a beneficiary's home, may be a PBD of the hospital where the location meets the non-waived conditions of participation. We stated that together, these waivers allow hospitals to consider a temporary expansion location where the beneficiary may be located, including their homes, an HOPD only in the context of the COVID-19 PHE. Thus, we explained that for the duration of the COVID-19 PHE, we would consider the PHP services furnished by hospital clinical staff, when the beneficiary was registered as an outpatient of the hospital and in accordance with the supervising practitioner's scope of practice, to have been furnished in the hospital to the beneficiary in a temporary expansion location, including a beneficiary's home, so long as such temporary expansion location was made provider-based to the hospital. We noted that the hospital was instructed to bill for these services as if they were furnished in the hospital and consistent with any specific requirements for billing Medicare during the COVID-19 PHE.
A CMHC is a provider of PHP services defined under section 1861(ff)(3)(B) of the Act. As we discussed in the May 8, 2020 IFC (85 FR 27564), for the duration of the COVID-19 PHE, we waived the restriction at § 485.918(b)(1)(iii) for the purpose of providing PHP services to CMHC patients in their homes, which we stated would be considered a temporary expansion location of a CMHC. Certain therapeutic services by CMHC staff would be paid when provided for beneficiaries registered as outpatients, in accordance with the supervising practitioner's scope of practice, consistent with any specific requirements for billing Medicare during the COVID-19 PHE.
One national insurance company voiced support for the flexibilities, stating that these flexibilities were necessary to ensure that PHP beneficiaries continue to have access to the level of care they required and prevent potential relapse and overdose. This commenter noted that structured patient engagement is an important component of PHP and they believe the remote and audio-only flexibilities did not diminish this important component. They further noted that for PHP patients and providers, these flexibilities also reduced the risk of contracting or spreading the coronavirus. This commenter also expressed concern about clerical staff lacking the qualifications to provide the services described, and requested further language to clarify the scope of this allowance. Another national insurance company expressed support for the use of live-two-way video interactions via remote technology for PHP services,
Regarding the concern about clerical staff lacking the qualifications to provide the services described, we note that we explained in the May 8, 2020 IFC 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 (85 FR 27564).
Lastly, regarding the commenter's suggestion of a transition policy, as we explained in the May 8, 2020 IFC, this interim final policy depends on numerous blanket waivers under section 1135 of the Act, and will apply for the duration of the COVID-19 PHE. After those blanket waivers expire at the end of the COVID-19 PHE, section 1861(ff)(3)(A) of the Act limits Medicare's ability to pay for partial hospitalization services furnished to beneficiaries in a home or residential setting.
After consideration of the public comments we received, we are confirming as final this interim final policy. Therefore, for the duration of the COVID-19 PHE only, providers can furnish certain partial hospitalization services remotely to patients in a temporary expansion location of the hospital or CMHC, which may include the patient's home to the extent it is made provider-based to the hospital or an extension of the CMHC.
As we explained in the May 8, 2020 IFC (85 FR 27562 through 27566), outpatient 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 temporary expansion locations, including beneficiaries' homes, to become provider-based departments (PBDs) of the hospital during the COVID-19 PHE and therapeutic outpatient hospital services furnished to beneficiaries in these provider-based locations can meet the requirement that these services be furnished in the hospital so long as all other requirements are met, including the hospital conditions of participation, to the extent not waived, during the COVID-19 PHE. . In light of the need for infection control and a desire for continuity of care, 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 8, 2020 IFC (85 FR 27564), we made clear that when a hospital's clinical staff are furnishing hospital outpatient services (such as drug administration, 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 § 410.27(a)(1) to be met. We referred to this policy as Hospitals without Walls (HWW). Further, we clarified 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. Finally, we also clarified the applicability of section 603 of the BBA 2015 to hospitals furnishing care in the beneficiaries' homes (or other temporary expansion locations), and whether those locations are considered relocated, partially relocated, or new PBDs.
We reminded readers that the physician supervision level for the vast majority of hospital outpatient therapeutic services is currently general supervision under § 410.27. This means a service must be furnished under the physician's overall direction and control, but the physician's presence is not required during the performance of the service.
In section X.A.1 of this final rule with comment period we are finalizing the IFC policy with respect to mental health services furnished remotely to beneficiaries in their homes, through an alternate regulatory authority that does not rely upon the HWW framework.
In this final rule, we are finalizing the provisions of the May 8, 2020 IFC (85 FR 27562 through 27566), without
In the May 8, 2020 IFC (85 FR 27567 through 27568), we implemented a policy on an interim final basis related to treatment of new and certain relocating provider-based departments (PBDs) during the PHE. We refer readers to the May 8, 2020 IFC for an overview of that policy (85 FR 27567).
In this final rule with comment period, we are finalizing the provisions of the May 8, 2020 IFC (85 FR 27567
In this final rule with comment period we are also responding to public comments and stating our final policy for a provision titled “Additional Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” (CMS-9912-IFC), which appeared in the November 6, 2020
Under the OPPS Comprehensive APC (C-APC) policy, when a service that we have designated as a primary C-APC service is reported on a hospital outpatient claim, with certain exceptions, we make payment for all other items and services reported on the claim as being integral, ancillary, supportive, dependent, and adjunctive to the primary service and representing components of a complete comprehensive service. 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. Under our current policy, payment for drugs or biological products with emergency authorization or approved to treat COVID-19 in the outpatient setting would be packaged into the payment for a primary service when billed on the claim for that service.
In the November 9, 2020 IFC, we stated that although many beneficiaries would likely not receive both a primary C-APC service and a drug or biological for treating COVID-19, we nonetheless believed that, as drugs or biologicals became available and were authorized or approved for the treatment of COVID-19 in the outpatient setting, it would be appropriate to mitigate any potential financial disincentives for hospitals to provide these new treatments during the PHE for COVID-19. Accordingly, effective for services furnished on or after the effective date of the November 9, 2020 IFC and until the end of the PHE for COVID-19, we created an exception to our OPPS C-APC policy to ensure new COVID-19 treatments that meet two criteria would, for the remainder of the PHE for COVID-19, always be separately paid and not packaged into a C-APC when they appear on the same claim as the primary C-APC service.
The first criterion is that 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 letter of authorization for the drug or biological product, or the drug or biological product must be approved by the FDA for treating COVID-19. The second criterion is that the EUA for the drug or biological product (which could include a blood product) must authorize the use of the product in the outpatient setting or not limit its use to the inpatient setting, or the product must be approved by the FDA to treat COVID-19 disease and not limit its use to the inpatient setting. We refer readers to the November 6, 2020 IFC for a full overview of this policy (85 FR 71158 through 71160).
Given the public comments we received, we are finalizing this policy as implemented in the November 6, 2020 IFC. Accordingly, this policy will end with the end of the PHE.
The Addenda to the OPPS/ASC proposed rules and final rules with comment period are published and available via the internet on the CMS website. In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59154), for CY 2019, we changed the format of the OPPS Addenda A, B, and C by adding a column titled “Copayment Capped at the Inpatient Deductible of $1,364.00” where we flag, through use of an asterisk, those items and services with a copayment that is equal to or greater than the inpatient hospital deductible amount for any given year (the copayment amount for a procedure performed in a year cannot exceed the amount of the inpatient hospital deductible established under section 1813(b) of the Act for that year). For CY 2023, we proposed to retain these columns, updated to reflect the amount of the 2023 inpatient deductible. In the CY 2022 OPPS/ASC final rule with comment period (85 FR 86266), we updated the format of the OPPS Addenda A, B, and C by adding
In addition, for CY 2023, we proposed to update the column titled “Drug Pass-Through Expiration during Calendar Year” to include devices, so that the column reads: “Drug and Device Pass-Through Expiration during Calendar Year” where we proposed to flag, through the use of an asterisk, each drug and device for which pass-through payment would be expiring during the calendar year on a date other than December 31. For CY 2023, we did not receive any public comments and, therefore, are finalizing our proposal to update the column to include devices, so that the column reads: “Drug and Device Pass-Through Expiration during Calendar Year” where we would flag, through the use of an asterisk, each drug and device for which pass-through payment would be expiring during the calendar year on a date other than December 31.
To view the Addenda to the CY 2023 OPPS/ASC proposed rule pertaining to proposed CY 2023 payments under the OPPS, we refer readers to the CMS website at:
Under the Paperwork Reduction Act of 1995 (PRA), we are required to provide 60-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
We solicited public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs):
The Hospital Outpatient Quality Reporting (OQR) Program is generally aligned with the CMS quality reporting program for hospital inpatient services known as the Hospital Inpatient Quality Reporting (IQR) Program. We refer readers to the CY 2011 through CY 2022 OPPS/ASC final rules (75 FR 72111 through 72114; 76 FR 74549 through 74554; 77 FR 68527 through 68532; 78 FR 75170 through 75172; 79 FR 67012 through 67015; 80 FR 70580 through 70582; 81 FR 79862 through 79863; 82 FR 59476 through 59479; 83 FR 59155 through 59156; 84 FR 61468 through 61469; 85 FR 86266 through 86267; and 86 FR 63961 through 63968, respectively) for detailed discussions of the previously finalized Hospital OQR Program ICRs. The ICRs associated with the Hospital OQR Program are currently approved under OMB control number 0938-1109, which expires on February 28, 2025.
In the CY 2022 OPPS/ASC final rule with comment period, our burden estimates were based on an assumption of 3,300 hospitals (86 FR 63961). For the CY 2023 OPPS/ASC final rule, we have updated our assumption to 3,350 hospitals based on recent data from the CY 2022 payment determination which reflects a closer approximation of the total number of hospitals reporting data for the Hospital OQR Program.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 52617), we finalized to utilize the median hourly wage rate for Medical Records and Health Information Technicians, in accordance with the Bureau of Labor Statistics (BLS), to calculate our burden estimates for the Hospital OQR Program. In BLS' most recent set of National Occupational Employment and Wage Estimates published on March 31, 2022, this occupation title has been removed. As a result, we now utilize the “Medical Records Specialists” occupation title. The BLS describes Medical Records Specialists as those responsible for compiling, processing, and maintaining medical records of hospital and clinic patients in a manner consistent with medical, administrative, ethical, legal, and regulatory requirements of the healthcare system and classifying medical and healthcare concepts, including diagnosis, procedures, medical services, and equipment, into the healthcare industry's numerical coding system;
In section XIV.B.4 of this final rule with comment period, we are finalizing to: (1) change the Cataracts: Improvement in Patient's Visual Function within 90 days Following
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63845 through 63846), we finalized to require this measure with mandatory reporting beginning with the CY 2025 reporting period/CY 2027 payment determination. We previously finalized voluntary reporting of this measure in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66947 through 66948) and estimated that 20 percent of hospitals would elect to report it annually (79 FR 67014). As discussed in section XIV.B.5.b of this final rule with comment period, we are finalizing to change this measure to voluntary beginning with the CY 2025 reporting period/CY 2027 payment determination. We continue to estimate it will require hospitals 10 minutes once annually to report this measure using a CMS web-based tool. As a result, we estimate only 20 percent of hospitals will voluntarily submit data, which results in a total annual burden estimate of 112 hours (3,350 hospitals × 20 percent × 0.1667 hours) at a cost of $5,188 (112 hours × $46.46/hour). In addition to reporting the measure, for hospitals that chose to voluntarily submit, we also require hospitals to perform chart abstraction and estimate that each hospital will spend 2.92 minutes (0.049 hours) per case per measure to perform this activity. In the CY 2022 OPPS/ASC final rule with comment period, we used an estimate of 25 minutes per case per measure (86 FR 63963). Upon review, this estimate was erroneous, therefore we are correcting our assumption to 2.92 minutes (0.049 hours) per case per measure as finalized in the CY 2016 OPPS/ASC final rule (80 FR 70582). The currently approved burden estimate assumes 242 cases per measure. For chart abstraction, we estimate an annual burden of 12 hours (0.049 hours × 242 cases) at a cost of $549 (12 hours × $46.46/hour) per hospital and a total annual burden of 7,891 hours (3,350 hospitals × 20 percent × 12 hours) at a cost of $368,028 (7,891 hours × $46.46/hour) for all participating hospitals. In aggregate, we estimate a total annual burden of 8,003 hours (112 hours + 7,891 hours) at a cost of $373,216 ($5,188 + $368,028) for all hospitals. This is a decrease of 325,847 hours and $15,138,852 per year from the currently approved estimate due to the 80 percent of hospitals we assume will no longer report this measure, the updated assumption of the number of hospitals participating in the Hospital OQR Program, the updated burden estimate for chart abstraction, and the updated wage rate.
The information collection requirement and the associated burden will be submitted as part of a revision of the information collection request currently approved under OMB control number 0938-1109, which expires on February 28, 2025.
In section XIV.B.4 of this final rule with comment period, we are finalizing to adopt an additional targeting criterion to the validation selection policy beginning with the CY 2023 reporting period/CY 2025 payment determination. We also are finalizing to codify this targeting criterion at § 419.46(f)(3). We do not believe this policy will increase reporting burden, because it changes neither the total number of hospitals required to submit data nor the amount of data hospitals selected for validation would be required to submit.
In section XIV.B.4.b of this final rule with comment period, we are finalizing to align patient encounter quarters with the calendar year (January through December), beginning with the CY 2026 payment determination and subsequent years. This finalized period will not result in any increase in information collection burden because it will not change the amount of data hospitals will be required to submit.
In summary, under OMB control number 0938-1109 which expires on February 28, 2025 we estimate that the updated assumptions and policies promulgated in this final rule with comment period will result in a decrease of 325,847 hours annually for 3,350 OPPS hospitals for the CY 2025 reporting period/CY 2027 payment determination and subsequent years. The total cost decrease related to this information collection is approximately -$15,138,852 (325,847 hours × $46.46/hour) (which also reflects use of an updated hourly wage rate as previously discussed). Table 104 summarizes the estimated total burden change compared to our currently approved information collection burden estimates. We will submit the revised information collection estimates to OMB for approval under OMB control number 0938-1109. We did not finalize any changes for the CY 2024 reporting period/CY 2026 payment determination, therefore the previously finalized burden estimates for the CY 2024 reporting period/CY 2026 payment determination remain unchanged.
We refer readers to the CY 2012 OPPS/ASC final rule (76 FR 74554), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53672), and the CY 2013, CY 2014, CY 2015, CY 2016, CY 2017, CY 2018, CY 2019, CY 2020, CY 2021, and CY 2022 OPPS/ASC final rules (77 FR 68532 through 68533; 78 FR 75172 through 75174; 79 FR 67015 through 67016; 80 FR 70582 through 70584; 81 FR 79863 through 79865; 82 FR 59479 through 59481; 83 FR 59156 through 59157; 84 FR 61469; 85 FR 86267; and 86 FR 63968 through 63971, respectively) for detailed discussions of the Ambulatory Surgical Center Quality Reporting (ASCQR) Program ICRs we have previously finalized. The ICRs associated with the ASCQR Program for the CY 2014 through CY 2023 payment determinations are currently approved under OMB control number 0938-1270, which expires on July 31, 2024.
In the CY 2018 OPPS/ASC final rule with comment period (82 FR 52619 through 52620), we finalized to utilize the median hourly wage rate for Medical Records and Health Information Technicians, in accordance with the BLS, to calculate our burden estimates for the ASCQR Program. In BLS' most recent set of National Occupational Employment and Wage Estimates published on March 31, 2022, this occupation title has been removed. As a result, we now utilize the “Medical Records Specialists” occupation title. The BLS describes Medical Records Specialists as those responsible for compiling, processing, and maintaining medical records of hospital and clinic patients in a manner consistent with medical, administrative, ethical, legal, and regulatory requirements of the healthcare system and classifying medical and healthcare concepts, including diagnosis, procedures, medical services, and equipment, into the healthcare industry's numerical coding system;
Based on an analysis of the CY 2020 payment determination data, we found that of the 6,651 ASCs that met eligibility requirements for the ASCQR Program, 3,494 were required to participate in the Program and did so. In addition, 689 ASCs that were not required to participate due to having low Medicare claims volume (less than 240), did so, for a total of 4,183 participating facilities. As noted in section XXV.C.5.a of the “Regulatory Impact Analysis”, for the CY 2021 payment determination, all 6,811 ASCs that met eligibility requirements for the ASCQR Program received the annual payment update due to data submission requirements being excepted under the ASCQR Program's ECE policy in consideration of the COVID-19 PHE; 3,957 of these ASCs would have been required to participate without the PHE exception. Therefore, we estimate that 3,957 plus 689, or 4,646, ASCs will submit data for the ASCQR Program for the CY 2023 payment determination unless otherwise noted.
In section XV.B.4 of this final rule with comment period, we are finalizing to change the Cataracts: Improvement in Patient's Visual Function within 90 days Following Cataract Surgery measure (ASC-11) to voluntary beginning with the CY 2025 reporting period/CY 2027 payment determination.
In the CY 2022 OPPS/ASC final rule with comment period (86 FR 63886 through 63887), we finalized to require this measure with mandatory reporting beginning with the CY 2025 reporting period/CY 2027 payment determination. We previously finalized voluntary reporting of this measure in the CY 2015 OPPS/ASC final rule with comment period (79 FR 66985) and estimated that 20 percent of ASCs would elect to report it annually (79 FR 67016). As discussed in section XV.B.5.b of this final rule with comment period, we are finalizing to change the ASC-11 measure to voluntary beginning with the CY 2025 reporting period/CY 2027 payment determination. We continue to estimate it will require ASCs 10 minutes once annually to report this measure using a CMS web-based tool. As a result of our finalized policy, we estimate only 20 percent of ASCs will voluntarily submit data, which results in a total annual burden estimate for all participating ASCs of 155 hours (4,646 ASCs × 20 percent × 0.1667 hours) at a cost of $7,194 (115 hours × $46.46/hour). In addition to reporting the measure, for ASCs that chose to voluntarily submit, we also require ASCs to perform chart abstraction for a minimum required sample size of 63 cases. In the CY 2022 OPPS/ASC final rule with comment period, we estimated that each ASC would spend 15 minutes (0.25 hours) per case to perform this activity (86 FR 63969). However, upon review, we believe the effort involved with this activity is similar to what is required for the OP-31 measure in the Hospital OQR Program, therefore, we are updating our assumption to 2.92 minutes (0.049 hours) per case per measure. Therefore, we estimate an annual burden of 3.1 hours (0.049 hours × 63 cases) at a cost of $142 (3.1 hours × $46.46/hour) per ASC and a total annual burden of 2,848 hours (4,646 ASCs × 20 percent × 3.1 hours) at a cost of $132,333 (2,848 hours × $46.46/hour) for all participating ASCs. In aggregate, we estimate a total annual burden of 3,003 hours (155 hours + 2,848 hours) at a cost of $139,527 ($7,194 + $132,333) for all ASCs. This is a decrease of 72,107 hours and $3,350,091 per year from the currently approved estimate due to the 80 percent of ASCs we assume will no longer report this measure, the updated burden estimate per case per measure, and the updated wage rate.
In summary, under OMB control number 0938-1270 which expires on July 31, 2024, we estimate that the policies promulgated in this final rule with comment period will result in a decrease of 72,107 hours annually for 4,646 ASCs for the CY 2025 reporting period/CY 2027 payment determination and subsequent years. The total cost decrease related to this information collection is approximately $3,350,091 (72,107 hours × $46.46/hour). Table 105 summarizes the total burden change compared to our currently approved information collection burden estimates. We will submit the revised information collection estimates to OMB for approval under OMB control number 0938-1270.
As discussed in section XVIII.E of this final rule with comment period, we are finalizing our proposal to revise certain existing exceptions applicable to compensation arrangements involving specific types of providers to make them applicable to compensation arrangements to which an REH is a party. Specifically, we are finalizing our proposal to revise the exceptions for physician recruitment at § 411.357(e), obstetrical malpractice insurance subsidies at § 411.357(r), retention payments in underserved areas at § 411.357(t), electronic prescribing items and services at § 411.357(v), assistance to compensate a nonphysician practitioner at § 411.357(x), and timeshare arrangements at § 411.357(y) to also permit an REH to provide remuneration to a physician (or an immediate family member of a physician) if all requirements of the applicable exception are satisfied. All of the finalized proposals will ensure that exceptions that may already be utilized by existing hospitals eligible to undergo conversion to an REH remain available to REHs.
The existing exceptions at § 411.357(e), (r), (t), (v), (x), and (y) each require that the compensation arrangements to which the exceptions apply be documented in a writing signed by the parties. The existing exception at § 411.357(t)(2) also requires a written certification that the physician has a bona fide opportunity for future employment by a hospital, academic medical center, or physician organization that requires the physician to move the location of his or her medical practice at least 25 miles and outside the geographic area served by the hospital. The existing exception at § 411.357(x) also requires that records of the actual amount of remuneration provided by the hospital to the physician, and by the physician to the nonphysician practitioner, must be maintained for a period of at least 6 years. We did not propose, and are not finalizing, any changes to the existing writing, signature, or record retention requirements. The burden associated with writing and signature requirements will be the time and effort necessary to prepare written documents and obtain signatures of the parties. The burden associated with record retention requirements is the time and effort necessary to compile and store the records.
As noted in the CY 2023 OPPS/ASC proposed rule, while the writing, signature, and record retention requirements are subject to the PRA, we believe the associated burden is exempt under 5 CFR 1320.3(b)(2). We believe that the time, effort, and financial resources necessary to comply with these requirements would be incurred by persons without Federal regulation during the normal course of their activities. Specifically, we believe that, for normal business operations purposes, health care providers and suppliers document their financial arrangements with physicians and others and retain these documents in order to identify and be able to enforce the legal obligations of the parties. Therefore, we believe that the writing, signature, and record retention requirements should be considered usual and customary business practices.
We did not receive any public comments regarding our position that the burden associated with these requirements is a usual and customary business practice that is exempt from the PRA.
In the CY 2020 OPPS/ASC final rule with comment period, we established a prior authorization process for certain hospital OPD services using our authority under section 1833(t)(2)(F) of the Act, which allows the Secretary to develop a method for controlling unnecessary increases in the volume of covered OPD services (84 FR 61142, 61446 through 61456).
In accordance with § 419.83(b), we are finalizing our proposal to require prior authorization for a new service category: Facet joint interventions. We are adding the service category to § 419.83(a)(3). We also are finalizing that the prior authorization process for the additional service category will be effective for dates of services on or after July 1, 2023. The ICR associated with prior authorization requests for these covered outpatient department services is the required documentation submitted by providers. The prior authorization request must include all relevant documentation necessary to show that the service meets applicable Medicare coverage, coding, and payment rules and the request must be submitted before the service is provided to the beneficiary and before the claim is submitted for processing.
The burden associated with the prior authorization process for the new category, Facet joint interventions, will be the time and effort necessary for the submitter to locate and obtain the relevant supporting documentation to show that the service meets applicable coverage, coding, and payment rules, and to forward the information to CMS or its contractor (MAC) for review and determination of a provisional affirmation. We expect that this information will generally be maintained by providers within the normal course of business and that this information will be readily available. We estimate that the average time for office clerical activities associated with this task will be 30 minutes, which is equivalent to that for normal prepayment or post payment medical review. We anticipate that most prior authorization requests will be sent by means other than mail. However, we estimate a cost of $5 per request for mailing medical records. Due to July 1, 2023 start date, the first year of the prior authorization for the new service category will only include 6 months. Based on CY 2019 data, we estimate that for those first 6 months there will be 41,701initial requests mailed during the year. In addition, we estimate there will be 13,683 resubmissions of a request mailed following a non-affirmed decision. Therefore, the total mailing cost is estimated to be $276,920 (55,384 mailed requests × $5). Based on CY 2019 data for the new service category, we estimate that annually there will be 83,401 initial requests mailed during a year. In addition, we estimate there will be 27,366 resubmissions of a request mailed following a non-affirmed decision. Therefore, the total annual mailing cost is estimated to be $553,838 (110,786 mailed requests × $5). We also estimate that an additional 3 hours per provider will be required for attending educational meetings, training staff on what services require prior authorization, and reviewing training documents.
The average labor costs (including 100 percent fringe benefits) used to estimate the costs were calculated using data available from the Bureau of Labor Statistics (BLS). Based on the BLS information, we estimate an average clerical hourly rate of $17.13 with a loaded rate of $34.26. The prior authorization program for the new
Table 106 below is a chart reflecting the total burden and associated costs for the provisions included in this final rule with comment period.
In section X.H of this final rule with comment period, we are finalizing IPPS and OPPS payment adjustments for the additional resource costs of domestic NIOSH-approved surgical N95 respirators for cost reporting periods beginning on or after January 1, 2023. The payment adjustments will be based on the IPPS and OPPS shares of the estimated difference in the reasonable costs of a hospital to purchase domestic NIOSH-approved surgical N95 respirators compared to non-domestic ones. As discussed in section X.H of this final rule with comment period, in order to calculate the N95 payment adjustment for each eligible cost reporting period, we created a new cost report worksheet to collect additional information from hospitals.
Specifically, the new cost report worksheet will collect the following: (1) total quantity of domestic NIOSH-approved surgical N95 respirators purchased by hospital; (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; and (4) total aggregate cost of non-domestic NIOSH-approved surgical N95 respirators purchased by hospital.
This new information will be used along with other information already collected on the Hospitals and Health Care Complex Cost Report (Form CMS-2552-10) approved under OMB control number 0938-0050 to calculate an IPPS payment adjustment amount and an OPPS payment adjustment amount. This new cost report worksheet may be submitted by a provider of service as part of the annual filing of the cost report and make available to its contractor and CMS, documentation to substantiate the data included on this Medicare cost report worksheet. The documentation requirements are based on the recordkeeping requirements at current § 413.20, which require providers of services to maintain sufficient financial records and statistical data for proper determination of costs payable under Medicare.
The burden associated with filling out this new N95 cost report worksheet will 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 hospital for the period. We estimate the number of respondents to be 4,662. This number is comprised of 3,240 Medicare certified 1886(d) hospitals eligible for the payment adjustment under Part A and Part B (including 30 Indian Health Services Hospitals excluded from the Part B payment adjustment as they are paid an all-inclusive rate for Part B services) plus 1,422 additional hospitals paid for outpatient services under the hospital OPPS.
We estimate the associated labor costs as follows. The estimated 0.40 hours for recordkeeping includes time for bookkeeping activities. Based on the most recent Bureau of Labor Statistics (BLS) in its 2021 Occupation Outlook
As stated earlier in section XIX.C.1 of this final rule with comment period, we are finalizing our proposal at § 424.575, as well as existing § 424.510(a)(1) and (d)(1), which require REHs to complete and submit the applicable enrollment application, which, for REHs, will be the Form CMS-855A (OMB control number 0938-0685). The only impacts associated with our REH enrollment policies are those concerning the submission of a Form CMS-855A change of information application to convert from a CAH or hospital (as defined in section 1886(d)(1)(B) of the Act) to an REH. Per a North Carolina Rural Health Research Program
Form CMS-855A applications are typically completed by the provider's office or administrative staff. According to the most recent BLS wage data for May 2021, the mean hourly wage for the general category of “Office and Administrative Support Workers, All Other” (the most appropriate BLS category for owners) is $20.47 (see
The burden associated with this requirement will be included as part of a resubmission of the information collection previously approved under 0938-0685. In addition to the announcement in this rule, we will also be publishing the required 60-day and 30-day notices to formally announce the aforementioned resubmission request and to both inform the public on where to find the revised PRA package for review and where to submit comments.
Under this final rule with comment period, an REH's ICR may differ from that of a hospital or CAH, given that REHs would be providers of outpatient services and would not provide inpatient services. We based the ICRs for REHs on the ICRs for hospitals and CAHs in some cases because, in accordance with section 1861(kkk) of the Act, REHs must convert from either a rural hospital with not more than 50 beds or a CAH. In the discussion that follows, we rely heavily on the study of the North Carolina Rural Health Research Program's (NC RHRP's) study titled “How Many Hospitals Might Convert to a Rural Emergency Hospital (REH)?”
We note that another study from consulting firm CLA also examines the number of facilities likely to convert to REHs titled “A Path Forward: CLA's Simulations on Rural Emergency Hospital Designation.”
In total, the NC RHRP study estimated that there are 1,673 hospitals (mostly CAHs) eligible to convert to an REH and of these, 68 would convert to REH status. The reasons why some would convert are presented in the NC RHRP study and include low levels of inpatient revenue, low levels of swing bed nursing care revenue, and negative financial margins over a period of years.
The finances of individual rural hospitals and CAHs vary widely, as do the local economic and demographic circumstances of the communities served by these facilities (for example some rural areas are gaining population even as most face declining populations). Competition from other hospitals either in the rural area or in nearby cities also varies widely, with the only certainty in forecasting REH conversion is that seemingly similar hospitals and CAHs will make widely different decisions. What the NC RHRP did, in essence, was predict that the hospitals and CAHs facing the most severe financial difficulties would be the most likely to convert.
For purposes of our analysis, we use the NC RHRP estimate of 68 conversions though acknowledge that the number of conversions could be less than or significantly greater than this estimate. In addition, when considering the PRA burden for REHs, given that the CoPs align closely with existing standards, we considered both the existing burden estimates for CAHs and hospitals, as well as our ongoing experience with these provider types. We also considered that REHs would only be furnishing outpatient services, which would lessen their burden.
For the estimated costs contained in the analysis below, we used data from the U.S. Bureau of Labor Statistics (BLS) to determine the mean hourly wage for the positions used in this analysis.
Section 485.514(a) would require REHs to furnish health care services in accordance with appropriate written policies that are consistent with applicable state law. In addition, § 485.514(b) would require REHs to develop the policies with the advice of members of the REH's professional health care staff, while § 485.514(d) would require REHs to conduct a biennial review of all its policies and procedures. We have not designated any specific process or format for REHs to use in developing their policies or conducting a review of their policies because we believe they need the flexibility to determine how best to accomplish these tasks.
In accordance with the section 1861(kkk)(3) of the Act, REHs must have been either a CAH or a rural hospital with not more than 50 beds as of the date of enactment of the CAA, December 27, 2020, to convert to an REH. We estimate that 68 facilities will convert to an REH and we believe that they will be developing REH-specific policies that are based on policies that were utilized when the facility was a rural hospital or CAH. As a result, we estimate that it would take an REH approximately 80 hours for administrative and clinical staff to develop policies. If there are 68 REHs to comply with the policy development requirement and each REH uses 80 hours to comply: (16 hours for a physician + 16 hours for an administrator + 16 hours for a mid-level practitioner + 16 hours for a nurse + 16 hours for a clerical staff person), then the burden hours are 5,440 (68 REHs × 80 hours). The cost is $8,800 per REH ($3,360 for a physician (16 hours × $210) + $1,952 for an administrator (16 hours × $122) + $1,616 for a mid-level practitioner (16 hours × $101) + $1,264 for a nurse (16 hours × $79) + $608 for a clerical staff person (16 hours × $38)). The total cost is 598,400 (68 REHs × $8,800). We estimate that it would take an REH's professional personnel 16 hours to review and make changes to policies and procedures biennially. Therefore, for all 68 REHs to comply with the policy review requirement it would require an estimated 16 burden hours biennially, or 8 hours annually
Consistent with the recent changes we made to the hospital and CAH infection control CoPs related to COVID-19 and the declared public health emergency (PHE), we proposed to require REHs, after the conclusion of the current COVID-19 PHE, to report COVID-19 and seasonal influenza-related reporting. The requirements would apply upon conclusion of the COVID-19 PHE and would continue until April 30, 2024, unless the Secretary establishes an earlier ending date. The data elements align closely with those COVID-19 reporting requirements for long-term care (LTC) facilities that were finalized on November 9, 2021 (86 FR 62421) and are representative of the guidance provided to hospitals and CAHs for reporting. Therefore, we do not expect that these categories of data elements would require REHs to report any information beyond that which they have already been reporting as existing rural hospitals or CAHs. Furthermore, similar to the requirements for LTC facilities, this requirement would also allow for the scope and frequency of data collection to be reduced and limited responsive to the evolving clinical and epidemiological circumstances.
Based on our experience with those existing hospitals and CAHs and the current COVID-19 and related reporting requirements, we believe that this will primarily be the responsibility of a registered nurse and we have used this position in this analysis at an average hourly salary of $79. According to the most recent COVID-19 hospital reporting guidance (available at
If we were to assume a weekly reporting frequency, we would anticipate that there are reduced cases and fewer data elements (with no line level patient data) being reported. Based on these assumptions, we estimate that total annual burden hours for REHs to comply with these requirements would be 5,304 hours based on weekly reporting of the required information by 68 REHs × 52 weeks per year and at an average weekly response time of 1.5 hours for a registered nurse with an average hourly salary of $79. Therefore, the estimate for total annual costs for all hospitals and CAHs to comply with the required reporting provisions weekly would be $419,016 or approximately $6,162 per facility annually. We acknowledge that the data elements and reporting frequency could increase or decrease over the next two years, and those changes would impact this burden estimate.
We note that this estimate is assumed to be a one-day snapshot of reporting information as opposed to a cumulative weekly report accounting for information based on each day of that week. If we assumed a cumulative weekly account, we can assume reduced burden related to the actual reporting time, but anticipate that the estimate would be slightly higher to account for the need to track closely to daily reporting. We also acknowledge that respondents may have to track and invest in infrastructure in order to timely and accurately report on the specified frequency. Thus, respondents may face ongoing burdens associated with this collection even in the case of reduced frequency of submissions. We solicit comment on this potentiality.
Furthermore, we note that this estimate likely overestimates the costs associated with reporting because it assumes that all REHs will report manually. Efforts are underway to automate reporting that have the potential to significantly decrease reporting burden and improve reliability.
In addition, we proposed to establish reporting requirements for future PHEs related to epidemics and pandemics by requiring REHs to electronically report information on Acute Respiratory Illness (including, but not limited to, Seasonal Influenza Virus, Influenza-like Illness, and Severe Acute Respiratory Infection), SARS-CoV-2/COVID-19, and other viral and bacterial pathogens or infectious diseases of pandemic or epidemic potential only when the Secretary has declared a PHE directly related to such specific pathogens and infectious diseases. Specifically, when the Secretary has declared a PHE, we proposed to require REHs to report specific data elements to the CDC's National Health Safety Network (NHSN), or other CDC-supported surveillance systems, as determined by the Secretary. The final requirements of this section would apply to local, state, and national PHEs as declared by the Secretary. Relevant to the declared PHE, the categories of data elements that this report would include are as follows: suspected and confirmed infections of the relevant infectious disease pathogen among patients and staff; total deaths attributed to the relevant infectious disease pathogen among patients and staff; personal protective equipment and other relevant supplies in the facility; capacity and supplies in the facility relevant to the immediate and long term treatment of the relevant infectious disease pathogen, such as ventilator and dialysis/continuous renal replacement therapy capacity and supplies; total REH bed and intensive care unit bed census, capacity, and capability; staffing shortages; vaccine administration status of patients and staff for conditions monitored under this section and where a specific vaccine is applicable; relevant therapeutic inventories and/or usage; isolation capacity, including airborne isolation capacity; and key co-morbidities and/or exposure risk factors of patients being treated for the pathogen or disease of interest in this section that are captured with interoperable data standards and elements.
We also proposed to require that, unless the Secretary specifies an alternative format by which a REH must report each applicable infection (confirmed and suspected) and the applicable vaccination data in a format that provides person-level information, to include medical record identifier, race, ethnicity, age, sex, residential
For purposes of this burden collection, we acknowledge the unknown and the ongoing burdens that may exist even if CMS is not collecting information outside of a declared PHE. We recognize that considerations such as building and maintaining the infrastructure to support readiness are necessary to ensure compliance with this requirement.
CMS will pursue an emergency review of the collection of information in the case of a declared PHE and, if approved, use such burden estimate to inform its approach at that time. CMS will also publish an accompanying
We proposed that the emergency department of the REH be staffed 24 hours a day, 7 days a week, and we propose this requirement at § 485.6528(a) and that a doctor of medicine or osteopathy, nurse practitioner, clinical nurse specialist, or physician assistant must be available to furnish services in the REH in the facility 24 hours a day. The burden associated with this requirement is the time it takes to review the REH's written policies and make appropriate changes or updates regarding its staffing and staff responsibilities for the services it furnishes. In conjunction with a mid-level practitioner, the physician develops, executes, and periodically reviews the REH's written policies governing the services it furnishes. We estimate that it will take the physician and mid-level practitioner 1 hour each to review the REH written policies and make the appropriate changes. We also estimate that a REH will utilize the services of one clerical person for half an hour to process any changes or updates, for a total of 2.5 burden hours and an estimated cost per REH of $ 330 ((1 hour × $210 for a physician) + (1 hour × $101 for a mid-level practitioner) + (0.5 hours × $38 for clerical staff)). Therefore, the burden associated with this requirement is an estimated 170 burden hours (2.5 hours × 68 REHs) at an estimated cost of $22,440 ($330 × 68 REHs).
Proposed § 485.534(a) would require REHs to notify a patient of their rights and of whom to contact to file a grievance. We allow REHs the flexibility to use different approaches to meet this CoP. We have set forth general elements that should be common to all grievance processes, but have not delineated strategies and policies for implementing this system. We believe that in large measure, REHs would be able to use existing systems for providing patients with information and handling complaints, and the elements listed in the regulation only serve to give basic assurance that these systems are responsive to patient grievances and act effectively. A less specific approach would permit a nominal, non-functional system that in essence did not serve the very purpose intended by the regulation. Costs associated with formalizing a process and modifying any existing notices or processes will most likely be partially offset by a reduction in patient-initiated lawsuits regarding care, and should provide a valuable tool for targeting internal quality assurance mechanisms.
We asked that the patient be provided with written notice containing a contact person's name, the steps taken on behalf of the patient to investigate the grievance, the results of the grievance process, and the date of completion. Steps taken on behalf of the patient need not include a detailed description of who was spoken to and when. It might merely be that the appropriate staff were interviewed and that records were reviewed to investigate the grievance, and that the investigation found the grievance to be either unsubstantiated or substantiated. Second, the figures represented are estimates. We know of no existing system that tracks how many complaints are lodged in aggregate in hospitals or CAHs each year; however, for REHs, we believe that the grievance response can largely rely on standardized language with only relevant information filled in, or could be created in a check-sheet format, or in many other ways.
Thus, the burden associated with this requirement is the time and effort necessary to modify any existing notices to include the proposed grievance process requirements. We believe that an office assistant may be tasked with drafting or updating the notices and distributing or posting, as appropriate, the information. We estimate that this would require no more than two hours of the clerical staff time. Based on this we estimate that this will create a one-time cost of $5,168 (68 REHs × 2 hours × $38 clerical staff hourly wage). In addition, we estimate that it will require the office assistant 2 minutes (.0333 hours) to provide the notice per REH patient on an annual basis. The number of notices required will depend on the number of patients received at the REH. Therefore, the per facility burden associated with providing the notice will vary based on the unique factors of the REH. According to an OIG report, there were 2,316,675 outpatient visits in 2011 at CAHs.
In its resolution of a grievance, a REH must provide the patient with written notice of its decision that contains the name of the REH contact person, the steps taken on behalf of the patient to investigate the grievance, the results of
The burden associated with this requirement is the time and effort necessary to disclose the written notice to each patient who filed a grievance. We estimate that on average it will take each REH 15 minutes to develop and disseminate the required notice and estimate that an REH may have to provide 50 notices on an annual basis for a total annual burden. The burden hours would be 13 hours (0.25 hours × 50 notices). The total burden hours would be 884 hours (13 hours × 68 REHs) at the cost of $33,592 ($38 × 884 hours). Therefore, the total burden associated with this requirement is $188,632 ($5,168 to update notices, $149,872 to provide the notices, and $33,592 to provide the results of a grievance investigation).
Section 485.534(d), which sets forth the patient's right to access information in their records, will involve minimal burden as many states' existing laws cover this point. We have not proposed to require disclosure of all records, inasmuch as we recognize that there are situations where such a release could be harmful to the patient or another individual. Furthermore, we have not taken a prescriptive approach in specifying how quickly this information must be provided to the patient, or by setting a rate that the REH can charge. In the absence of state law, the REH should charge whatever is reasonable and customary in its community for duplication services (based on rates at local commercial copy centers, post offices, or other venues in which one could make photocopies). Therefore, while this requirement is subject to the PRA, we believe that the burden associated with this requirement is exempt from the PRA, as defined in 5 CFR 1320.3(b)(2) and (3) because this requirement is considered standard industry practice and/or is required under state or local law.
Section 485.534(e) requires that REH must have written policies and procedures regarding the use of restraint and seclusion that are consistent with current standards of practice. While the requirement is subject to the PRA, we believe the associated burden is exempt in accordance with 5 CFR 1320.3(b)(2) because the time, and effort, and financial resources necessary to comply with this requirement would be incurred by persons in the normal course of their activities. These are reasonable and customary state practices based on current standards of practice and the state would impose this standard for efficient utilization of Medicare or Medicaid services in the absence of a Federal requirement. However, we are soliciting comment on whether this is a customary business practice or whether this would impose an additional burden on those providers eligible to convert to an REH.
Section 485.534(f) requires facilities to establish staff training requirements for the use of restraints and seclusion. The REH must provide competency-based training and education of REH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the REH, on the use of restraint and seclusion. While these information collection requirements are subject to the PRA, we believe the burden associated with them are exempt as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement are incurred by persons in the normal course of their activities. However, we are soliciting comment on whether this is a customary business practice or whether this would impose an additional burden on those providers eligible to convert to an REH.
Section 485.534(g) requires the facility to report the death of a resident associated with restraint or seclusion to the CMS regional office. A report must include the name of the resident involved in the serious occurrence, a description of the occurrence, and the name, street address, and telephone number of the facility.
We estimate it will take 5 minutes to report each death to the CMS regional office and to document that report. We estimate fewer than 10 deaths annually for all 68 facilities. Five (5) minutes × 10 deaths annually would equate to a national burden of 50 minutes per year. The hourly adjusted rate for a Medical and Health Service Manager responsible for notifying the CMS regional office of a death a documenting the report is $122/hour. Multiplying the total burden of 0.83 hours by the hourly wage yields an associated cost of about $101.67.
Section 485.534(h) requires a REH to have written policies and procedures regarding the visitation rights of patients, including any clinically necessary or reasonable restriction or limitation that the REH may need to place on such rights and the reasons for the clinical restriction or limitation. Specifically, the written policies and procedures must contain the information listed in § 485.534(h)(1) through (4). Given that the statute requires a REH to have been either a CAH or rural hospital as of the date of enactment of the CAA, we expect these facilities to already have a visitation policy in accordance with the CAH and hospital CoPs at §§ 485.635(f) and 482.13(h), respectively. Therefore, the ICR burden associated with this requirement would be the time and effort necessary for a REH to review and make any necessary updates given its conversion to an REH and to distribute that information to patients. We expect that an office secretary or other clerical staff would update and distribute, or post as appropriate, the information and could accomplish this task in 15 minutes for an estimated one-time burden total of 17 hours (0.25 hours × 68 REHs) and at the cost of $646 ($38 × 17 hours).
At § 485.538, we proposed that each REH must have a transfer agreement in effect with at least one certified hospital that is a level I or level II trauma center for the referral and transfer of patients requiring emergency medical care beyond the capabilities of the REH. We estimate that it would require an REH administrator and a clerical person 2 hours each to develop the initial agreement and obtain the appropriate approvals. According to Table 1, the REH administrator's total hourly cost is $122 per hour. The clerical staff person's total hourly cost is $38. We estimate that for each REH to comply with the requirements in this section it would require 4 burden hours which would be a total of 272 hours (4 hours × 68 REHs). The cost is $320 ($244 (2 hours × $122 for an administrator) + $76 (2 hours × $38 for a clerical staff person)) for each REH. The total cost is $21,760 ($320 × 68 REHs). This is a one-time cost.
There is no burden attributed to this task. The REH's health care services are furnished in accordance with appropriate written policies that are consistent with applicable state law. The policies include a description of the services the REH furnishes directly and those furnished through agreement or arrangement; policies and procedures for emergency medical services and guidelines for medical management of health problems that include the conditions requiring medical consultation and/or patient referral and the maintenance of health care records.
We are not including burden associated with certain patient related activities such as health care plans, patient records, medical records, etc., because prudent institutions already incur this burden in the course of doing everyday business. As stated in 5 CFR 1320.3(b)(2), the burden associated with usual and customary business practices is exempt from the PRA. However, we are soliciting comment on whether this is a customary business practice or whether this would impose an additional burden on those providers eligible to convert to an REH. Further, state laws require providers to maintain patient records. (For example, the annotated Code of Maryland (10.11.03.13) requires a provider to be responsible for maintaining patient records for services that it provides.) State law requires record information that should include: documentation of personal interviews; diagnosis and treatment recommendations; records of professional visits and consultations; and consultant notes which shall be appropriately initialed or signed.
At § 485.536, we require REHs to develop, implement, and maintain an effective, ongoing, REH-wide, data-driven quality assessment and performance improvement (QAPI) program. The REH's governing body must ensure that the program reflects the complexity of the REH's organization and services; involves all REH departments and services (including those services furnished under contract or arrangement); and focuses on indicators related to improved health outcomes and the prevention and reduction of medical errors. The REH must maintain and demonstrate evidence of its QAPI program for review by CMS. In addition, REHs must comply with all of the requirements set forth in proposed § 485.536(a) through (e). We believe that the REH QAPI leadership (consisting of a physician, and/or administrator, mid-level practitioner, and a nurse) would need to have at least one and potentially two meetings to ensure that the current QAPI program that the provider has established is in accordance with the proposed requirements at § 485.536. The first meeting would be to discuss the current QAPI program and what, if anything, needs to be revised based on the proposed QAPI requirements at § 485.536. The second meeting, if needed, would be to discuss strategies to update the current policies, and then to discuss the process for incorporating those changes. We believe that these meetings would take approximately 2 hours each. We estimate that the physician would have a limited amount of time, approximately 1 hour to devote to the QAPI activities. Additionally, we estimate these activities would require 4 hours of an administrator's time, 4 hours of a mid-level practitioner's time, 8 hours of a nurse's time, and 2 hours of a clerical staff person's time for a total of 19 burden hours. We believe that the REH's QAPI leadership would need to meet periodically to review and discuss the changes that would need to be made to their program. We also believe that a nurse would likely spend more time developing the program with the mid-level practitioner. The physician would likely review and approve the program. The clerical staff member would probably assist with the program's development and ensure that the program was disseminated to all of the necessary parties in the REH.
Based on these factors, we estimate that for each REH to comply with the requirements in this section it would require annually 19 burden hours (1 hour for a physician + 4 hours for an administrator + 4 hours for a mid-level practitioner + 8 hours for a nurse + 2 hours for a clerical staff person) at a cost of $1,810 ($210 for a physician (1 hour × $210) + $488 for an administrator (4 hours x $122) + $404 for a mid-level practitioner (4 hours × $101) + $632 for a nurse (8 hours × $79) + $76 for a clerical staff person (2 hours × $38)). Therefore, for all 68 REHs to comply with these requirements, it would require 1,292 burden hours (19 hours × 68 REHs) at a cost of approximately $123,080 ($1,810 × 68 REHs).
Section 485.542 sets forth the emergency preparedness requirements for REHs. We note that these emergency preparedness standards are consistent national parameters that all Medicare and Medicaid participating providers and suppliers must meet. This includes both rural hospitals and CAHs and therefore facility that converts to an REH would have already incurred the costs to develop and implement their emergency preparedness plan. Based on this, the burden associated with these requirements would be the on-going costs to review, maintain and implement the emergency preparedness program to ensure ongoing compliance with the requirements and as such we have developed this COI section based largely on the existing COI burden for CAHs and hospitals.
We proposed to require REHs to develop and maintain an emergency preparedness plan that must be reviewed and updated at least biennially. We expect that each REH facilities director ($104 per hour) would conduct a thorough risk assessment that will consider its location and geographical area; patient population, including those with special needs; and the type of services they have the ability to provide in an emergency (12 hours biennially or 6 hours annually) based on the services that they are now providing as an REH. They each would also need to review the measures needed to ensure continuity of its operation, including delegations and succession plans. We estimate that ongoing compliance with this requirement would require 6 burden hours annually (12 biennially) from the REH facilities director. Therefore, for all 68 REHs to comply with this requirement, it would require 408 burden hours (6 × 68 REHs) at a cost of approximately $42,432 (408 hours × $104).
REHs are required to maintain emergency preparedness policies and procedures in accordance with their emergency plan, risk assessment, and communication plan. Each needs to review their emergency preparedness policies and procedures and revise, or in some cases, develop new policies and procedures that would ensure that the emergency preparedness plans address
We believe that the requirement for REHs to review and update their policies and procedures annually constitutes a usual and customary business practice and is not subject to the PRA in accordance with 5 CFR 1320.3(b)(2). However, we are soliciting comment on whether this is a customary business practice or whether this would impose an additional burden on those providers eligible to convert to an REH.
REHs are required to develop and maintain an emergency preparedness communication plan that complies with both Federal and state law and must be reviewed and updated at least annually. The burden associated with this requirement would be the time and effort necessary to review, revise, and if necessary, develop a new communications plan to ensure that it complies with the requirements of this regulation. However, we believe that most REHs have some type of emergency preparedness communication plan based on their prior status as a CAH or rural hospital. It is standard practice in the health care industry to have and maintain contact information for both staff and outside sources of assistance; alternate means of communications in case there is an interruption in phone service to the facility, such as cell phones; and a method for sharing information and medical documentation with other health care providers to ensure continuity of care for their patients.
If any revisions or additions are necessary to satisfy the requirements as an REH, we expect the revisions or additions would be those incurred during the course of normal business and thereby impose no additional burden. Thus, the ICRs related to the communication plan would constitute a usual and customary business practice as stated in the implementing regulations of the PRA at 5 CFR 1320.3(b)(2) and we did not include this activity in the burden analysis. We are soliciting comment on whether this is a customary business practice or whether this would impose an additional burden on those providers eligible to convert to an REH.
REHs are required to develop and maintain an emergency preparedness training and testing program. The training program must include initial training in emergency preparedness policies and procedures for all new and existing staff, individuals providing services under arrangement, and volunteers, consistent with their expected roles and must be documented. The testing program must include participation in a full-scale exercise that is community-based or when a community-based exercise is not accessible, an individual, facility-based. If an actual natural or man-made emergency that requires activation of the emergency plan is experienced, then this requirement is exempt for 1 year following the onset of the actual event. In addition, the testing program must include one additional testing exercise, which may be determined by the REH. The training must be provided biennially and two testing exercises must be conducted annually.
We expect that all REHs will review their current training programs in their current capacity as hospitals or CAHs, and compare them to their risk assessments and emergency preparedness plans, emergency policies and procedures, and emergency communication plans. The CAHs will need to revise and, if necessary, develop new sections or materials to ensure their training and testing programs complied with our requirements. We anticipate that ongoing compliance with this requirement will require the involvement of an administrator, the mid-level practitioner, the facilities director, and clerical staff. We expect that a mid-level practitioner will perform the initial review of the training program (4 hours), brief the administrator and the director of facilities (2 hours), and clerical staff to revise or develop new sections for the training program (1 hour), based on the group's decisions, if necessary. This will result in a cost of $894 ($404 for a mid-level practitioner (4 hours × $101) + $244 for an administrator (2 hours × $122) + $208 for a director of facilities (2 hours × $104) + $38 for a clerical staff person (1 hour × $38)) for each REH. Therefore, for all REHs to comply with this requirement it will require an estimated 476 burden hours (7 hours × 68 REHs) at a cost of $60,792 ($894 × 68 REHs).
The REH must meet the applicable provisions of the 2012 edition of the Life Safety Code (LSC) of the National Fire Protection Association. If CMS finds that the state has a fire and safety code imposed by the state law that adequately protects patients, CMS may allow the state survey agency to apply the state's fire and safety code instead of the LSC if waiving the provisions of the LSC does not adversely affect the health and safety of patients. This regulation requires a REH to maintain written evidence of regular inspections and approval by state fire control agencies. We estimate that the burden associated with maintaining written evidence of state inspections and approval would be an average of 30 minutes for clerical personnel to file the documentation, for a total of 34 burden hours (0.5 hours × 68 REHs) and a cost of $1,292 (34 hours × $38). The burden will be accounted for in a new information collection request (request for a new OMB control number) submitted for OMB approval.
Table 108 that follows summarizes our estimates of burden hours and costs for REHs. We emphasize that these estimates assume 68 conversions and that the number actually converting could be a fraction of this figure, or much higher, which as discussed earlier is an uncertainty addressed in both the NC RHRP and CLA study that estimated likely conversions. Our estimates of the cost per entity, however, would not be affected by the number of conversions.
Section 485.614(a) proposed to require CAHs to notify the patient of their rights and of whom to contact to file a grievance. We allow REHs the flexibility to use different approaches to meet this CoP. We have set forth general elements that should be common to all grievance processes, but have not delineated strategies and policies for implementing this system. We believe that in large measure, CAHs would be able to use existing systems for providing patients with information and handling complaints, and the elements listed in the regulation only serve to give basic assurance that these systems are responsive to patient grievances and act effectively. A less specific approach would permit a nominal, non-functional system that in essence did not serve the very purpose intended by the regulation. Costs associated with formalizing a process and modifying any existing notices or processes will most likely be offset by a reduction in patient-initiated lawsuits regarding care, and should provide a valuable tool for targeting internal quality assurance mechanisms.
We proposed that the patient be provided with written notice containing a contact person's name, the steps taken on behalf of the patient to investigate the grievance, the results of the grievance process, and the date of completion. Steps taken on behalf of the patient need not include a detailed description of who was spoken to and when. It might merely be that the appropriate staff were interviewed and that records were reviewed to investigate the grievance, and that the investigation found the grievance to be either unsubstantiated or substantiated. Second, the figures represented are estimates. We know of no existing system that tracks how many complaints are lodged in aggregate in CAHs each year; however, we believe that the grievance response can largely rely on standardized language with only relevant information filled in, or could be created in a check-sheet format, or in many other ways.
Thus, the burden associated with this requirement is the time and effort necessary to modify any existing notices to include the grievance process requirements. We believe that an office assistant may be tasked with drafting or updating the notices and distributing or posting, as appropriate, the information. We estimate that this would require no more than two hours of the clerical staff time. The burden hours are 2,720 (2 hours × 1,360). Based on this we estimate that this will create a one-time cost of $103,360 (2,720 hours × $38). In addition, we estimate that it will require the office assistant 2 minutes (.0333 hours) to provide the notice per CAH patient on an annual basis. The number of notices required will depend on the number of patients received at the CAH. Therefore, the per facility burden associated with providing the notice will vary based on the unique factors of the CAH. According to a 2013 OIG report, there were approximately 1,753 patient visits per CAH in 2011.
In its resolution of a grievance, a CAH must provide the patient with written notice of its decision that contains the name of the CAH contact person, the steps taken on behalf of the patient to investigate the grievance, the results of the grievance process, and the date of completion.
The burden associated with this requirement is the time and effort necessary to disclose the written notice to each patient who filed a grievance. We estimate that on average it will take each REH 15 minutes to develop and disseminate the required notice and estimate that a CAH may have to provide 50 notices on an annual basis. The burden hours for each CAH will be 12.5 (0.25 hour × 50 notices) for a total of 17,000 burden hours (12.5 hours × 1,360 CAHs). The total annual burden cost is $646,000 ($38 × 17,000).
Therefore, the total burden hours are 98,600 (78,880 + 17,000 + 2,720) and the total cost associated with this requirement is $3,746,800 ($103,360 to update notices, $2,997,440 to provide the notices, and $646,000 to provide the results of a grievance investigation).
Section 485.614(d), which sets forth the patient's right to access information in their records, will involve minimal burden as many states' existing laws cover this point. We did not propose to require disclosure of all records, inasmuch as we recognize that there are situations where such a release could be harmful to the patient or another individual. Furthermore, we have not taken a prescriptive approach in specifying how quickly this information must be provided to the patient, or by setting a rate that the CAH can charge. In the absence of state law, the REH should charge whatever is reasonable and customary in its community for duplication services (based on rates at local commercial copy centers, post offices, or other venues in which one could make photocopies). Therefore, while this requirement is subject to the PRA, we believe that the burden associated with this requirement is exempt from the PRA, as defined in 5 CFR 1320.3(b)(2) and (3) because this requirement is considered standard industry practice and/or is required under state or local law.
Section 485.614(e) requires that each CAH have written policies and procedures regarding the use of restraint and seclusion that are consistent with current standards of practice. While the requirement is subject to the PRA, we believe the associated burden is exempt in accordance with 5 CFR 1320.3(b)(2) because the time, and effort, and financial resources necessary to comply with this requirement would be incurred by persons in the normal course of their activities. These are reasonable and customary state practices and the state would impose this standard for efficient utilization of Medicare and Medicaid services in the absence of a Federal requirement. However, we are soliciting comment on whether this is a customary business practice or whether this would impose an additional burden.
Section 485.614(f) requires facilities to establish staff training requirements for the use of restraints and seclusion. The CAH must provide competency-based training and education of CAH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the CAH, on the use of restraint and seclusion. While these information collection requirements are subject to the PRA, we believe the burden associated with them are exempt as defined in 5 CFR 1320.3(b)(2) because the time, effort, and financial resources necessary to comply with the requirement are incurred by persons in
Section 485.614(g) requires the facility to report the death of a resident associated with seclusion or restraint to the CMS regional office. A report must include the name of the resident involved in the serious occurrence, a description of the occurrence, and the name, street address, and telephone number of the facility.
We estimate it will take 5 minutes to report each death to the CMS regional office and to document that report. We estimate fewer than 10 deaths annually for all 1,360 facilities. Five (5) minutes × 10 deaths annually would equate to a national burden of 50 minutes per year. The hourly adjusted rate for a Medical and Health Service Manager responsible for notifying the CMS regional office of a death a documenting the report is $122/hour. Multiplying the total burden of 0.83 hours by the hourly wage yields an associated cost of about $101.26.
The burden for the proposed CAH provisions will be accounted for under OMB control number 0938-1043.
Because of the large number of public comments we normally receive on
This final rule with comment period is necessary to make updates to the Medicare hospital OPPS rates. It is necessary to make changes to the payment policies and rates for outpatient services furnished by hospitals and CMHCs in CY 2023. We are required under section 1833(t)(3)(C)(ii) of the Act to update annually the OPPS conversion factor used to determine the payment rates for APCs. We also are required under section 1833(t)(9)(A) of the Act to review, not less often than annually, and revise the groups, the relative payment weights, and the wage and other adjustments described in section 1833(t)(2) of the Act. We must review the clinical integrity of payment groups and relative payment weights at least annually. We are revising the APC relative payment weights using claims data for services furnished on and after January 1, 2021, through and including December 31, 2021, and processed through June 30, 2022, and June 2020 HCRIS information with cost reporting periods prior to the PHE, consistent with our final policy of using data prior to the start of the PHE.
This final rule with comment period also is necessary to make updates to the ASC payment rates for CY 2023, enabling CMS to make changes to payment policies and payment rates for covered surgical procedures and covered ancillary services that are performed in ASCs in CY 2023. Because ASC payment rates are based on the OPPS relative payment weights for most of the procedures performed in ASCs, the ASC payment rates are updated annually to reflect annual changes to the OPPS relative payment weights. In addition, we are required under section 1833(i)(1) of the Act to review and update the list of surgical procedures that can be performed in an ASC, not less frequently than every 2 years.
In the CY 2019 OPPS/ASC final rule with comment period (83 FR 59075 through 59079), we finalized a policy to update the ASC payment system rates using the hospital market basket update instead of the CPI-U for CY 2019 through 2023. We believe that this policy will help stabilize the differential between OPPS payments and ASC payments, given that the CPI-U has been generally lower than the hospital market basket, and encourage the migration of services to lower cost settings as clinically appropriate.
In this final rule with comment period, we received comments on the Request for Information included in the CY 2023 OPPS/ASC proposed rule on possible alternative methodologies for counting organs for transplant hospitals and organ procurement organizations to calculate Medicare's share of organ acquisition costs. We will consider those comments in developing possible future rulemaking or other guidance.
Additionally, we are finalizing our proposal to exclude research organs from total usable organs used in the ratio to calculate Medicare's share of
We have examined the impacts of this final rule with comment period, as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)). This section of this final rule with comment period contains the impact and other economic analyses for the provisions we are finalizing for CY 2023.
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action that is likely to result in a rule: (1) having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as “economically significant”); (2) creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive order. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
A regulatory impact analysis (RIA) must be prepared for major rules with significant regulatory action/s and/or with economically significant effects ($100 million or more in any 1 year). This final rule with comment period has been designated as an economically significant rule under section 3(f)(1) of Executive Order 12866 and hence also a major rule under Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (also known as the Congressional Review Act). Accordingly, this final rule with comment period has been reviewed by the Office of Management and Budget. We have prepared a regulatory impact analysis that, to the best of our ability, presents the costs and benefits of the provisions of this final rule with comment period. We solicited public comments on the regulatory impact analysis in the CY 2023 OPPS/ASC proposed rule, and we address any public comments we received in this final rule with comment period, as appropriate.
We estimate that the total increase in Federal Government expenditures under the OPPS for CY 2023, compared to CY 2022, due to the changes to the OPPS in this final rule with comment period, will be approximately $2.53 billion. Taking into account our estimated changes in enrollment, utilization, and case-mix for CY 2023, we estimate that the OPPS expenditures, including beneficiary cost-sharing, for CY 2023 will be approximately $86.5 billion, which is approximately $6.5 billion higher than estimated OPPS expenditures in CY 2022. Because the provisions of the OPPS are part of a final rule with comment period that is economically significant, as measured by the threshold of an additional $100 million in expenditures in 1 year, we have prepared this regulatory impact analysis that, to the best of our ability, presents its costs and benefits. Table 110 of this final rule with comment period displays the distributional impact of the CY 2023 changes in OPPS payment to various groups of hospitals and for CMHCs.
We note that under our final CY 2023 policy, drugs and biologicals that are acquired under the 340B Program will generally be paid at ASP plus 6 percent, WAC plus 6 percent, or 95 percent of AWP, as applicable. The impacts on hospital rates as a result of this final policy are reflected in the discussion of the estimated effects of this final rule with comment period. Because we are reverting to our previous policy of generally paying ASP plus 6 percent for drugs acquired under the 340B program, we are removing the increase to the OPPS conversion factor that was adopted as part of the budget neutral implementation of the 340B policy, consistent with our longstanding policy of offsetting increases or decreases in particular payments through an adjustment to the OPPS conversion factor.
We estimate that the final update to the conversion factor and other budget neutrality adjustments will increase total OPPS payments by 4.8 percent in CY 2023. The changes to the APC relative payment weights, the changes to the wage indexes, the continuation of a payment adjustment for rural SCHs, including EACHs, and the payment adjustment for cancer hospitals will not increase total OPPS payments because these changes to the OPPS are budget neutral. However, these updates will change the distribution of payments within the budget neutral system. We estimate that the total change in payments between CY 2022 and CY 2023, considering all budget-neutral payment adjustments, changes in estimated total outlier payments, the application of the frontier State wage adjustment, in addition to the application of the OPD fee schedule increase factor after all adjustments required by sections 1833(t)(3)(F), 1833(t)(3)(G), and 1833(t)(17) of the Act, the exception for rural sole community hospitals from the clinic visit policy when provided at off-campus provider based departments, and the payment adjustment for the additional resource costs for domestic NIOSH-approved surgical N95 respirators will increase total estimated OPPS payments by 4.5 percent.
We estimate the total increase (from changes to the ASC provisions in this final rule with comment period, as well as from enrollment, utilization, and case-mix changes) in Medicare expenditures (not including beneficiary cost-sharing) under the ASC payment system for CY 2023 compared to CY 2022, to be approximately $230 million. Tables 111 and 112 of this final rule with comment period display the redistributive impact of the CY 2023 changes regarding ASC payments, grouped by specialty area and then grouped by procedures with the greatest ASC expenditures, respectively.
The distributional impacts presented here are the projected effects of the final CY 2023 policy changes on various hospital groups. We post our hospital-specific estimated payments for CY 2023 on the CMS website with the other supporting documentation for this final rule with comment period. To view the hospital-specific estimates, we refer readers to the CMS website at:
We estimate the effects of the individual policy changes by estimating payments per service, while holding all other payment policies constant. We use the best data available, but do not attempt to predict behavioral responses to our policy changes in order to isolate the effects associated with specific policies or updates, but any policy that changes payment could have a behavioral response. In addition, we have not made any adjustments for future changes in variables, such as service volume, service-mix, or number of encounters.
In section V.B of this final rule with comment period, we discuss our final policy to adjust the payment amount for nonpass-through, separately payable drugs acquired by certain 340B participating hospitals through the 340B Program. In this final rule with comment period for CY 2023, for hospitals paid under the OPPS, payment for separately payable drugs and biologicals that are obtained with a 340B discount will generally be ASP plus 6 percent. Additionally, we are decreasing the OPPS conversion factor by the same percentage that we increased the OPPS conversion factor in CY 2018 to implement the 340B policy in a budget neutral manner. After applying this payment methodology for drugs and biologicals purchased under the 340B Program, we currently estimate that we would apply a budget neutrality adjustment of 0.9691 to the OPPS conversion factor to remove the original CY 2018 OPPS budget neutrality adjustment for 340B acquired drugs. More information on the comments received on the 340B policy can be found in section V.B.6 of this final rule with comment period.
As discussed in section X.H of this final rule with comment period, we are finalizing IPPS and OPPS payment adjustments for the additional resource costs that hospitals incur in procuring domestic NIOSH-approved surgical N95 respirators. The payment adjustments will commence for cost reporting periods beginning on or after January 1, 2023.
For the IPPS, we are making 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 domestic NIOSH-approved surgical N95 respirators that is critical to protect the health and safety of personnel and patients in a public health emergency, we are not making the IPPS payment adjustment budget neutral under the IPPS. The data currently available to calculate a spending estimate for CY 2023 under the IPPS is limited. However, we believe the methodology described next to calculate this spending estimate under the IPPS for CY 2023 is reasonable based on the information available.
To calculate the estimated total spending associated with this policy under the IPPS we multiplied together estimates of the following:
(1) Estimate of the total number of NIOSH-approved surgical N95 respirators used in the treatment of IPPS 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 IPPS patients in CY 2023 that are domestic.
For purposes of this estimate, we believe it is reasonable to assume that on average approximately one NIOSH-approved surgical N95 respirator is used for every day a beneficiary is in the hospital. The FY 2021 MedPAR claims data used for ratesetting in the FY 2023 IPPS/LTCH final rule accounted for approximately 7.3 million IPPS discharges and 38.4 million Medicare covered days. Therefore, for CY 2023, we are estimating that the total number of NIOSH-approved surgical N95 respirators (both domestic and non-domestic) used in the treatment of IPPS patients will be 38.4 million. Based on available data, our best estimate of the difference in the average unit costs of domestic and non-domestic NIOSH-approved surgical N95 respirators is $0.20.
It is particularly challenging to estimate the percentage of NIOSH-approved surgical N95 respirators that will be used in the treatment of IPPS patients in CY 2023 that will be domestic. The OMB's Made in America Office recently conducted a data call on capacity in which several entities attested to being able to supply 3.6 billion NIOSH-approved and Berry-compliant surgical N95 respirators annually in the future if there were sufficient demand. We recognize that it may take time for this capacity to be fully reflected in hospital purchases. Therefore, although this would be sufficient capacity to supply the entire hospital industry if it were to be available and focused on this segment of the marketplace in 2023, we believe it is reasonable to assume that this will not happen instantaneously and hospitals in aggregate may in fact be able to purchase less than half of their NIOSH-approved surgical N95 respirators as domestic in 2023. Therefore, for purposes of this IPPS spending estimate, we set the percentage of NIOSH-approved surgical N95 respirators used in the treatment of IPPS patients in CY 2023 that are domestic to 40 percent, or slightly less than half. We estimate that total CY 2023 IPPS payments associated with this policy will be $3.1 million (or 38.4 million covered days * $0.20 * 40 percent).
For the OPPS, we are making this payment adjustment for the additional resource costs of domestic NIOSH-approved surgical N95 respirators 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. Consistent with this authority, the final OPPS payment adjustment will be
Table 110 shows the estimated impact of this final rule with comment period on hospitals. Historically, the first line of the impact table, which estimates the change in payments to all facilities, has always included cancer and children's hospitals, which are held harmless to their pre-Balanced Budget Act (BBA) amount. We also include CMHCs in the first line that includes all providers. We include a second line for all hospitals, excluding permanently held harmless hospitals and CMHCs.
We present separate impacts for CMHCs in Table 110, and we discuss them separately below, because CMHCs are paid only for partial hospitalization services under the OPPS and are a different provider type from hospitals. In CY 2023, we are continuing to pay CMHCs for partial hospitalization services under APC 5853 (Partial Hospitalization for CMHCs) and to pay hospitals for partial hospitalization services under APC 5863 (Partial Hospitalization for Hospital-Based PHPs).
The estimated increase in the total payments made under the OPPS is determined largely by the increase to the conversion factor under the statutory methodology. The distributional impacts presented do not include assumptions about changes in volume and service-mix. The conversion factor is updated annually by the OPD fee schedule increase factor, as discussed in detail in section II.B of this final rule with comment period.
Section 1833(t)(3)(C)(iv) of the Act provides that the OPD fee schedule increase factor is equal to the market basket percentage increase applicable under section 1886(b)(3)(B)(iii) of the Act, which we refer to as the IPPS market basket percentage increase. The IPPS market basket percentage increase applicable to the OPD fee schedule for CY 2023 is 4.1 percent. Section 1833(t)(3)(F)(i) of the Act reduces that 4.1 percent by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act, which is 0.3 percentage point for CY 2023 (which is also the productivity adjustment for FY 2023 in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49056)), resulting in the CY 2023 OPD fee schedule increase factor of 3.8 percent. We are using the OPD fee schedule increase factor of 3.8 percent in the calculation of the CY 2023 OPPS conversion factor. Section 10324 of the Affordable Care Act, as amended by HCERA, further authorized additional expenditures outside budget neutrality for hospitals in certain frontier States that have a wage index less than 1.0000. The amounts attributable to this frontier State wage index adjustment are incorporated in the estimates in Table 110 of this final rule with comment period.
To illustrate the impact of the CY 2023 changes, our analysis begins with a baseline simulation model that uses the CY 2022 relative payment weights, the FY 2022 final IPPS wage indexes that include reclassifications, and the final CY 2022 conversion factor. Table 110 shows the estimated redistribution of the increase or decrease in payments for CY 2023 over CY 2022 payments to hospitals and CMHCs as a result of the following factors: the impact of the APC reconfiguration and recalibration changes between CY 2022 and CY 2023 (Column 2); the wage indexes and the provider adjustments (Column 3); the combined impact of all of the changes described in the preceding columns plus the 3.8 percent OPD fee schedule increase factor update to the conversion factor (Column 4); the estimated differential impact of the rural SCH exception to the Off Campus Provider Based Department Visits Policy (Column 5); the estimated impact taking into account all payments for CY 2023 relative to all payments for CY 2022, including the impact of changes in estimated outlier payments, changes to the pass-through payment estimate, the change to except rural sole community hospitals from the clinic visit policy when provided at campus provider based departments, and the payment adjustment for the additional resource costs to hospitals of acquiring domestic NIOSH-approved surgical N95 respirators (Column 6).
We did not model an explicit budget neutrality adjustment for the rural adjustment for SCHs because we are maintaining the current adjustment percentage for CY 2023. Because the updates to the conversion factor (including the update of the OPD fee schedule increase factor), the estimated cost of the rural adjustment, and the estimated cost of projected pass-through payment for CY 2023 are applied uniformly across services, observed redistributions of payments in the impact table for hospitals largely depend on the mix of services furnished by a hospital (for example, how the APCs for the hospital's most frequently furnished services will change), and the impact of the wage index changes on the hospital. However, total payments made under this system and the extent to which this final rule with comment period will redistribute money during implementation also will depend on changes in volume, practice patterns, and the mix of services billed between CY 2022 and CY 2023 by various groups of hospitals, which CMS cannot forecast.
Overall, we estimate that the rates for CY 2023 will increase Medicare OPPS payments by an estimated 4.5 percent. Removing payments to cancer and children's hospitals because their payments are held harmless to the pre-OPPS ratio between payment and cost and removing payments to CMHCs results in an estimated 4.7 percent increase in Medicare payments to all other hospitals. These estimated payments will not significantly impact other providers.
The first line in Column 1 in Table 110 shows the total number of facilities (3,508), including designated cancer and children's hospitals and CMHCs, for which we were able to use CY 2021 hospital outpatient and CMHC claims data to model CY 2022 and CY 2023 payments, by classes of hospitals, for CMHCs and for dedicated cancer hospitals. We excluded all hospitals and CMHCs for which we could not plausibly estimate CY 2022 or CY 2023 payment and entities that are not paid under the OPPS. The latter entities include CAHs, all-inclusive hospitals, and hospitals located in Guam, the U.S. Virgin Islands, Northern Mariana Islands, American Samoa, and the State of Maryland. This process is discussed in greater detail in section II.A of this final rule with comment period. At this time, we are unable to calculate a DSH variable for hospitals that are not also paid under the IPPS because DSH payments are only made to hospitals paid under the IPPS. Hospitals for which we do not have a DSH variable are grouped separately and generally include freestanding psychiatric hospitals, rehabilitation hospitals, and long-term care hospitals. We show the total number of OPPS hospitals (3,414), excluding the hold-harmless cancer and children's hospitals and CMHCs, on the second line of the table. We excluded cancer and children's hospitals because section 1833(t)(7)(D) of the Act permanently holds harmless cancer hospitals and children's hospitals to their “pre-BBA amount” as specified under the terms of the statute, and
Column 2 shows the estimated effect of APC recalibration. Column 2 also reflects any changes in multiple procedure discount patterns or conditional packaging that occur as a result of the changes in the relative magnitude of payment weights. As a result of APC recalibration, we estimate that urban hospitals will experience a 0.1 increase, with the impact ranging from a decrease of 0.2 percent to an increase of 0.5, depending on the number of beds. Rural hospitals will experience an estimated decrease of 0.1 overall. Major teaching hospitals will experience an estimated decrease of 0.3 percent.
Column 3 demonstrates the combined budget neutral impact of the APC recalibration; the updates for the wage indexes with the FY 2023 IPPS post-reclassification wage indexes; the rural adjustment; the frontier adjustment, and the cancer hospital payment adjustment. We modeled the independent effect of the budget neutrality adjustments and the OPD fee schedule increase factor by using the relative payment weights and wage indexes for each year, and using a CY 2022 conversion factor that included the OPD fee schedule increase and a budget neutrality adjustment for differences in wage indexes.
Column 3 reflects the independent effects of the updated wage indexes, including the application of budget neutrality for the rural floor policy on a nationwide basis, as well as the CY 2023 changes in wage index policy, discussed in section II.C of this final rule with comment period. We did not model a budget neutrality adjustment for the rural adjustment for SCHs because we are continuing the rural payment adjustment of 7.1 percent to rural SCHs for CY 2023, as described in section II.E of this final rule with comment period. We also did not model a budget neutrality adjustment for the proposed cancer hospital payment adjustment because the proposed payment-to-cost ratio target for the cancer hospital payment adjustment in CY 2023 is 0.89, the same as the ratio that was reported for the CY 2022 OPPS/ASC final rule with comment period (85 FR 85914). We note that, in accordance with section 16002 of the 21st Century Cures Act, we are applying a budget neutrality factor calculated as if the cancer hospital adjustment target payment-to-cost ratio was 0.90, not the 0.89 target payment-to-cost ratio we are applying in section II.F of this final rule with comment period.
We modeled the independent effect of updating the wage indexes by varying only the wage indexes, holding APC relative payment weights, service-mix, and the rural adjustment constant and using the CY 2023 scaled weights and a CY 2022 conversion factor that included a budget neutrality adjustment for the effect of the changes to the wage indexes between CY 2022 and CY 2023.
Column 4 demonstrates the impact of paying for 340B-acquired drugs at ASP+6 percent and removing the 3.19 percent increase to the conversion factor that was made in CY 2018 to implement the 340B policy in a budget neutral manner.
Column 5 demonstrates the combined impact of all of the changes previously described and the update to the conversion factor of 3.8 percent. Overall, these changes will increase payments to urban hospitals by 5.3 percent and to rural hospitals by 2.7 percent. Sole community hospitals receive an estimated increase of 1.7 percent while other rural hospitals receive an estimated increase of 4.3 percent.
Column 6 displays the estimated effect of the exception for rural sole community hospitals to the volume control method to pay for clinic visit HCPCS code G0463 (Hospital outpatient clinic visit for assessment and management of a patient) when billed with modifier “PO” by an excepted off-campus PBD at 40 percent of the OPPS rate for a clinic visit service for CY 2023. This exception is estimated to increase payments to rural sole community hospitals by 1.1 percent.
Column 7 depicts the full impact of the final CY 2023 policies on each hospital group by including the effect of all changes for CY 2023 and comparing them to all estimated payments in CY 2021. Column 7 shows the combined budget neutral effects of Columns 2 and 3; the OPD fee schedule increase; the impact of estimated OPPS outlier payments, as discussed in section II.G of this final rule with comment period; the change in the Hospital OQR Program payment reduction for the small number of hospitals in our impact model that failed to meet the reporting requirements (discussed in section XIV of this final rule with comment period); the change to except rural sole community hospitals from the clinic visit policy when provided at excepted off-campus provider-based departments, and the adjustment for the additional resource costs of acquiring domestic NIOSH-approved surgical N95 respirators.
Of those hospitals that failed to meet the Hospital OQR Program reporting requirements for the full CY 2022 update (and assumed, for modeling purposes, to be the same number for CY 2023), we included 20 hospitals in our model because they had both CY 2021 claims data and recent cost report data. We estimate that the cumulative effect of all changes for CY 2023 will increase payments to all facilities by 4.5 percent for CY 2022. We modeled the independent effect of all changes in Column 7 using the final relative payment weights for CY 2022 and the final relative payment weights for CY 2023. We used the final conversion factor for CY 2023 of $85.585 and the final CY 2022 conversion factor of $84.177 discussed in section II.B of this final rule with comment period. While the calculation to determine the conversion factor includes the differences between the amounts carved out for pass-through payment in CYs 2022 and 2023, as this change is implemented in a budget neutral manner, we have excluded it from the impact calculations displayed in Table 110 below because it has no estimated overall effect on OPPS total payments.
Column 7 contains simulated outlier payments for each year. We used the 1-year charge inflation factor used in the FY 2023 IPPS/LTCH PPS final rule (87 FR 49427) of 6.4 percent (1.06404) to increase charges on the CY 2021 claims, and we used the overall CCR in the July 2022 Outpatient Provider-Specific File (OPSF) to estimate outlier payments for CY 2022. Using the CY 2021 claims and a 6.4 percent charge inflation factor, we currently estimate that outlier payments for CY 2022, using a multiple threshold of 1.75 and a fixed-dollar threshold of $6,175, will be approximately 1.26 percent of total payments. The estimated current outlier payments of 1.26 percent are incorporated in the comparison in Column 5. We used the same set of claims and a charge inflation
Overall, we estimate that facilities will experience an increase of 4.5 percent under this final rule in CY 2023 relative to total spending in CY 2022. This projected increase (shown in Column 7) of Table 110 of this final rule with comment period reflects the 3.8 percent OPD fee schedule increase factor, the change to except rural sole community hospitals from the clinic visit policy when provided at excepted off-campus provider-based departments, and the adjustment for the additional resource costs of acquiring domestic NIOSH-approved surgical N95 respirators, minus the difference in estimated outlier payments between CY 2022 (1.26 percent) and CY 2023 (1.0 percent). We estimate that the combined effect of all changes for CY 2023 will increase payments to urban hospitals by 4.9 percent. Overall, we estimate that rural hospitals will experience a 2.9 percent increase as a result of the combined effects of all the changes for CY 2023.
Among hospitals, by teaching status, we estimate that the impacts resulting from the combined effects of all changes will include an increase of 6.8 percent for major teaching hospitals and an increase of 3.1 percent for nonteaching hospitals. Minor teaching hospitals will experience an estimated increase of 4.2 percent.
In our analysis, we also have categorized hospitals by type of ownership. Based on this analysis, we estimate that voluntary hospitals will experience an increase of 4.9 percent, proprietary hospitals will experience an increase of 1.3 percent, and governmental hospitals will experience an increase of 5.9 percent.
The last line of Table 110 demonstrates the isolated impact on CMHCs, which furnish only partial hospitalization services under the OPPS. In CY 2022, CMHCs are paid under APC 5853 (Partial Hospitalization (3 or more services) for CMHCs). We modeled the impact of this APC policy assuming CMHCs will continue to provide the same number of days of PHP care as seen in the CY 2021 claims used for ratesetting in the final rule. We excluded days with one or two services because our policy only pays a per diem rate for partial hospitalization when three or more qualifying services are provided to the beneficiary. We note that under our final policy, 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 by maintaining the CY 2022 CMHC APC payment rate. As a result, we estimate that CMHCs will experience no change in CY 2023 payments relative to their CY 2022 payments.(shown in Column 7). For a detailed discussion of our final PHP policies, please see section VIII of this final rule with comment period.
Column 3 shows the estimated impact of adopting the final FY 2023 wage index values which result in an increase of 0.0 percent to CMHCs. Column 4 shows that combining the OPD fee schedule increase factor, along with the final changes in APC policy for CY 2023 and the final FY 2023 wage index updates, will result in an estimated decrease of—3.1 percent. Column 7 reflects no change, per our final policy to maintain the CY 2022 CMHC APC payment rates in CY 2023.
For services for which the beneficiary pays a copayment of 20 percent of the payment rate, the beneficiary's payment would increase for services for which the OPPS payments will rise and will decrease for services for which the OPPS payments will fall. For further discussion of the calculation of the national unadjusted copayments and minimum unadjusted copayments, we refer readers to section II.H of this final rule with comment period. In all cases, section 1833(t)(8)(C)(i) of the Act limits beneficiary liability for copayment for a procedure performed in a year to the hospital inpatient deductible for the applicable year.
We estimate that the aggregate beneficiary coinsurance percentage would be approximately 18.1 percent for all services paid under the OPPS in CY 2023. The estimated aggregate beneficiary coinsurance reflects general system adjustments, including the Final CY 2023 comprehensive APC payment policy discussed in section II.A.2.b of this final rule with comment period. We note that the individual payments, and therefore copayments, associated with services may differ based on the setting in which they are furnished. However, at the aggregate system level, we do not currently observe significant impact on beneficiary coinsurance as a result of those policies.
The relative payment weights and payment amounts established under the OPPS affect the payments made to ASCs, as discussed in section XIII of this final rule with comment period. No types of providers or suppliers other than hospitals, CMHCs, and ASCs will
The effect on the Medicare program is expected to be an increase of $2.53 billion in program payments for OPPS services furnished in CY 2023. The effect on the Medicaid program is expected to be limited to copayments that Medicaid may make on behalf of Medicaid recipients who are also Medicare beneficiaries. We estimate that the changes in this final rule with comment period will increase these Medicaid beneficiary payments by approximately $150 million in CY 2023. Currently, there are approximately 10 million dual-eligible beneficiaries, which represent approximately 30 percent of Medicare Part B fee-for-service beneficiaries. The impact on Medicaid was determined by taking 30 percent of the beneficiary cost-sharing impact. The national average split of Medicaid payments is 57 percent Federal payments and 43 percent State payments. Therefore, for the estimated $150 million Medicaid increase, approximately $85 million will be from the Federal Government and $65 million will be from State governments.
Alternatives to the OPPS changes we proposed and the reasons for our selected alternatives are discussed throughout this final rule with comment period.
• Alternatives Considered for the Claims Data used in OPPS and ASC Ratesetting due to the PHE.
We refer readers to section X.B of this final rule with comment period for a discussion of our final policy of using cost report data prior to the PHE. We note, in that section we discuss the alternative proposal we considered regarding applying the standard ratesetting process, in particular the selection of cost report data used, which would include claims and cost report data including the timeframe of the PHE. We note that there are potential issues related to that data, including the effect of the PHE on the provider departmental CCRs that would be used to estimate cost. In this final rule with comment period, as discussed in section X.D, we are finalizing a policy of using updated CY 2021 claims data in CY 2023 OPPS ratesetting, while using cost report CCRs with reporting periods prior to the PHE.
We note that these policy considerations also have ASC implications since the relative weights for certain surgical procedures performed in the ASC setting are developed based on the OPPS relative weights and claims data.
Most ASC payment rates are calculated by multiplying the ASC conversion factor by the ASC relative payment weight. As discussed fully in section XIII of this final rule with comment period, we are setting the CY 2023 ASC relative payment weights by scaling the final CY 2023 OPPS relative payment weights by the final ASC scalar of 0.8594. The estimated effects of the updated relative payment weights on payment rates are varied and are reflected in the estimated payments displayed in Tables 111 and 112.
Beginning in CY 2011, section 3401 of the Affordable Care Act requires that the annual update to the ASC payment system (which, in CY 2019, we adopted a policy to be the hospital market basket update for CY 2019 through CY 2023) after application of any quality reporting reduction be reduced by a productivity adjustment. Section 1886(b)(3)(B)(xi)(II) of the Act defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private nonfarm business multifactor productivity (as projected by the Secretary for the 10-year period, ending with the applicable fiscal year, year, cost reporting period, or other annual period). For ASCs that fail to meet their quality reporting requirements, the CY 2023 payment determinations would be based on the application of a 2.0 percentage point reduction to the annual update factor, which would be the hospital market basket update for CY 2023. We calculated the CY 2023 ASC conversion factor by adjusting the CY 2022 ASC conversion factor by 1.0008 to account for changes in the pre-floor and pre-reclassified hospital wage indexes between CY 2022 and CY 2023 and by applying 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 productivity adjustment of 0.3 percentage point). The CY 2023 ASC conversion factor is $51.854 for ASCs that successfully meet the quality reporting requirements.
Presented here are the projected effects of the final changes for CY 2023 on Medicare payment to ASCs. A key limitation of our analysis is our inability to predict changes in ASC service-mix between CY 2021 and CY 2023 with precision. We believe the net effect on Medicare expenditures resulting from the final CY 2023 changes will be small in the aggregate for all ASCs. However, such changes may have differential effects across surgical specialty groups, as ASCs continue to adjust to the payment rates based on the policies of the revised ASC payment system. We are unable to accurately project such changes at a disaggregated level. Clearly, individual ASCs would experience changes in payment that differ from the aggregated estimated impacts presented below.
Some ASCs are multispecialty facilities that perform a wide range of surgical procedures from excision of lesions to hernia repair to cataract extraction; others focus on a single specialty and perform only a limited range of surgical procedures, such as eye, digestive system, or orthopedic procedures. The combined effect on an individual ASC of the final update to the CY 2023 payments will depend on a number of factors, including, but not limited to, the mix of services the ASC provides, the volume of specific services provided by the ASC, the percentage of its patients who are Medicare beneficiaries, and the extent to which an ASC provides different services in the coming year. The following discussion includes tables that display estimates of the impact of the final CY 2023 updates to the ASC payment system on Medicare payments to ASCs, assuming the same mix of services, as reflected in our CY 2021 claims data. Table 111 depicts the estimated aggregate percent change in payment by surgical specialty or ancillary items and services group by comparing estimated CY 2022 payments to estimated CY 2023 payments, and Table 112 shows a comparison of estimated CY 2022 payments to estimated CY 2023 payments for procedures that we estimate would receive the most Medicare payment in CY 2022.
In Table 111, we have aggregated the surgical HCPCS codes by specialty group, grouped all HCPCS codes for covered ancillary items and services into a single group, and then estimated the effect on aggregated payment for surgical specialty and ancillary items and services groups. The groups are sorted for display in descending order by estimated Medicare program payment to ASCs. The following is an explanation of the information presented in Table 111.
• Column 1—Surgical Specialty or Ancillary Items and Services Group
• Column 2—Estimated CY 2022 ASC Payments were calculated using CY 2021 ASC utilization data (the most recent full year of ASC utilization) and CY 2022 ASC payment rates. The surgical specialty groups are displayed in descending order based on estimated CY 2022 ASC payments.
• Column 3—Estimated CY 2023 Percent Change is the aggregate percentage increase or decrease in Medicare program payment to ASCs for each surgical specialty or ancillary items and services group that is attributable to proposed updates to ASC payment rates for CY 2023 compared to CY 2022.
As shown in Table 111, for the six specialty groups that account for the most ASC utilization and spending, we estimate that the final update to ASC payment rates for CY 2023 will result in a 3 percent increase in aggregate payment amounts for eye and ocular adnexa procedures, a 4 percent increase in aggregate payment amounts for nervous system procedures, 7 percent increase in aggregate payment amounts for musculoskeletal system procedures, a 5 percent increase in aggregate payment amounts for digestive system procedures, a 2 percent increase in aggregate payment amounts for cardiovascular system procedures, and a 4 percent increase in aggregate payment amounts for genitourinary system procedures. We note that these changes can be a result of different factors, including updated data, payment weight changes, and changes in policy. In general, spending in each of these categories of services is increasing due to the 3.8 percent payment rate update. After the payment rate update is accounted for, aggregate payment increases or decreases for a category of services can be higher or lower than a 3.8 percent increase, depending on if payment weights in the OPPS APCs that correspond to the applicable services increased or decreased or if the most recent data show an increase or a decrease in the volume of services performed in an ASC for a category. For example, we estimate a 7 percent increase in aggregate musculoskeletal procedure payments. The increase in payment rates for musculoskeletal procedures as a result of increased OPPS relative weights and device portions is further increased by the 3.8 percent ASC rate update for these procedures. Conversely, we estimate only a 3 percent increase in aggregate eye and ocular adnexa procedures related to a decrease in OPPS relative weights partially offsetting the 3.8 percent ASC rate update. For estimated changes for selected procedures, we refer readers to Table 111 provided later in this section.
Table 111 shows the estimated impact of the updates to the revised ASC payment system on aggregate ASC payments for selected surgical procedures during CY 2023. The table displays 30 of the procedures receiving the greatest estimated CY 2022 aggregate Medicare payments to ASCs. The HCPCS codes are sorted in descending order by estimated CY 2022 program payment.
• Column 1—CPT/HCPCS code.
• Column 2—Short Descriptor of the HCPCS code.
• Column 3—Estimated CY 2022 ASC Payments were calculated using CY 2021 ASC utilization (the most recent full year of ASC utilization) and the CY 2022 ASC payment rates. The estimated CY 2022 payments are expressed in millions of dollars.
• Column 4—Estimated CY 2023 Percent Change reflects the percent differences between the estimated ASC payment for CY 2022 and the estimated payment for CY 2023 based on the final update.
We estimate that the CY 2023 update to the ASC payment system will be generally positive (that is, result in lower cost-sharing) for beneficiaries with respect to the new procedures to be designated as office-based for CY 2023. First, other than certain preventive services where coinsurance and the Part B deductible is waived to comply with sections 1833(a)(1) and (b) of the Act, the ASC coinsurance rate for all procedures is 20 percent. This contrasts with procedures performed in HOPDs under the OPPS, where the beneficiary is responsible for copayments that range from 20 percent to 40 percent of the procedure payment (other than for certain preventive services), although the majority of HOPD procedures have a 20-percent copayment. Second, in almost all cases, the ASC payment rates under the ASC payment system are lower than payment rates for the same procedures under the OPPS. Therefore, the beneficiary coinsurance amount under the ASC payment system will almost always be less than the OPPS copayment amount for the same services. (The only exceptions will be if the ASC coinsurance amount exceeds the hospital inpatient deductible since the statute requires that OPPS copayment amounts not exceed the hospital inpatient deductible. Therefore, in limited circumstances, the ASC coinsurance amount may exceed the hospital inpatient deductible and, therefore, the OPPS copayment amount for similar services.) Beneficiary coinsurance for services migrating from physicians' offices to ASCs may decrease or increase under the ASC payment system, depending on the particular service and the relative payment amounts under the MPFS compared to the ASC. While the ASC payment system bases most of its payment rates on hospital cost data used to set OPPS relative payment weights, services that are performed a majority of the time in a physician office are generally paid the lesser of the ASC amount according to the standard ASC ratesetting methodology or at the nonfacility practice expense based amount payable under the PFS. For those additional procedures that we proposed to designate as office-based in CY 2023, the beneficiary coinsurance amount under the ASC payment system generally will be no greater than the
As required by OMB Circular A-4 (available on the Office of Management and Budget website at:
We refer readers to the CY 2018 OPPS/ASC final rule (82 FR 59492 through 59494) for the previously estimated effects of changes to the Hospital Outpatient Quality Reporting (OQR) Program for the CY 2018, CY 2019, and CY 2021 payment determinations. Of the 3,356 hospitals that met eligibility requirements for the CY 2022 payment determination, we determined that 88 hospitals did not meet the requirements to receive the full annual Outpatient Department (OPD) fee schedule increase factor.
We do not anticipate that the CY 2023 Hospital OQR Program policies will impact the number of facilities that will receive payment reductions. In this final rule with comment period, we are finalizing to: (1) add an additional targeting criterion to the validation selection policy beginning with the CY 2023 reporting period; (2) align the patient encounter quarters with the calendar year beginning with the CY 2024 reporting period; and (3) change reporting for the OP-31 measure from mandatory to voluntary beginning with the CY 2025 payment determination.
As shown in Table 104 in section XXIII.B.4 (Collection of Information) of this final rule with comment period, we estimate a total information collection burden decrease for 3,350 OPPS hospitals of −325,847 hours at a cost of
In section XV of this final rule with comment period, we discuss our finalized policies affecting the Ambulatory Surgical Center Quality Reporting (ASCQR) Program. For the CY 2022 payment determination, of the 5,386 ASCs that met eligibility requirements, we determined that 290 ASCs did not meet the requirements to receive the full annual payment update under the ASC fee schedule.
In section XVI of this final rule with comment period, we are finalizing to change the reporting for the ASC-11 measure from mandatory to voluntary beginning with the CY 2023 reporting period. As shown in Table 105 in section XXIII.C.3.e (Collection of Information) of this final rule with comment period, we estimate a total information collection burden decrease for 4,646 ACSs of −72,107 hours at a cost of −$3,350,091 annually associated with our finalized policies and updated burden estimates for the CY 2025 reporting period/CY 2027 payment determination and subsequent years, compared to our currently approved information collection burden estimates. We refer readers to section XXIII.C of this final rule with comment period (information collection requirements) for a detailed discussion of the calculations estimating the changes to the information collection burden for submitting data to the ASCQR Program. We do not believe the finalized policy will have any further economic impact beyond information collection burden.
In section XVIII.A of this final rule with comment period, we discuss our finalized policies to provide payment to REHs, including the following finalized proposals: (1) the payment rate for an REH service would be calculated using the OPPS prospective payment rate for the equivalent covered OPD service increased by 5 percent; (2) the additional 5 percent payment for REH services, above the amount that would be paid for covered OPD services, would not be subject to a copayment; (3) for CY 2023, the monthly facility payment that each REH will receive would be determined by first calculating the total amount that CMS determines was paid to all CAHs under Title 18 of the Act in CY 2019 minus the estimated total amount that would have been paid under Title 18 to CAHs in CY 2019 if payment were made for inpatient hospital, outpatient hospital, and skilled nursing facility services under the applicable prospective payment systems for such services during CY 2019. The difference is divided by the number of CAHs enrolled in Medicare in CY 2019 to calculate the annual amount of this additional facility payment per individual REH. The annual payment amount is then divided by 12 to calculate the monthly facility payment that each REH will receive.
For CY 2023, we have determined there are 1,716 CAHs and rural subsection (d) hospitals with 50 or fewer beds that are eligible to convert to become an REH in the nation. A study
We developed a percentile analysis estimating how much revenue from rendering medical services a provider would lose or gain during CY 2023 if it decided to convert to a REH. We estimated that a provider in the 95th percentile of total annual REH medical service payment would receive an additional $2,089,700 in Medicare payments. We estimated that a provider in the 100th percentile of total annual REH medical service payment would receive an additional $3,362,560 in Medicare payments. Since a REH provider conversion rate of 4 percent falls between the 95th percentile and the 100th percentile of total annual REH medical service payment spending, we took the average of the additional spending for the 95th and 100th percentiles to determine the additional medical service spending for each provider converting to a REH in CY 2023 would be $2,726,130. Since we do not have any information on individual providers that may convert, nor do we have any information on characteristics of regions where REH conversions may be more likely, our best assumption regarding the impact of the REH policy is that providers who anticipate the most financial benefit from converting to an REH would be the most likely providers to convert.
Next, we determined the annual facility payment amount for a provider that converts to an REH in CY 2023. The finalized monthly facility payment for CY 2023 is $272,866. When this amount is multiplied by 12 months, the total annual facility payment is equal to $3,274,392. To determine the total impacts of the REH policy, we need to multiply the additional medical service spending amount of $2,726,130 by 68 providers which equals $185,376,820. Next, we multiply the total annual facility payment amount of $3,274,392 by 68 providers which equals $222, 658, 656. Finally, we combine the two amounts together, and we obtain a final estimate of the impacts of the REH provider policy of an additional $408,035,476 in Medicare payments.
The discussion of the physician self-referral law provisions related to REHs appears in section XVIII.E of this final rule with comment period. As discussed in section XVIII.A.4 of this final rule with comment period, we are finalizing our proposal to revise certain existing exceptions to the physician self-referral law applicable to compensation arrangements involving specific types of providers to make them applicable to compensation arrangements to which an REH is a party. Specifically, we are revising the exceptions for physician recruitment at § 411.357(e), obstetrical malpractice insurance subsidies at § 411.357(r), retention payments in underserved areas at § 411.357(t), electronic prescribing items and services at § 411.357(v), assistance to
The only impacts of our finalized REH enrollment policies are the information collection requirements associated with the facility's completion and submission of a Form CMS-855A change of information application to convert from a CAH or hospital (as defined in section 1886(d)(1)(B) of the Act) to an REH. These are addressed in detail in section XXIII.G of this final rule with comment period. As explained in that section, we estimate a Year 1 burden of 68 hours (68 applications × 1 hour per application) at a cost of $2,784 (based on an hourly wage estimate of $40.94).
In the CY 2020 OPPS/ASC final rule with comment period, we established a prior authorization process for certain hospital OPD services using our authority under section 1833(t)(2)(F) of the Act, which allows the Secretary to develop “a method for controlling unnecessary increases in the volume of covered OPD services” (84 FR 61142, November 12, 2019).
In accordance with § 419.83(b), we are finalizing our proposal to require prior authorization for a new service category: Facet joint interventions. We are adding the service category to § 419.83(a)(3). We are also requiring that the prior authorization process for the additional service category will be effective for dates of services on or after July 1, 2023. The addition of the service category is consistent with our authority under section 1833(t)(2)(F) of the Act and is based upon our determination that there has been an unnecessary increase in the volume of these services.
The overall economic impact on the health care sector to require prior authorization for the additional service category is dependent on the number of claims affected. Table 116, Overall Economic Impact on the Health Sector, lists an estimate of the overall economic impact on the health sector for the new service category. The values populating this table were obtained from the cost reflected in Table 117, Annual Private Sector Costs, and Table 118, Estimated Annual Administrative Costs to CMS. Together, Tables 117 and 118 combine to convey the overall economic cost impact to the health sector for the new service category, which is illustrated in Table 116. It should be noted that due to the July start date for prior authorization for the new service category, year one includes only 6 months of prior authorization requests.
Based on the estimate, the overall economic cost impact is approximately $13.3 million in the first year based on 6 months for the new service category. The 5-year impact is approximately $118.7 million, and the 10-year impact is approximately $250.4 million. The 5- and 10-year impacts account for year one, including only 6 months. Additional administrative paperwork costs to private sector providers and an increase in Medicare spending to conduct reviews combine to create the financial impact; however, this impact is offset by Medicare savings. Annually, we estimate an overall Medicare savings of $65.3 million. We believe there are likely to be other benefits that result from the prior authorization requirement for the new service category, though many of those benefits are difficult to quantify. For instance, we expect to see savings in the form of reduced unnecessary utilization, fraud, waste, and abuse, including a reduction in improper Medicare fee-for-service payments (we note that not all improper payments are fraudulent). We solicited public comments on the potential increased costs and benefits associated with this proposed provision for the new service category.
According to the RFA's use of the term, most suppliers and providers are small entities. Likewise, the vast majority of physician and nurse practitioner (NP) practices are considered small businesses according to the SBA's size standards of having total revenues of $10 million or less in any 1 year. While the economic costs and benefits are substantial in the aggregate, the economic impact on individual entities compliant with Medicare program coverage and utilization rules and regulations will be relatively small. We estimate that 90 to 95 percent of providers who provide these services are small entities under the RFA definition. The rationale behind requiring prior authorization is to control unnecessary increases in the volume of covered OPD services. The impact on providers not in compliance with Medicare coverage, coding, and payment rules and regulations could be significant, as the final rule with comment period will change the billing practices of those providers. We believe that the purpose of the statute and this rule is to avoid unnecessary increases in utilization of OPD services. Therefore,
We do not believe that this rule will significantly affect the number of legitimate claims submitted for the new service category. However, we do expect a decrease in the overall amount paid for the services resulting from a reduction in unnecessary utilization of the services requiring prior authorization.
We estimate that the private sector's per-case time burden attributed to submitting documentation and associated clerical activities in support of a prior authorization request for the additional service category will be equivalent to that of submitting documentation and clerical activities associated with prepayment review, which is 0.5 hours. We apply this time burden estimate to initial submissions and resubmissions.
CMS will incur additional costs associated with processing the prior authorization requests for the new service category. We use the range of potentially affected cases (submissions and resubmissions) and multiply it by $50, the estimated cost to review each request. The combined cost also includes other elements such as appeals, education, outreach, and system changes.
We expect a reduction in the utilization of the new Medicare OPD service category when such utilization does not comply with one or more of Medicare's coverage, coding, and payment rules. While there may be an associated burden on beneficiaries while they wait for the prior authorization decision; we are unable to quantify that burden. Although the rule permits utilization that is medically necessary, OPD services that are not medically necessary may still provide convenience or usefulness for beneficiaries; any rule-induced loss of such convenience or usefulness constitutes a cost of the rule that we lack data to quantify. Additionally, beneficiaries may have out-of-pocket costs for those services that are determined not to comply with Medicare requirements and thus, are not eligible for Medicare payment. We lack the data to quantify these costs as well.
There will be quantifiable benefits for this rule because we expect a reduction in the unnecessary utilization of the new Medicare OPD service category subject to prior authorization. It is difficult to project the exact decrease in unnecessary utilization; however, based on a 25 percent savings percentage, we estimate that for the first 6 months, there will be savings of $32.6 million overall. Annually, we estimate an overall gross savings of $65.3 million. These savings represent a Medicare benefit from more efficient use of health care resources while still maintaining the same health outcomes for necessary services. We will closely monitor utilization and billing practices. The expected benefits will also include changed billing practices that would also enhance the coordination of care for the beneficiary. For example, requiring prior authorization for the additional OPD services category will ensure that the primary care practitioner recommending the service and the facility collaborate more closely to provide the most appropriate OPD services to meet the needs of the beneficiary. The practitioner recommending the service would evaluate the beneficiary to determine what services are medically necessary based on the beneficiary's condition. This would require the facility to collaborate closely with the practitioner early on in the process to ensure the services are truly necessary and meet all requirements and that their supporting documentation is complete and correct. Improper payments made because the practitioner did not evaluate the patient or the patient does not meet the Medicare requirements will likely be reduced by the requirement that a provider submits clinical documentation created as part of its prior authorization request.
This final rule with comment period addresses the CoPs required for REH designation, which in accordance with the statute, may be sought by CAHs and small rural hospitals. It also finalizes several new CAH requirements that we believe are appropriate under the existing program as well as to REHs. However, note that the costs of these CAH requirements are not attributable to the new REH program (except where such costs are experienced by entities that remain open due to the REH option but would have closed otherwise). The baseline for the estimates of REH costs is the status quo had the new program had not been created. The final CoPs for the new REH provider type are similar to those already met by the facilities that will potentially convert to REH status, and for collection of information purposes we did not subtract offsetting savings from providers who would already meet these standards and who decide to make little change when updating their status.
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other healthcare providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $8.0 million to $41.5 million in any 1 year. Individuals and states are not included in the definition of a small entity. We estimate that almost all of the new REH facilities, and the great majority of CAHs, are or would be small entities on the basis of legal status, revenues, or both. The North American Industry Classification System Code for the converting hospitals is 622110 (General Medical and Surgical Hospitals), and for the REHs to which they convert the closest Code is 621493 (Freestanding Ambulatory Surgical and Emergency Centers). HHS uses an increase in costs or decrease in revenues of more than 3 percent as its threshold for “significant economic impact”. Our collection of information estimates are that the 68 facilities converting to REH status (as estimated by the NC RHRP study referenced in the COI section) would face average annual costs of about $22,600 each (68 × $22,600 = $1,537,000 (COI burden estimate)). The North Carolina Rural Health Research Program estimated that the 68 hospitals it thought most likely to convert to REH status had average patient revenues of $7.3 million. For these facilities, the 3 percent threshold would be about $219,000, almost ten times our estimated cost of information collection. The CLA study does not present average facility revenues. However, we note that while it reaches a broad range of conversion estimates, we do not believe that it would have reached different conclusions had it presented such calculations. These relationships between revenues and costs would not be substantially different if the number of conversions was substantially fewer or substantially greater in number. More importantly, these facilities would be converting voluntarily to the new program. We expect that the costs any facility faces would be less than the anticipated gains of conversion, or it would not convert. This positive relationship of expected gains from conversion compared to current costs and revenues is explicit in the CLA modeling. The effects of the final policy changes on CAHs are even smaller. The average annual cost per CAH for the new Conditions of Participation would
If regulations impose administrative costs on private entities, such as the time needed to read and interpret this rule, we should estimate the cost associated with regulatory review. Due to the uncertainty involved with accurately quantifying the number of entities that will review the rule, we assumed that the number of commenters on this year's proposed rule will be the number of reviewers of this final rule. We acknowledge that this assumption may understate or overstate the costs of reviewing this rule. It is possible that not all commenters reviewed this year's proposed rule in detail, and it is also possible that some reviewers choose not to comment on the proposed rule. For these reasons, we thought that the number of commenters on the CY 2023 OPPS/ASC proposed rule would be a fair estimate of the number of reviewers of this final rule.
We also recognize that different types of entities are, in many cases, affected by mutually exclusive sections of the proposed rule, and therefore, for the purposes of our estimate, we assume that each reviewer reads approximately 50 percent of the rule.
Using the wage information from the BLS for medical and health service managers (Code 11-9111), we estimated that the cost of reviewing this rule is $115.22 per hour, including overhead and fringe benefits (
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, many hospitals are considered small businesses either by the Small Business Administration's size standards with total revenues of $41.5 million or less in any single year or by the hospital's not-for-profit status. Most ASCs and most CMHCs are considered small businesses with total revenues of $16.5 million or less in any single year. For details, we refer readers to the Small Business Administration's “Table of Size Standards” at
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a metropolitan statistical area and has 100 or fewer beds. We estimate that this final rule with comment period will increase payments to small rural hospitals by approximately 2.5 percent. Therefore, it should not have a significant impact on the approximately 549 small rural hospitals. We note that the estimated payment impact for any category of small entity will depend on both the services that they provide as well as the payment policies and/or payment systems that may apply to them. Therefore, the most applicable estimated impact may be based on the specialty, provider type, or payment system.
The analysis above, together with the remainder of this preamble, provides a regulatory flexibility analysis and a regulatory impact analysis. We note that the policies established in this rule apply more broadly to OPPS providers and do not specifically focus on small rural hospitals. As a result, the impact on those providers may depend more significantly on their case mix of services provided, since the broader impact on the hospital category is more dependent on the OPD update factor, as indicated in the impact table.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2022, that threshold level is currently approximately $165 million. This final rule with comment period does not mandate any requirements for State, local, or tribal governments, or for the private sector.
The changes we are finalizing in this final rule with comment period will affect all classes of hospitals paid under the OPPS as well as affect both CMHCs and ASCs. We estimate that most classes of hospitals paid under the OPPS would experience a modest increase or a minimal decrease in payment for services furnished under the OPPS in CY 2023. Table 110 demonstrates the estimated distributional impact of the OPPS budget neutrality requirements that will result in a 4.5 percent increase in payments for all services paid under the OPPS in CY 2023, after considering all of the changes to APC reconfiguration and recalibration, as well as the OPD fee schedule increase factor, wage index changes, including the frontier State wage index adjustment, estimated payment for outliers, changes to the pass-through payment estimate, exception for rural SCHs from the clinic visit policy for services furnished at off campus PBDs, and adjustment for the additional resource costs of acquiring domestic NIOSH-approved surgical N95 respirators. However, some classes of providers that are paid under the OPPS will experience more significant gains or losses in OPPS payments in CY 2023.
The updates we are making to the ASC payment system for CY 2023 will
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct costs on State and local governments, preempts State law, or otherwise has federalism implications. We have examined the OPPS and ASC provisions included in this final rule with comment period in accordance with Executive Order 13132, Federalism, and have determined that they will not have a substantial direct effect on State, local, or tribal governments, preempt State law, or otherwise have a federalism implication. As reflected in Table 110 of this final rule with comment period, we estimate that OPPS payments to governmental hospitals (including State and local governmental hospitals) will increase by 5.9 percent under this final rule with comment period. While we do not know the number of ASCs or CMHCs with government ownership, we anticipate that it is small. The analyses we have provided in this section of this final rule with comment period, in conjunction with the remainder of this document, demonstrate that this final rule with comment period is consistent with the regulatory philosophy and principles identified in Executive Order 12866, the RFA, and section 1102(b) of the Act.
This final rule with comment period will affect payments to a substantial number of small rural hospitals and a small number of rural ASCs, as well as other classes of hospitals, CMHCs, and ASCs, and some effects may be significant. However, as noted in section XXIII of this final rule with comment period, this rule should not have a significant effect on small rural hospitals.
This final regulation is subject to the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801
Chiquita Brooks-LaSure, Administrator of the Centers for Medicare & Medicaid Services, approved this document on October 26, 2022.
Administrative practice and procedure, Health facilities, Health professions, Kidney diseases, Medicare, Reporting and recordkeeping, Rural areas, X-rays.
Diseases, Health facilities, Health professions, Laboratories, Medicare, Reporting and recordkeeping requirements, Rural areas, X-rays.
Diseases, Medicare, Reporting and recordkeeping requirements.
Administrative practice and procedure, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements.
Diseases, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements.
Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.
Hospitals, Medicare, Reporting and recordkeeping requirements.
Emergency medical services, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.
Grant programs—health, Health facilities, Incorporation by reference, Medicaid, Privacy, Reporting and recordkeeping requirements.
Health facilities, Medicare, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services amend 42 CFR chapter IV as set forth below:
42 U.S.C. 263a, 405(a), 1302, 1320b-12, 1395x, 1395y(a), 1395ff, 1395hh, 1395kk, 1395rr, and 1395ww(k).
(b) * * *
(2) * * *
(ii) Some of these nonprovider entities are required to file periodic cost reports and are paid on the basis of information furnished in these reports. Except as provided at § 413.420(g) of this chapter, these nonprovider entities may not obtain a contractor hearing or a Board hearing under section 1878 of the Act or this subpart.
42 U.S.C. 1302, 1395m, 1395hh, 1395rr, and 1395ddd.
The revisions read as follows:
(a) * * *
(1) * * *
(iii) In the hospital or CAH or in a department of the hospital or CAH, as defined in § 413.65 of this subchapter, except for mental health services furnished to beneficiaries in their homes through the use of communication technology;
(iv) * * *
(A) For services furnished in the hospital or CAH, or in an outpatient department of the hospital or CAH, both on and off-campus, as defined in § 413.65 of this subchapter, or through the use of communication technology for mental health services, general supervision means the procedure is furnished under the physician's or nonphysician practitioner's overall
(B) Certain therapeutic services and supplies may be assigned either direct supervision or personal supervision.
(
(
(e) Medicare Part B makes payment under section 1833(t) of the Act for diagnostic services furnished by or under arrangements made by the participating hospital only when the diagnostic services are furnished under one of the three levels of supervision (as defined in paragraphs (e)(1) through (3) of this section) specified by CMS for the particular service by a physician or, to the extent that they are authorized to do so under their scope of practice and applicable State law, by a nonphysician practitioner (physician assistant, nurse practitioner, clinical nurse specialist, certified nurse-midwife or certified registered nurse anesthetist).
(1)
(2)
(ii) For services furnished under arrangement in nonhospital locations, “direct supervision” means the physician or nonphysician practitioner must be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the procedure. It does not mean that the physician or nonphysician practitioner must be present in the room when the procedure is performed.
(iii) Until the later of the end of the calendar year in which the PHE as defined in § 400.200 of this chapter ends or December 31, 2021, the presence of the physician or nonphysician practitioner under paragraphs (e)(2)(i) and (ii) of this section includes virtual presence through audio/video real-time communications technology (excluding audio-only).
(3) Personal supervision. Personal supervision means the physician or nonphysician practitioner must be in attendance in the room during the performance of the procedure.
(f) * * *
(1) From any point of origin to the nearest hospital, CAH, rural emergency hospital (REH), or SNF that is capable of furnishing the required level and type of care for the beneficiary's illness or injury. The hospital or CAH or REH must have available the type of physician or physician specialist needed to treat the beneficiary's condition.
(2) From a hospital, CAH, REH, or SNF to the beneficiary's home.
(5) During a Public Health Emergency, as defined in § 400.200 of this chapter, a ground ambulance transport from any point of origin to a destination that is equipped to treat the condition of the patient consistent with any applicable state or local Emergency Medical Services protocol that governs the destination location. Such destinations include, but are not limited to, alternative sites determined to be part of a hospital, critical access hospital, REH (effective January 1, 2023), or skilled nursing facility, community mental health centers, federally qualified health centers, rural health clinics, physician offices, urgent care facilities, ambulatory surgical centers, any location furnishing dialysis services outside of an ESRD facility when an ESRD facility is not available, and the beneficiary's home.
42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, and 1395nn.
Rural area means an area that is not an urban area as defined at § 412.64(b) of this chapter.
Rural emergency hospital has the meaning set forth in section 1861(kkk)(2) of the Act and § 419.91 of this chapter.
(e) * * *
(6)(i) This paragraph (e) applies to remuneration provided by a federally qualified health center, rural health
(ii) The “geographic area served” by a federally qualified health center, rural health clinic, or rural emergency hospital is the area composed of the lowest number of contiguous or noncontiguous zip codes from which the federally qualified health center, rural health clinic, or rural emergency hospital draws at least 90 percent of its patients, as determined on an encounter basis. The geographic area served by the federally qualified health center, rural health clinic, or rural emergency hospital may include one or more zip codes from which the federally qualified health center, rural health clinic, or rural emergency hospital draws no patients, provided that such zip codes are entirely surrounded by zip codes in the geographic area described in the preceding sentence from which the federally qualified health center, rural health clinic, or rural emergency hospital draws at least 90 percent of its patients.
(r) * * *
(2) A payment from a hospital, federally qualified health center, rural health clinic, or rural emergency hospital that is used to pay for some or all of the costs of malpractice insurance premiums for a physician who engages in obstetrical practice as a routine part of his or her medical practice, if all of the following conditions are met:
(ii) The arrangement is set out in writing, is signed by the physician and the hospital, federally qualified health center, rural health clinic, or rural emergency hospital providing the payment, and specifies the payment to be made by the hospital, federally qualified health center, rural health clinic, or rural emergency hospital and the terms under which the payment is to be provided.
(iii) The arrangement is not conditioned on the physician's referral of patients to the hospital, federally qualified health center, rural health clinic, or rural emergency hospital providing the payment.
(iv) The hospital, federally qualified health center, rural health clinic, or rural emergency hospital does not determine the amount of the payment in any manner that takes into account the volume or value of referrals by the physician or any other business generated between the parties.
(v) The physician is allowed to establish staff privileges at any hospital(s), federally qualified health center(s), rural health clinic(s), or rural emergency hospital(s) and to refer business to any other entities (except as referrals may be restricted under an employment arrangement or services arrangement that complies with § 411.354(d)(4)).
(t) * * *
(5) Application to other entities. This paragraph (t) applies to remuneration provided by a federally qualified health center, rural health clinic, or rural emergency hospital in the same manner as it applies to remuneration provided by a hospital. For purposes of this paragraph (t), the geographic area served by a federally qualified health center, rural health clinic, or rural emergency hospital has the meaning set forth in paragraph (e)(6)(ii) of this section.
(v) * * *
(1) * * *
(i) Hospital or rural emergency hospital to a physician who is a member of its medical staff;
(x) * * *
(7)(i) This paragraph (x) may be used by a hospital, federally qualified health center, rural health clinic, or rural emergency hospital only once every 3 years with respect to the same referring physician.
(ii) Paragraph (x)(7)(i) of this section does not apply to remuneration provided by a hospital, federally qualified health center, rural health clinic, or rural emergency hospital to a physician to compensate a nonphysician practitioner to provide NPP patient care services if—
(A) The nonphysician practitioner is replacing a nonphysician practitioner who terminated his or her employment or contractual arrangement to provide NPP patient care services with the physician (or the physician organization in whose shoes the physician stands) within 1 year of the commencement of the employment or contractual arrangement; and
(B) The remuneration provided to the physician is provided during a period that does not exceed 2 consecutive years as measured from the commencement of the compensation arrangement between the nonphysician practitioner who is being replaced and the physician (or the physician organization in whose shoes the physician stands).
(8)(i) This paragraph (x) applies to remuneration provided by a federally qualified health center, rural health clinic, or rural emergency hospital in the same manner as it applies to remuneration provided by a hospital.
(ii) The “geographic area served” by a federally qualified health center, rural health clinic, or rural emergency hospital has the meaning set forth in paragraph (e)(6)(ii) of this section.
(y) * * *
(10) This paragraph (y) applies to remuneration provided by a rural emergency hospital in the same manner as it applies to remuneration provided by a hospital.
42 U.S.C. 1302 and 1395hh.
(a) * * *
(1) * * *
(iv) Additional payments are made for outlier cases, bad debts, indirect medical education costs, for serving a disproportionate share of low-income patients, and for the additional resource costs of domestic National Institute for Occupational Safety and Health approved surgical N95 respirators.
(f) * * *
(10) A payment adjustment for the additional resource costs of domestic National Institute for Occupational Safety and Health approved surgical N95 respirators as specified in § 412.113.
(b) Costs of kidney acquisition. Kidney acquisition costs include allowable costs incurred in the acquisition of a kidney from a living or a deceased donor by the hospital, or from a deceased donor by an organ procurement organization. These costs are listed in § 413.402(b) of this chapter.
(f) Additional resource costs of domestic National Institute for Occupational Safety and Health approved surgical N95 respirators. (1) For cost reporting periods beginning on or after January 1, 2023, a payment adjustment to a hospital for the additional resource costs of domestic National Institute for Occupational Safety and Health approved surgical N95 respirators is made as described in paragraph (f)(2) of this section.
(2) The payment adjustment is based on the estimated difference in the reasonable cost incurred by the hospital for domestic National Institute for Occupational Safety and Health approved surgical N95 respirators purchased during the cost reporting period as compared to other National Institute for Occupational Safety and Health approved surgical N95 respirators purchased during the cost reporting period.
(c) Frequency of publication and data used. The Overall Star Rating are published once annually using data publicly reported on Hospital Compare or its successor website from a quarter within the previous 12 months.
42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 1395m, 1395x(v), 1395x(kkk), 1395hh, 1395rr, 1395tt, and 1395ww.
(a) * * *
(1) * * *
(ii) * * *
(L) Section 1834(x) of the Act authorizes payment for services furnished by rural emergency hospitals (REHs) and establishes the payment methodology.
(2) * * *
(i) Hospitals, critical access hospitals (CAHs), and rural emergency hospitals (REHs);
(c) * * *
(2) * * *
(vii) Services furnished by a rural emergency hospital (REH). Services furnished by a rural emergency hospital are subject to the payment methodology set forth in part 419, subpart J, of this chapter.
(f) * * *
(4) * * *
(i) As used in this paragraph (f)(4), “provider” means a hospital, rural emergency hospital, skilled nursing facility, home health agency, hospice, organ procurement organization, histocompatibility laboratory, rural health clinic, federally qualified health center, community mental health center, or end-stage renal disease facility.
(ii) Effective for cost reporting periods beginning on or after October 1, 1989, for hospitals; cost reporting periods ending on or after February 1, 1997, for skilled nursing facilities and home health agencies; cost reporting periods ending on or after December 31, 2004, for hospices, and end-stage renal disease facilities; cost reporting periods ending on or after March 31, 2005, for organ procurement organizations, histocompatibility laboratories, rural health clinics, federally qualified health centers, and community mental health centers; and cost reporting periods beginning on or after January 1, 2023, for rural emergency hospitals, a provider is required to submit cost reports in a standardized electronic format. The provider's electronic program must be capable of producing the CMS standardized output file in a form that can be read by the contractor's automated system. This electronic file, which must contain the input data required to complete the cost report and to pass specified edits, must be forwarded to the contractor for processing through its system.
(iv)(A) Effective as specified in paragraphs (f)(4)(iv)(A)(1) through (5) of this section and except as provided in paragraph (f)(4)(iv)(C) of this section, a provider must submit a hard copy of a settlement summary, if applicable, which is a statement of certain worksheet totals found within the electronic file, and the certification statement described in paragraph (f)(4)(iv)(B) of this section signed by its administrator or chief financial officer certifying the accuracy of the electronic file or the manually prepared cost report.
(
(
(
(
(5) For rural emergency hospitals, effective for cost reporting periods beginning on or after January 1, 2023.
(b) * * *
(4) * * *
(ii) Section 413.420, Payment to independent organ procurement organizations and to histocompatibility laboratories for kidney acquisition costs;
(a)
(b) * * *
(3) Other costs associated with excising organs, such as general routine and special care services (for example, intensive care unit or critical care unit services), provided to the living or deceased donor.
(4) Operating room and other inpatient ancillary services applicable to the living or deceased donor.
(7) Surgeons' fees for excising deceased organs (currently limited to $1,250 for kidneys).
(8) * * *
(i) Excised organ to the TH; and
(ii) Deceased donor to procure organs when it is necessary to preserve clinical outcomes or to avoid loss of potentially transplantable organs.
(d) * * *
(2) * * *
(ii) Transportation costs of the deceased donor after organ procurement for funeral services or for burial.
(a) * * *
(2) The SAC represents the average of the total organ acquisition costs associated with procuring either deceased donor organs or living donor organs, by organ type.
(b) * * *
(2) When a TH/HOPO furnishes an organ to another TH or IOPO, it must bill the receiving TH or IOPO its SAC by organ type, or the hospital's standard departmental charges that are reduced to cost.
(3) A TH must establish SACs for living donor organs. A TH/HOPO must establish SACs for deceased donor organs.
(i)
(B)
(C)
(i) By estimating the reasonable and necessary organ acquisition costs it expects to incur for services furnished to living donors, and pre-admission services furnished to recipients of living donor organs during the hospital's cost reporting period.
(ii) By dividing the estimated amount described in paragraph (b)(3)(i)(C)(1)(i) of this section by the projected number of usable living donor organs to be procured by the TH during the TH's cost reporting period.
(2)
(i) By using the TH's actual organ acquisition costs for the living donor organ type from the prior year's Medicare cost report, adjusted for any changes in the current year.
(ii) Dividing the costs in paragraph (b)(3)(i)(C)(2)(i) of this section by the actual number of usable living donor organs procured by the TH during that prior cost reporting period.
(ii) Deceased donor SAC for TH/HOPOs—(A) Definition. The deceased donor SAC is an average cost that a TH/HOPO incurs to procure a deceased donor organ.
(B) Calculating the deceased donor SAC—(1) Initial deceased donor SAC. A TH/HOPO calculates its initial deceased donor SAC for each deceased donor organ type as follows:
(i) By estimating the reasonable and necessary costs it expects to incur to procure deceased donor organs, combined with the expected costs of acquiring deceased donor organs from OPOs or other THs.
(ii) By dividing the estimated amount described in paragraph (b)(3)(ii)(B)(1)(i) of this section by the projected number of usable deceased donor organs to be procured by the TH/HOPO within the TH's cost reporting period.
(2)
(i) By using the TH's actual organ acquisition costs for the deceased donor organ type from the prior year's Medicare cost report, adjusted for any changes in the current year.
(ii) By dividing the costs in paragraph (b)(3)(ii)(B)(2)(i) of this section by the actual number of usable deceased donor organs procured by the TH/HOPO during that prior cost reporting period.
(C) Costs to develop the deceased donor SAC. Costs that may be used to develop the deceased donor SAC include, but are not limited to the following:
(1) Costs of organs acquired from other THs or OPOs.
(2) Costs of transportation as specified in § 413.402(b)(8).
(3) Surgeons' fees for excising deceased donor organs (currently limited to $1,250 for kidneys).
(c) * * *
(1) * * *
(i) Estimating the reasonable and necessary costs it expects to incur for services furnished to procure deceased donor non-renal organs during the IOPO's cost reporting period; and
(ii) Dividing the amount estimated in paragraph (c)(1)(i) of this section by the projected number of deceased donor non-renal organs the IOPO expects to procure within its cost reporting period.
(2) * * *
(i) General. An IOPO's contractor establishes the kidney SAC based on an estimate of,
initial year projected or subsequent years' actual, reasonable and necessary costs the IOPO expects to incur to procure deceased donor kidneys during the IOPO's cost reporting period, divided by the, initial year projected or subsequent years' actual, number of
(ii) Initial year. The contractor develops the IOPO's initial kidney SAC based on the
IOPO's budget information.
(iii) Subsequent years. The contractor computes the kidney SAC for subsequent years using the IOPO's costs related to kidney acquisition that were incurred in the prior cost reporting period and dividing those costs by the number of usable deceased donor kidneys procured during that cost reporting period. The kidney SAC amount is the interim payment made by the TH or other OPO to the IOPO, as set forth in § 413.420(d)(1).
(iv) SAC adjustments. The IOPO's contractor may adjust the kidney SAC during the year, if necessary, for cost changes.
(3) Billing SACs for organs generally. When an IOPO obtains an organ from another IOPO, the receiving IOPO is responsible for paying the procuring IOPO's SAC. The receiving IOPO uses its SAC for each organ type and not the procuring IOPO's SAC when billing the TH receiving the organ.
(a)
(2) OPOs and THs must identify the costs associated with the recovered and unrecovered organs and apportion those costs to the appropriate cost centers by organ type. These costs include the costs associated with an organ intended for transplant, but subsequently determined unsuitable for transplant and furnished for research.
(3) An organ intended for transplant but subsequently determined unsuitable for transplant and instead furnished for research is not counted as a Medicare usable organ or as a total usable organ in the ratio used to calculate Medicare's share of organ acquisition costs.
(4) Subject to paragraph (a)(4)(iii) of this section, OPOs and THs must reduce total organ acquisition costs, when the organ is intended for transplant but determined unsuitable for transplant and instead furnished for research, as follows:
(i) By deducting the costs to furnish organs for research from total organ acquisition costs; or
(ii) By offsetting the total organ acquisition costs by the revenue received for these organs.
(iii) In no event may the reduction in total organ acquisition costs as a result of application of paragraph (a)(4) of this section exceed the costs incurred to furnish organs for research.
(5) When the costs to furnish organs for research are not included in total organ acquisition costs but are included in a non-reimbursable cost center, no offset is necessary.
(b)
prior to the time the donor enters the hospital's operating room for surgical removal of the organ.
(2) Medicare does not share in the acquisition costs of an organ intended for research and
costs to procure these organs must not be included in organ acquisition costs (except pancreata for islet cell transplants as specified in § 413.406(a)).
(3) An organ intended for research is not counted as a Medicare usable organ or as a total usable organ in the ratio used to calculate Medicare's share of organ acquisition costs (except pancreata for islet cell transplants as specified in § 413.406(a)).
(c)
(1) En bloc lungs or en bloc kidneys procured and transplanted en bloc (two organs transplanted as one unit) as one total usable organ. En bloc organs transplanted into a Medicare beneficiary count as one Medicare usable organ or one Medicare usable kidney.
(2) En bloc lungs and en bloc kidneys procured en bloc but separated and transplanted into two different recipients as two total usable organs. For each organ transplanted into a Medicare beneficiary, count each as one Medicare usable organ or one Medicare usable kidney.
(d)
(2) OPOs and THs include the cost to procure unusable organs, as described in paragraph (d)(1) of this section, in total organ acquisition costs reported on their Medicare cost report.
(a)
(b)
(c)
(1) To determine whether Medicare has a secondary payer liability for the organ acquisition costs, it is necessary for the TH that performs the transplant to submit a bill to its contractor and to compare the total cost of the transplant, including the transplant DRG amount and the organ acquisition costs, to the payment received from the primary payer.
(2) If the payment from the primary payer is greater than the cost of the transplant DRG and the organ acquisition costs, there is no Medicare liability and the TH must not count the organ as a Medicare usable organ.
(3) * * *
(i) The TH must pro-rate the payment from the primary payer between the transplant DRG payment and the organ acquisition payment.
(ii) Only the TH that performs the transplant counts the organ as a Medicare usable organ.
(a) Initial living donor evaluations. When a recipient and donor elect to participate in a kidney paired exchange, the costs of the initial living donor evaluations are incurred by the originally intended recipient's TH, regardless of whether the living donor actually donates to their originally intended recipient, a kidney paired exchange recipient, or does not donate at all.
(b)
(c)
(2)(i) The donor's TH bills the recipient's TH.
(ii) The donor's TH bills its charges reduced to cost, or bills its applicable kidney SAC for the reasonable costs associated with procuring, packaging, and transporting the kidney.
(3) The donor's TH records the costs described in paragraph (c)(2)(ii) of this section on its Medicare cost report as kidney acquisition costs and offsets any payments received from the recipient's TH against its kidney acquisition costs.
(4) The recipient's TH records as part of its kidney acquisition costs -
(i) The amounts billed by the donor's TH for the reasonable costs associated with procuring, packaging, and transporting the organ; and
(ii) Any additional testing performed and billed by the donor's TH.
(d) Donor's procurement occurs at recipient TH. In a kidney-paired exchange—
(1) When a donor's TH does not procure a kidney, but the donor travels to the recipient's TH for the organ procurement, the reasonable costs associated with the organ procurement are included on the Medicare cost report of the recipient's TH; and
(a)
(1) There is consent to donate; and
(2) Declaration of death has been made, or if a declaration of death has not been made, death is imminent and it is necessary that the services be provided prior to declaration of death in order to avoid compromising the viability of the organs for transplant.
(b)
(a)
(2) Services furnished by IOPOs and histocompatibility laboratories, that have an agreement with the Secretary in accordance with paragraph (c) of this section, are paid directly by the TH using a kidney SAC (for an IOPO) or contractor-established rates (for a histocompatibility laboratory). (The reasonable costs of services furnished by IOPOs or laboratories are reimbursed in accordance with the principles contained in §§ 413.60 and 413.64.)
(c) * * *
(1) * * *
(ii) To permit CMS to designate a contractor to determine the interim reimbursement rate, payable by the THs for services provided by the IOPO or laboratory, and to determine Medicare's reasonable cost based upon the cost report filed by the IOPO or laboratory.
* * *
(iv) To pay to CMS amounts that have been paid by CMS to THs and that are determined to be in excess of the reasonable cost of the services provided by the IOPO or laboratory.
(v) Not to charge any individual for items or services for which that individual is entitled to have payment made under section 1881 of the Act.
(d) Interim reimbursement. (1) THs with approved kidney transplant programs pay the IOPO or histocompatibility laboratory for their pre-transplantation services on the basis of an interim rate established by the contractor for that IOPO or laboratory.
(2) The interim rate is a kidney SAC or contractor established rates, based on costs associated with procuring a kidney for transplantation, incurred by an IOPO or laboratory respectively, during its previous fiscal year. If there is not adequate cost data to determine the initial interim rate, the contractor determines it according to the IOPO's or laboratory's estimate of its projected costs for the fiscal year.
(3) Payments made by THs on the basis of interim rates are reconciled directly with the IOPO or laboratory after the close of its fiscal year, in accordance with paragraph (e) of this section.
(4) Information on the interim rate for all IOPOs and histocompatibility laboratories must be disseminated to all THs and contractors.
(e) * * *
(2) * * *
(i)
(ii)
42 U.S.C. 1302 and 1395hh.
(d) * * *
(1)
(h)
(i) Eligible for a comprehensive APC (C-APC) complexity adjustment under the OPPS; and
(ii) Comprised of a separately payable surgical procedure, that is listed on the ASC Covered Procedures list (§ 416.166), and one or more packaged add-on codes that are listed on the ASC covered procedures or ancillary services lists (§ 416.164(b)).
(2)
(ii) For primary procedures assigned device-intensive status that are a component of a code combination that is eligible for payment under paragraph (h)(2) of this section, the primary procedure of the code combination retains its device-intensive status, and—
(A) The device portion is equivalent to the device portion of the device-intensive APC under the OPPS (§ 419.44(b) of this subchapter); and
(B) The non-device portion is calculated in accordance with the methodology specified in § 416.171(a).
(a)
(1) The drug is approved under a new drug application under section 505(c) of the Federal Food, Drug, and Cosmetic Act (FDCA), under an abbreviated new drug application under section 505(j), or, in the case of a biological product, is licensed under section 351 of the Public Health Service Act. The product has an FDA approved indication for pain management or analgesia.
(2) The per-day cost of the drug or biological estimated by CMS for the year exceeds the OPPS drug packaging threshold set for such year through notice and comment rulemaking.
(3) The drug or biological does not have transitional pass-through payment status under § 419.64 of this subchapter. In the case where a drug or biological otherwise meets the requirements under this section and has transitional pass-through payment status that expires during the calendar year, the drug or biological will qualify for separate payment as specified in this paragraph (a) during such calendar year on the first day of the next calendar year quarter following the expiration of its pass-through status.
(4) The drug or biological is not already separately payable in the OPPS or ASC payment system under a policy other than the one specified in this section.
42 U.S.C. 1302, 1395l(t), and 1395hh.
(j)
(2)
(3)
(f) * * *
(3) * * *
(iv) Any hospital that passed validation in the previous year but had a two-tailed confidence interval that included 75 percent; or
(v) 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 extraordinary circumstance exception (ECE) for one or more quarters.
(a)
(1) The Medicare coverage IDE study criteria in § 405.212 of this chapter are met; and
(2) A new or revised code is necessary to preserve the scientific validity of such a study, such as by preventing the unblinding of the study.
(b)
(1) 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 § 405.201 of this chapter; and
(2) Calculate the single packaged payment rate for the HCPCS code based on the average resources utilized for each study participant, including the frequency with which the investigational device is used in the study population.
(a) * * *
(3) The Facet Joint Interventions service category requires prior authorization beginning for service dates on or after July 1, 2023.
(b)
(2) Technical updates to the list of services, such as changes to the name of the service or Current Procedural Terminology (CPT) code, will be published on the CMS website.
(a)
(b)
As used in this subpart—
(a)
(2)
(b)
(1)
(i) The total amount that the Secretary determines was paid by the Medicare program and from beneficiary copayments to all critical access hospitals in calendar year 2019; minus
(ii) The estimated total amount that the Secretary determines would have been paid by the Medicare program and from beneficiary copayments to critical access hospitals in calendar year 2019 if payment were made for inpatient hospital, outpatient hospital, and skilled nursing facility services under the applicable prospective payment systems for such services during calendar year 2019; divided by
(iii) The total number of critical access hospitals enrolled in Medicare in calendar year 2019.
(2)
(3)
(c)
(1)
(2)
(a) Items and services furnished by an off-campus provider-based department of an REH, as defined in paragraph (b) of this section, are not applicable items and services under sections
(1) REH services furnished by an off-campus provider-based department of an REH are paid as described in § 419.92(a)(1).
(2) Services that do not meet the definition of REH services under § 419.91 that are furnished by an off-campus provider-based department of an REH are paid as described under § 419.92(c).
(b) For the purpose of this section, “off-campus provider-based department of an REH” means a “department of a provider” (as defined at § 413.65(a)(2) of this chapter) that is not located on the campus (as defined in § 413.65(a)(2) of this chapter) or within the distance described in such definition from a “remote location of a hospital” (as defined in § 413.65(a)(2) of this chapter) that meets the requirements for provider-based status under § 413.65 of this chapter.
There is no administrative or judicial review under section 1869 of the Act, section 1878 of the Act, or otherwise of the following:
(a) The determination of whether a rural emergency hospital meets the requirements of this subpart.
(b) The determination of payment amounts under this subpart.
(c) The requirements established by this subpart.
42 U.S.C. 1302 and 1395hh.
(a) * * *
(1) * * *
(viii) Hospitals, including critical access hospitals, rural emergency hospitals, Department of Veterans Affairs hospitals, and other federally owned hospital facilities.
(a) A rural emergency hospital (as defined in § 485.502 of this chapter) must comply with all applicable provisions in this subpart in order to enroll and maintain enrollment in Medicare.
(b) A provider that was enrolled in Medicare as of December 27, 2020, as a critical access hospital or a hospital (as defined in section 1886(d)(1)(B) of the Social Security Act) with not more than 50 beds located in a county (or equivalent unit of local government) in a rural area (as defined in section 1886(d)(2)(D) of the Social Security Act) (or treated as being located in a rural area pursuant to section 1886(d)(8)(E) of the Social Security Act) converts its existing enrollment to that of a rural emergency hospital (as defined in § 485.502 of this chapter) via a Form CMS-855A change of information application per § 424.516 rather than a Form CMS-855A initial enrollment application.
42 U.S.C. 1302 and 1395(hh).
Section 1861(kkk) of the Act requires the Secretary to establish the conditions REHs must meet in order to participate in the Medicare program and which are considered necessary to ensure the health and safety of patients receiving services at these entities.
As used in this subpart,
Participation as an REH is limited to facilities that—
(a) Meet the definition in § 485.502.
(b) Have in effect a provider agreement as defined at § 489.3 of this chapter to provide services.
(c) Meet the conditions of participation set out in this subpart.
CMS certifies a facility as an REH if the facility was, as of December 27, 2020—
(a) A critical access hospital; or
(b) A hospital as defined in section 1886(d)(1)(B) of the Act with not more than 50 beds located in a county (or equivalent unit of local government)
(c) A hospital as defined in section 1881(d)(1)(B) of the Act with not more than 50 beds that was treated as being located in a rural area that has had an active reclassification from urban to rural status as specified in § 412.103 of this chapter as of December 27, 2020.
(a) The REH must be in compliance with applicable Federal laws related to the health and safety of patients.
(b) The REH must be located in a state that provides for the licensing of such hospitals under state or applicable local law; and is
(1) Licensed in the state as an REH; or
(2) Approved as meeting standards for licensing established by the agency of the state or locality responsible for licensing hospitals.
(c) The REH must assure that personnel are licensed or meet other applicable standards that are required by state or local laws to provide services within the applicable scope of practice.
There must be an effective governing body, or responsible individual or individuals, that is legally responsible for the conduct of the REH. If an REH does not have an organized governing body, the person or persons legally responsible for the conduct of the REH must carry out the functions specified in this subpart that pertain to the governing body.
(a)
(1) Determine, in accordance with state law, which categories of practitioners are eligible candidates for appointment to the medical staff.
(2) Appoint members of the medical staff after considering the recommendations of the existing members of the medical staff.
(3) Ensure that the medical staff has bylaws.
(4) Approve medical staff bylaws and other medical staff rules and regulations.
(5) Ensure that the medical staff is accountable to the governing body for the quality of care provided to patients.
(6) Ensure the criteria for selection are individual character, competence, training, experience, and judgment.
(i) Members of the medical staff must be legally and professionally qualified for the positions to which they are appointed and for the performance of privileges granted. The REH grants privileges in accordance with recommendations from qualified medical personnel.
(ii) Medical staff privileges must be periodically reappraised by the REH. The scope of procedures performed in the REH must be periodically reviewed and amended as appropriate.
(iii) If the REH assigns patient care responsibilities to practitioners other than physicians, it must have established policies and procedures, approved by the governing body, for overseeing and evaluating their clinical activities.
(7) Ensure that under no circumstances is the accordance of staff membership or professional privileges in the REH dependent solely upon certification, fellowship, or membership in a specialty body or society.
(8) Ensure that, when telemedicine services are furnished to the REH's patients through an agreement with a distant-site hospital, the agreement is written and that it specifies that it is the responsibility of the governing body of the distant-site hospital to meet the requirements in paragraphs (a)(1) through (7) of this section with regard to the distant-site hospital's physicians and practitioners providing telemedicine services. The governing body of the REH whose patients are receiving the telemedicine services may, in accordance with § 485.512(a)(3), grant privileges based on its medical staff recommendations that rely on information provided by the distant-site hospital.
(9) Ensure that when telemedicine services are furnished to the REH's patients through an agreement with a distant-site telemedicine entity, the written agreement specifies that the distant-site telemedicine entity is a contractor of services to the REH and as such, in accordance with paragraph (b) of this section, furnishes the contracted services in a manner that permits the REH to comply with all applicable conditions of participation for the contracted services, including, but not limited to, the requirements in paragraphs (a)(1) through (7) of this section with regard to the distant-site telemedicine entity's physicians and practitioners providing telemedicine services. The governing body of the REH whose patients are receiving the telemedicine services may, in accordance with § 485.512(a)(4), grant privileges to physicians and practitioners employed by the distant-site telemedicine entity based on such REH's medical staff recommendations; such staff recommendations may rely on information provided by the distant-site telemedicine entity.
(10) Consult directly with the individual assigned the responsibility for the organization and conduct of the REH's medical staff, or their designee. At a minimum, this direct consultation must occur periodically throughout the fiscal or calendar year and include discussion of matters related to the quality of medical care provided to patients of the REH. For a multi-facility system, including a multi-hospital or multi-REH system, using a single governing body, the single multi-facility or multi-REH system governing body must consult directly with the individual responsible for the organized medical staff (or their designee) of each hospital or REH within its system in addition to the other requirements of this paragraph (a).
(b)
(1) The governing body must ensure that the services performed under a contract are provided in a safe and effective manner.
(2) The REH must maintain a list of all contracted services, including the scope and nature of the services provided.
The REH must have an organized medical staff that operates under bylaws approved by the governing body, and which is responsible for the quality of medical care provided to patients by the REH.
(a)
(1) The medical staff must periodically conduct appraisals of its members.
(2) The medical staff must examine the credentials of all eligible candidates for medical staff membership and make
(3) When telemedicine services are furnished to the REH's patients through an agreement with a distant-site hospital, the governing body of the REH whose patients are receiving the telemedicine services may choose, in lieu of the requirements in paragraphs (a)(1) and (2) of this section, to have its medical staff rely upon the credentialing and privileging decisions made by the distant-site hospital when making recommendations on privileges for the individual distant-site physicians and practitioners providing such services, if the REH's governing body ensures, through its written agreement with the distant-site hospital, that all of the following provisions are met:
(i) The distant-site hospital providing the telemedicine services is a Medicare-participating hospital.
(ii) The individual distant-site physician or practitioner is privileged at the distant-site hospital providing the telemedicine services, which provides a current list of the distant-site physician's or practitioner's privileges at the distant-site hospital.
(iii) The individual distant-site physician or practitioner holds a license issued or recognized by the state in which the REH whose patients are receiving the telemedicine services is located.
(iv) With respect to a distant-site physician or practitioner, who holds current privileges at the REH whose patients are receiving the telemedicine services, the REH has evidence of an internal review of the distant-site physician's or practitioner's performance of these privileges and sends the distant-site hospital such performance information for use in the periodic appraisal of the distant-site physician or practitioner. At a minimum, this information must include all adverse events that result from the telemedicine services provided by the distant-site physician or practitioner to the REH's patients and all complaints the REH has received about the distant-site physician or practitioner.
(4) When telemedicine services are furnished to the REH's patients through an agreement with a distant-site telemedicine entity, the governing body of the REH whose patients are receiving the telemedicine services may choose, in lieu of the requirements in paragraphs (a)(1) and (2) of this section, to have its medical staff rely upon the credentialing and privileging decisions made by the distant-site telemedicine entity when making recommendations on privileges for the individual distant-site physicians and practitioners providing such services, if the REH's governing body ensures, through its written agreement with the distant-site telemedicine entity, that the distant-site telemedicine entity furnishes services that, in accordance with paragraph (d) of this section, permit the REH to comply with all applicable conditions of participation for the contracted services. The REH's governing body must also ensure, through its written agreement with the distant-site telemedicine entity, that all of the following provisions are met:
(i) The distant-site telemedicine entity's medical staff credentialing and privileging process and standards at least meet the standards at § 485.510(a)(1) through (7) and paragraphs (a)(1) and (2) of this section.
(ii) The individual distant-site physician or practitioner is privileged at the distant-site telemedicine entity providing the telemedicine services, which provides the REH with a current list of the distant-site physician's or practitioner's privileges at the distant-site telemedicine entity.
(iii) The individual distant-site physician or practitioner holds a license issued or recognized by the state in which the REH whose patients are receiving such telemedicine services is located.
(iv) With respect to a distant-site physician or practitioner, who holds current privileges at the REH whose patients are receiving the telemedicine services, the REH has evidence of an internal review of the distant-site physician's or practitioner's performance of these privileges and sends the distant-site telemedicine entity such performance information for use in the periodic appraisal of the distant-site physician or practitioner. At a minimum, this information must include all adverse events that result from the telemedicine services provided by the distant-site physician or practitioner to the REH's patients, and all complaints the REH has received about the distant-site physician or practitioner.
(b)
(1) The medical staff must be organized in a manner approved by the governing body.
(2) If the medical staff has an executive committee, a majority of the members of the committee must be doctors of medicine or osteopathy.
(3) The responsibility for organization and conduct of the medical staff must be assigned only to one of the following:
(i) An individual doctor of medicine or osteopathy.
(ii) A doctor of dental surgery or dental medicine, when permitted by state law of the state in which the hospital is located.
(iii) A doctor of podiatric medicine, when permitted by state law of the state in which the hospital is located.
(4) If an REH is part of a system consisting of multiple separately certified hospitals, critical access hospitals, and/or REHs, and the system elects to have a unified and integrated medical staff for its member hospitals, critical access hospitals, and/or REHs after determining that such a decision is in accordance with all applicable state and local laws, each separately certified REH must demonstrate that:
(i) The medical staff members of each separately certified REH in the system (that is, all medical staff members who hold specific privileges to practice at that REH) have voted by majority, in accordance with medical staff bylaws, either to accept a unified and integrated medical staff structure or to opt out of such a structure and to maintain a separate and distinct medical staff for their respective REH;
(ii) The unified and integrated medical staff has bylaws, rules, and requirements that describe its processes for self-governance, appointment, credentialing, privileging, and oversight, as well as its peer review policies and due process rights guarantees, and which include a process for the members of the medical staff of each separately certified REH (that is, all medical staff members who hold specific privileges to practice at that REH) to be advised of their rights to opt out of the unified and integrated medical staff structure after a majority vote by the members to maintain a separate and distinct medical staff for their REH;
(iii) The unified and integrated medical staff is established in a manner that takes into account each member REH's unique circumstances and any significant differences in patient populations and services offered in each hospital, critical access hospital (CAH), and REH; and
(iv) The unified and integrated medical staff establishes and implements policies and procedures to ensure that the needs and concerns expressed by members of the medical staff, at each of its separately certified hospitals, CAHs, and REHs, regardless of practice or location, are given due consideration, and that the unified and integrated medical staff has mechanisms in place to ensure that issues localized to particular hospitals, CAHs, and REHs are duly considered and addressed.
(c)
(1) Be approved by the governing body.
(2) Include a statement of the duties and privileges of each category of medical staff (for example, active, courtesy, etc.).
(3) Describe the organization of the medical staff.
(4) Describe the qualifications to be met by a candidate in order for the medical staff to recommend that the candidate be appointed by the governing body.
(5) Include criteria for determining the privileges to be granted to individual practitioners and a procedure for applying the criteria to individuals requesting privileges. For distant-site physicians and practitioners requesting privileges to furnish telemedicine services under an agreement with the REH, the criteria for determining privileges and the procedure for applying the criteria are also subject to the requirements in § 485.510(a)(8) and (9) and paragraphs (a)(3) and (4) of this section.
(a) The REH's health care services must be furnished in accordance with appropriate written policies that are consistent with applicable state law.
(b) The policies must be developed with the advice of members of the REH's professional health care staff, including one or more doctors of medicine or osteopathy and one or more physician assistants, nurse practitioners, or clinical nurse specialists, if they are on staff under the provisions of § 485.528(b)(1).
(c) The policies must include the following:
(1) A description of the services the REH furnishes, including those furnished through agreement or arrangement.
(2) Policies and procedures for emergency medical services.
(3) Guidelines for the medical management of health problems that include the conditions requiring medical consultation and/or patient referral, the maintenance of health care records, and procedures for the periodic review and evaluation of the services furnished by the REH.
(4) Policies and procedures that address the post-acute care needs of patients receiving services in the REH.
(d) The policies must be reviewed at least biennially by the group of professional personnel required under paragraph (b) of this section and updated as necessary by the REH.
The REH must provide the emergency care necessary to meet the needs of its patients in accordance with acceptable standards of practice.
(a)
(1) Organized under the direction of a qualified member of the medical staff; and
(2) Integrated with other departments of the REH.
(b)
(c)
(1) 24-hour availability of emergency services (§ 485.618(a)).
(2) Equipment, supplies, and medication (§ 485.618(b)).
(3) Blood and blood products (§ 485.618(c)).
(4) Personnel (§ 485.618(d)).
(5) Coordination with emergency response systems (§ 485.618(e)).
The REH must provide basic laboratory services essential to the immediate diagnosis and treatment of the patient consistent with nationally recognized standards of care for emergency services, patient population, and services offered. The REH must ensure that—
(a) Laboratory services are available, either directly or through a contractual agreement with a certified laboratory that meets requirements of part 493 of this chapter.
(b) Emergency laboratory services are available 24 hours a day.
The REH must maintain, or have available, diagnostic radiologic services. If therapeutic services are also provided, the therapeutic services, as well as the diagnostic services, must be furnished by the REH and provided by personnel qualified under state law. The REH must ensure that REH patients or personnel are not exposed to radiation hazards.
(a)
(b)
(1) Proper safety precautions must be maintained against radiation hazards. This includes adequate shielding for patients, personnel, and facilities, as well as appropriate storage, use, and disposal of radioactive materials.
(2) Periodic inspection of equipment must be made and hazards identified must be promptly corrected.
(3) Radiation workers must be checked periodically, by the use of exposure meters or badge tests, for amount of radiation exposure.
(4) Radiologic services must be provided only on the order of practitioners with clinical privileges or, consistent with state law, of other practitioners authorized by the medical staff and the governing body to order the services.
(c)
(2) Only personnel designated as qualified by the medical staff may use the radiologic equipment and administer procedures.
(d)
(1) The radiologist or other practitioner who performs radiology services must sign reports of their interpretations.
(2) The REH must maintain the following for at least 5 years:
(i) Copies of reports and printouts.
(ii) Films, scans, and other image records, as appropriate.
The REH must have pharmaceutical services that meet the needs of its patients. The REH must have a pharmacy or a drug storage area that is directed by a registered pharmacist or other qualified individual in accordance with state scope of practice laws. The medical staff is responsible for developing policies and procedures that minimize drug errors. This function may be delegated to the REH's registered pharmacist or other qualified individual.
(a)
(1) A pharmacist or competent individual in accordance with state scope of practice laws must be responsible for developing, supervising, and coordinating all the activities of the pharmacy services. The pharmacist or competent individual in accordance with state law and scope of practice must be available for a sufficient time to provide oversight of the REH's pharmacy services based on the scope and complexity of the services offered at the REH.
(2) The pharmaceutical service must have an adequate number of personnel to ensure quality pharmaceutical services for the provision of all services provided by the REH.
(3) Current and accurate records must be kept of the receipt and disposition of all scheduled drugs.
(b)
(1) All compounding, packaging, and dispensing of drugs must be done by a licensed pharmacist or a licensed physician, or under the supervision of a pharmacist or competent individual in accordance with state law and scope of practice and performed consistent with state and Federal laws.
(2) All drugs and biologicals must be kept in a secure area, and locked when appropriate.
(i) All drugs listed in Schedules II, III, IV, and V of the Comprehensive Drug Abuse Prevention and Control Act of 1970 (21 U.S.C. 801
(ii) Only authorized personnel may have access to locked areas.
(3) Outdated, mislabeled, or otherwise unusable drugs and biologicals must not be available for patient use.
(4) Drugs and biologicals must be removed from the pharmacy or storage area only by personnel designated in the policies of the medical staff and pharmaceutical service, in accordance with Federal and state law.
(c)
(1) Adverse reactions must be reported to the physician responsible for the patient and must be documented in the record.
(2) Blood transfusions, blood products, and intravenous medications must be administered in accordance with state law and approved medical staff policies and procedures.
(3) Orders given orally for drugs and biologicals must be followed by a written order, signed by the prescribing physician or other authorized prescriber.
(4) There must be an REH procedure for reporting transfusion reactions, adverse drug reactions, and errors in administration of drugs.
If the REH provides outpatient medical and health services in addition to providing emergency services and observation care, the medical and health services must be appropriately organized and meet the needs of the patients in accordance with acceptable standards of practice.
(a)
(1) Provide items and services based on nationally recognized guidelines and standards of practice;
(2) Have a system in place for referral from the REH to different levels of care, including follow-up care, as appropriate;
(3) Have effective communication systems in place between the REH and the patient (or responsible individual) and their family, ensuring that the REH is responsive to their needs and preferences;
(4) Have established relationships with hospitals that have the resources and capacity available to deliver care that is beyond the scope of care delivered at the REH; and
(5) Have personnel providing these services who meet the requirements at paragraph (b) of this section.
(b)
(1) Assign one or more individuals to be responsible for outpatient services.
(2) Have appropriate professional and nonprofessional personnel available at each location where outpatient services are offered, based on the scope and complexity of outpatient services.
(3) For any specialty services offered at the REH, have a doctor of medicine or osteopathy, nurse practitioner, clinical nurse specialist, or physician assistant providing services with experience and training in the specialty service area and in accordance with their scope of practice.
(c) Standard: Orders for outpatient medical and health services. Outpatient medical and health services must be ordered by a practitioner who meets the following conditions:
(1) Is responsible for the care of the patient.
(2) Is licensed in the state where they provide care to the patient.
(3) Is acting within their scope of practice under state law.
(4) Is authorized in accordance with state law and policies adopted by the medical staff, and approved by the governing body, to order the applicable outpatient services. This applies to the following:
(i) All practitioners who are appointed to the REH's medical staff and who have been granted privileges to order the applicable outpatient services.
(ii) All practitioners not appointed to the medical staff, but who satisfy the requirements of paragraphs (c)(1) through (4) of this section for authorization by the medical staff and the REH for ordering the applicable outpatient services for their patients.
(d)
(1)
(i) A doctor of medicine or osteopathy, including an osteopathic practitioner recognized under section 1101(a)(7) of the Act;
(ii) A doctor of dental surgery or dental medicine; or
(iii) A doctor of podiatric medicine.
(2) Anesthetic risk and evaluation. (i) A qualified practitioner, as specified in paragraph (a) of this section, must examine the patient immediately before surgery to evaluate the risk of the procedure to be performed.
(ii) A qualified practitioner, as specified in paragraph (d)(3) of this section, must examine each patient before surgery to evaluate the risk of anesthesia.
(iii) Before discharge from the REH, each patient must be evaluated for proper anesthesia recovery by a qualified practitioner, as specified in paragraph (d)(3) of this section.
(3)
(i) Anesthesia must be administered by only—
(A) A qualified anesthesiologist;
(B) A doctor of medicine or osteopathy other than an anesthesiologist; including an osteopathic practitioner recognized under section 1101(a)(7) of the Act;
(C) A doctor of dental surgery or dental medicine;
(D) A doctor of podiatric medicine;
(E) A certified registered nurse anesthetist (CRNA), as defined in § 410.69(b) of this chapter;
(F) An anesthesiologist's assistant, as defined in § 410.69(b) of this chapter; or
(G) A supervised trainee in an approved educational program, as described in § 413.85 or §§ 413.76 through 413.83 of this chapter.
(ii) In those cases in which a CRNA administers the anesthesia, the anesthetist must be under the supervision of the operating practitioner except as provided in paragraph (e) of this section. An anesthesiologist's assistant who administers anesthesia must be under the supervision of an anesthesiologist.
(4)
(5)
(ii) The request for exemption and recognition of state laws and the withdrawal of the request may be submitted at any time, and are effective upon submission.
The REH must have active facility-wide programs for the surveillance, prevention, and control of healthcare-associated infections (HAIs) and other infectious diseases, and for the optimization of antibiotic use through stewardship. The programs must demonstrate adherence to nationally recognized infection prevention and control guidelines, as well as to best practices for improving antibiotic use where applicable, and for reducing the development and transmission of HAIs and antibiotic-resistant organisms. Infection prevention and control problems and antibiotic use issues identified in the programs must be addressed in collaboration with the facility-wide quality assessment and performance improvement (QAPI) program.
(a)
(1) An individual (or individuals), who is qualified through education, training, experience, or certification in infection prevention and control, is appointed by the governing body, or responsible individual, as the infection preventionist(s)/infection control professional(s) responsible for the infection prevention and control program and that the appointment is based on the recommendations of medical staff leadership and nursing leadership;
(2) The infection prevention and control program, as documented in its policies and procedures, employs methods for preventing and controlling the transmission of infections within the REH and between the REH and other health care settings;
(3) The infection prevention and control program include surveillance, prevention, and control of HAIs, including maintaining a clean and sanitary environment to avoid sources and transmission of infection, and that the program also addresses any infection control issues identified by public health authorities; and
(4) The infection prevention and control program reflects the scope and complexity of the services furnished by the REH.
(b)
(1) An individual (or individuals), who is qualified through education, training, or experience in infectious diseases and/or antibiotic stewardship, is appointed by the governing body, or responsible individual, as the leader(s) of the antibiotic stewardship program and that the appointment is based on the recommendations of medical staff leadership and pharmacy leadership;
(2) The facility-wide antibiotic stewardship program:
(i) Demonstrates coordination among all components of the REH responsible for antibiotic use and resistance, including, but not limited to, the infection prevention and control program, the QAPI program, the medical staff, nursing services, and pharmacy services;
(ii) Documents the evidence-based use of antibiotics in all departments and services of the REH; and
(iii) Documents any improvements, including sustained improvements, in proper antibiotic use;
(3) The antibiotic stewardship program adheres to nationally recognized guidelines, as well as best practices, for improving antibiotic use; and
(4) The antibiotic stewardship program reflects the scope and complexity of the services furnished by an REH.
(c)
(i) Systems are in place and operational for the tracking of all infection surveillance, prevention and control, and antibiotic use activities, in order to demonstrate the
(ii) All HAIs and other infectious diseases identified by the infection prevention and control program as well as antibiotic use issues identified by the antibiotic stewardship program are addressed in collaboration with the REH's QAPI leadership.
(2) The infection prevention and control professional(s) are responsible for:
(i) The development and implementation of facility-wide infection surveillance, prevention, and control policies and procedures that adhere to nationally recognized guidelines.
(ii) All documentation, written or electronic, of the infection prevention and control program and its surveillance, prevention, and control activities.
(iii) Communication and collaboration with the REH's QAPI program on infection prevention and control issues.
(iv) Competency-based training and education of REH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the REH, on the practical applications of infection prevention and control guidelines, policies and procedures.
(v) The prevention and control of HAIs, including auditing of adherence to infection prevention and control policies and procedures by REH personnel.
(vi) Communication and collaboration with the antibiotic stewardship program.
(3) The leader(s) of the antibiotic stewardship program is responsible for:
(i) The development and implementation of a facility-wide antibiotic stewardship program, based on nationally recognized guidelines, to monitor and improve the use of antibiotics.
(ii) All documentation, written or electronic, of antibiotic stewardship program activities.
(iii) Communication and collaboration with medical staff, nursing, and pharmacy leadership, as well as the REH's infection prevention and control and QAPI programs, on antibiotic use issues.
(iv) Competency-based training and education of REH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the REH, on the practical applications of antibiotic stewardship guidelines, policies, and procedures.
(d)
(1) The unified and integrated infection prevention and control and antibiotic stewardship programs are established in a manner that takes into account each member REH's unique circumstances and any significant differences in patient populations and services offered in each REH;
(2) The unified and integrated infection prevention and control and antibiotic stewardship programs establish and implement policies and procedures to ensure that the needs and concerns of each of its separately certified REHs, regardless of practice or location, are given due consideration;
(3) The unified and integrated infection prevention and control and antibiotic stewardship programs have mechanisms in place to ensure that issues localized to particular REHs are duly considered and addressed; and
(4) A qualified individual (or individuals) with expertise in infection prevention and control and in antibiotic stewardship has been designated at the REH as responsible for communicating with the unified infection prevention and control and antibiotic stewardship programs, for implementing and maintaining the policies and procedures governing infection prevention and control and antibiotic stewardship as directed by the unified infection prevention and control and antibiotic stewardship programs, and for providing education and training on the practical applications of infection prevention and control and antibiotic stewardship to REH staff.
(e)
(1) Related to COVID-19, to the extent as required by the Secretary, this report must include the following data elements:
(i) Suspected and confirmed COVID-19 infections among patients and staff.
(ii) Total COVID-19 deaths among patients and staff.
(iii) Personal protective equipment and testing supplies.
(iv) Ventilator use, capacity, and supplies.
(v) Total patient census and capacity.
(vi) Staffing shortages.
(vii) COVID-19 vaccine administration data of patients and staff.
(viii) Relevant therapeutic inventories or usage, or both.
(2) Related to seasonal influenza, to the extent as required by the Secretary, this report must include the following data elements:
(i) Confirmed influenza infections among patients and staff.
(ii) Total influenza deaths among patients and staff.
(iii) Confirmed co-morbid influenza and COVID-19 infections among patients and staff.
(f)
(1) The REH must electronically report information about the infectious disease pathogen, relevant to the declared PHE, in a standardized format specified by the Secretary. To the extent as required by the Secretary, this report must include, the following:
(i) Suspected and confirmed infections of the relevant infectious disease pathogen among patients and staff.
(ii) Total deaths attributed to the relevant infectious disease pathogen among patients and staff.
(iii) Personal protective equipment and other relevant supplies in the REH.
(iv) Capacity and supplies in the REH relevant to the immediate and long term treatment of the relevant infectious disease pathogen, such as ventilator and dialysis/continuous renal replacement therapy capacity and supplies.
(v) Total patient census, capacity, and capability.
(vi) Staffing shortages.
(vii) Vaccine administration data of patients and staff for conditions monitored under this section and where a specific vaccine is applicable.
(viii) Relevant therapeutic inventories or usage, or both.
(ix) Isolation capacity, including airborne isolation capacity.
(x) Key co-morbidities or exposure risk factors, or both, of patients being treated for the pathogen or disease of interest in this section that are captured with interoperable data standards and elements.
(2) Unless the Secretary specifies an alternative format by which the REH must report these data elements, the REH must report the applicable infection (confirmed and suspected) and vaccination data in a format that provides person-level information, which must include medical record identifier, race, ethnicity, age, sex, residential county and zip code, and relevant comorbidities for affected patients. Facilities must not report any directly or potentially individually-identifiable information for affected patients (for example, name, social security number) that is not set out in this section or otherwise specified by the Secretary.
(3) The REH must provide the information specified in this paragraph (f) on a daily basis, unless the Secretary specifies a lesser frequency, to the Centers for Disease Control and Prevention's (CDC) National Healthcare Safety Network or other CDC-supported surveillance systems as determined by the Secretary.
(g)
(1) Regardless of clinical responsibility or patient contact, the policies and procedures must apply to the following REH staff, who provide any care, treatment, or other services for the REH and/or its patients:
(i) REH employees;
(ii) Licensed practitioners;
(iii) Students, trainees, and volunteers; and
(iv) Individuals who provide care, treatment, or other services for the REH and/or its patients, under contract or by other arrangement.
(2) The policies and procedures of this section do not apply to the following REH staff:
(i) Staff who exclusively provide telehealth or telemedicine services outside of the REH setting and who do not have any direct contact with patients and other staff specified in paragraph (f)(1) of this section; and
(ii) Staff who provide support services for the REH that are performed exclusively outside of the REH setting and who do not have any direct contact with patients and other staff specified in paragraph (f)(1) of this section.
(3) The policies and procedures must include, at a minimum, the following components:
(i) A process for ensuring all staff specified in paragraph (f)(1) of this section (except for those staff who have pending requests for, or who have been granted, exemptions to the vaccination requirements of this section, or those staff for whom COVID-19 vaccination must be temporarily delayed, as recommended by the CDC, due to clinical precautions and considerations) have received, at a minimum, a single-dose COVID-19 vaccine, or the first dose of the primary vaccination series for a multi-dose COVID-19 vaccine prior to staff providing any care, treatment, or other services for the REH and/or its patients;
(ii) A process for ensuring that all staff specified in paragraph (f)(1) of this section are fully vaccinated for COVID-19, except for those staff who have been granted exemptions to the vaccination requirements of this section, or those staff for whom COVID-19 vaccination must be temporarily delayed, as recommended by the CDC, due to clinical precautions and considerations;
(iii) A process for ensuring the implementation of additional precautions, intended to mitigate the transmission and spread of COVID-19, for all staff who are not fully vaccinated for COVID-19;
(iv) A process for tracking and securely documenting the COVID-19 vaccination status of all staff specified in paragraph (f)(1) of this section;
(v) A process for tracking and securely documenting the COVID-19 vaccination status of any staff who have obtained any booster doses as recommended by the CDC;
(vi) A process by which staff may request an exemption from the staff COVID-19 vaccination requirements based on an applicable Federal law;
(vii) A process for tracking and securely documenting information provided by those staff who have requested, and for whom the REH has granted, an exemption from the staff COVID-19 vaccination requirements based on recognized clinical contraindications or applicable Federal laws;
(viii) A process for ensuring that all documentation, which confirms recognized clinical contraindications to COVID-19 vaccines and which supports staff requests for medical exemptions from vaccination, has been signed and dated by a licensed practitioner, who is not the individual requesting the exemption, and who is acting within their respective scope of practice as defined by, and in accordance with, all applicable state and local laws, and for further ensuring that such documentation contains:
(A) All information specifying which of the authorized COVID-19 vaccines are clinically contraindicated for the staff member to receive and the recognized clinical reasons for the contraindications; and
(B) A statement by the authenticating practitioner recommending that the staff member be exempted from the REH's COVID-19 vaccination requirements for staff based on the recognized clinical contraindications;
(ix) A process for ensuring the tracking and secure documentation of the vaccination status of staff for whom COVID-19 vaccination must be temporarily delayed, as recommended by the CDC, due to clinical precautions and considerations, including, but not limited to, individuals with acute illness secondary to COVID-19, and individuals who received monoclonal antibodies or convalescent plasma for COVID-19 treatment; and
(x) Contingency plans for staff who are not fully vaccinated for COVID-19.
(a)
(b)
(2) Any ancillary personnel are supervised by the professional staff.
(3) The staff is sufficient to provide the services essential to the operation of the REH.
(4) A registered nurse, clinical nurse specialist, or licensed practical nurse is on duty whenever the REH has one or more patients receiving emergency care or observation care.
(c)
(i) Provide medical direction for the REH's health care activities and consultation for, and medical supervision of, the health care staff.
(ii) In conjunction with the physician assistant and/or nurse practitioner member(s), participate in developing, executing, and periodically reviewing the REH's written policies governing the services it furnishes.
(iii) In conjunction with the physician assistant and/or nurse practitioner members, periodically review the REH's patient records, provide medical orders, and provide medical care services to the patients of the REH.
(iv) Periodically review and sign a sample of outpatient records of patients cared for by nurse practitioners, clinical nurse specialists, certified nurse midwives, or physician assistants only to the extent where state law requires record reviews or co-signatures, or both, by a collaborating physician.
(2) A doctor of medicine or osteopathy must be present for sufficient periods of time to provide medical direction, consultation, and supervision for the services provided in the REH, and is available through direct radio or telephone communication or electronic communication for consultation, assistance with medical emergencies, or patient referral.
(d)
(i) Participate in the development, execution and periodic review of the written policies governing the services the REH furnishes; and
(ii) Participate with a doctor of medicine or osteopathy in a periodic review of the patients' health records.
(2) The physician assistant, nurse practitioner, or clinical nurse specialist performs the following functions to the extent they are not being performed by a doctor of medicine or osteopathy:
(i) Provides services in accordance with the REH's policies.
(ii) Arranges for, or refers patients to, needed services that cannot be furnished at the REH, and assures that adequate patient health records are maintained and transferred as required when patients are referred.
(3) Whenever a patient is placed in observation care at the REH by a nurse practitioner, physician assistant, or clinical nurse specialist, a doctor of medicine or osteopathy on the staff of the REH is notified of the patient's status.
(e)
(1) The quality and appropriateness of the diagnosis and treatment furnished by nurse practitioners, clinical nurse specialists, and physician assistants at the REH must be evaluated by a member of the REH staff who is a doctor of medicine or osteopathy or by another doctor of medicine or osteopathy under contract with the REH.
(2) The quality and appropriateness of the diagnosis and treatment furnished by doctors of medicine or osteopathy at the REH must be evaluated by one of the following —
(i) One Quality Improvement Organization (QIO) or equivalent entity.
(ii) In the case of distant-site physicians and practitioners providing telemedicine services to the REH's patient under an agreement between the REH and a distant-site hospital, the distant-site hospital; or
(iii) In the case of distant-site physicians and practitioners providing telemedicine services to the REH's patients under a written agreement between the REH and a distant-site telemedicine entity, one Quality Improvement Organization (QIO) or equivalent entity.
(3) The REH staff consider the findings of the evaluation and make the necessary changes as specified in paragraphs (b) through (d) of this section.
The REH must have an organized nursing service that is available to provide 24-hour nursing services for the provision of patient care. The nursing services must be furnished and supervised by a registered nurse. Nursing services must meet the needs of patients.
(a)
(b)
An REH must have an effective discharge planning process that focuses on the patient's goals and treatment preferences and includes the patient and their caregivers/support person(s) as active partners in the discharge planning for post-discharge care. The discharge planning process and the discharge plan must be consistent with the patient's goals for care and their treatment preferences, ensure an effective transition of the patient from the REH to post-discharge care, and reduce the factors leading to preventable hospital admissions or readmissions.
(a)
(1) Any discharge planning evaluation must be made on a timely basis to ensure that appropriate arrangements for post-REH care will be made before discharge and to avoid unnecessary delays in discharge.
(2) A discharge planning evaluation must include an evaluation of a patient's likely need for appropriate services following those furnished by the REH, including, but not limited to, hospice care services, post-REH extended care services, home health services, and non-health care services and community-based care providers, and must also include a determination of the availability of the appropriate services as well as of the patient's access to those services.
(3) The discharge planning evaluation must be included in the patient's
(4) Upon the request of a patient's physician, the REH must arrange for the development and initial implementation of a discharge plan for the patient.
(5) Any discharge planning evaluation or discharge plan required under this paragraph (a) must be developed by, or under the supervision of, a registered nurse, social worker, or other appropriately qualified personnel.
(6) The REH's discharge planning process must require regular re-evaluation of the patient's condition to identify changes that require modification of the discharge plan. The discharge plan must be updated, as needed, to reflect these changes.
(7) The REH must assess its discharge planning process on a regular basis. The assessment must include ongoing periodic review of a representative sample of discharge plans.
(8) The REH must assist patients, their families, or the patient's representative in selecting a post-acute care provider by using and sharing data that includes, but is not limited to, home health agency (HHA), skilled nursing facility (SNF), inpatient rehabilitation facility (IRF), or long term care hospital (LTCH) data on quality measures and data on resource use measures. The REH must ensure that the post-acute care data on quality measures and data on resource use measures is relevant and applicable to the patient's goals of care and treatment preferences.
(b)
An REH must protect and promote each patient's rights.
(a)
(2) The REH must establish a process for prompt resolution of patient grievances and must inform each patient whom to contact to file a grievance. The REH's governing body or responsible individual must approve and be responsible for the effective operation of the grievance process and must review and resolve grievances, unless it delegates the responsibility in writing to a grievance committee. The grievance process must include a mechanism for timely referral of patient concerns regarding quality of care or premature discharge to the appropriate Utilization and Quality Control Quality Improvement Organization. At a minimum:
(i) The REH must establish a clearly explained procedure for the submission of a patient's written or verbal grievance to the REH.
(ii) The grievance process must specify time frames for review of the grievance and the provision of a response.
(iii) In its resolution of the grievance, the REH must provide the patient with written notice of its decision that contains the name of the REH contact person, the steps taken on behalf of the patient to investigate the grievance, the results of the grievance process, and the date of completion.
(b)
(1) Participate in the development and implementation of their plan of care.
(2) Make informed decisions regarding their care, including being informed of their health status, and being able to request or refuse treatment. This right must not be construed as a mechanism to demand the provision of treatment or services deemed medically unnecessary or inappropriate.
(3) Formulate advance directives and to have REH staff and practitioners who provide care in the REH comply with these directives, in accordance with §§ 489.100, 489.102, and 489.104 of this chapter.
(c)
(1) Personal privacy.
(2) Receive care in a safe setting.
(3) Be free from all forms of abuse or harassment.
(d)
(2) The patient has the right to access their medical records, including current medical records, upon an oral or written request.
(i) The records must be provided in the form and format requested by the individual, if it is readily producible in such form and format. This includes in an electronic form or format when such medical records are maintained electronically or if not, in a readable hard copy form or such other form and format as agreed to by the facility and the individual.
(ii) The records must be provided within a reasonable time frame. The REH must not frustrate the legitimate efforts of individuals to gain access to their own medical records and must actively seek to meet these requests as quickly as its record keeping system permits.
(e)
(1)(i) A
(A) Any manual method, physical or mechanical device, material, or equipment that immobilizes or reduces the ability of a patient to move their arms, legs, body, or head freely; or
(B) A drug or medication when it is used as a restriction to manage the patient's behavior or restrict the patient's freedom of movement and is not a standard treatment or dosage for the patient's condition.
(C) A restraint does not include devices, such as orthopedically prescribed devices, surgical dressings or bandages, protective helmets, or other methods that involve the physical holding of a patient for the purpose of conducting routine physical examinations or tests, or to protect the patient from falling out of bed, off of a stretcher, or out of a chair, or to permit the patient to participate in activities without the risk of physical harm (this does not include a physical escort).
(ii)
(2) Restraint or seclusion may only be used when less restrictive interventions have been determined to be ineffective to protect the patient, a staff member or others from harm.
(3) The type or technique of restraint or seclusion used must be the least restrictive intervention that will be effective to protect the patient, a staff member, or others from harm.
(4) The REH must have written policies and procedures regarding the use of restraint and seclusion that are consistent with current standards of practice.
(f)
(1) The REH must provide patient-centered competency-based training and education of REH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the REH, on the use of restraint and seclusion.
(2) The training must include alternatives to the use of restraint/seclusion.
(g)
(1) With the exception of deaths described under paragraph (g)(2) of this section, the REH must report the following information to CMS by telephone, facsimile, or electronically, as determined by CMS, no later than the close of business on the next business day following knowledge of the patient's death:
(i) Each death that occurs while a patient is in restraint or seclusion.
(ii) Each death that occurs within 24 hours after the patient has been removed from restraint or seclusion.
(iii) Each death known to the REH that occurs within 1 week after restraint or seclusion where it is reasonable to assume that use of restraint or placement in seclusion contributed directly or indirectly to a patient's death, regardless of the type(s) of restraint used on the patient during this time. “Reasonable to assume” in this context includes, but is not limited to, deaths related to restrictions of movement for prolonged periods of time, or death related to chest compression, restriction of breathing, or asphyxiation.
(2) When no seclusion has been used and when the only restraints used on the patient are those applied exclusively to the patient's wrist(s), and which are composed solely of soft, non-rigid, cloth-like materials, the REH staff must record in an internal log or other system, the following information:
(i) Any death that occurs while a patient is in such restraints.
(ii) Any death that occurs within 24 hours after a patient has been removed from such restraints.
(3) The staff must document in the patient's medical record the date and time the death was:
(i) Reported to CMS for deaths described in paragraph (g)(1) of this section; or
(ii) Recorded in the internal log or other system for deaths described in paragraph (g)(2) of this section.
(4) For deaths described in paragraph (g)(2) of this section, entries into the internal log or other system must be documented as follows:
(i) Each entry must be made not later than seven days after the date of death of the patient.
(ii) Each entry must document the patient's name, date of birth, date of death, name of attending physician or other licensed practitioner who is responsible for the care of the patient, medical record number, and primary diagnosis(es).
(iii) The information must be made available in either written or electronic form to CMS immediately upon request.
(h)
(1) Inform each patient (or support person, where appropriate) of their visitation rights, including any clinical restriction or limitation on such rights, when they are informed of their other rights under this section.
(2) Inform each patient (or support person, where appropriate) of the right, subject to their consent, to receive the visitors whom they designate, including, but not limited to, a spouse, a domestic partner (including a same-sex domestic partner), another family member, or a friend, and their right to withdraw or deny such consent at any time.
(3) Not restrict, limit, or otherwise deny visitation privileges on the basis of race, color, national origin, religion, sex, gender identity, sexual orientation, or disability.
(4) Ensure that all visitors enjoy full and equal visitation privileges consistent with patient preferences.
The REH must develop, implement, and maintain an effective, ongoing, REH-wide, data-driven quality assessment and performance improvement (QAPI) program. The REH's governing body must ensure that the program reflects the complexity of the REH's organization and services; involves all REH departments and services (including those services furnished under contract or arrangement); and focuses on indicators related to improved health outcomes and the prevention and reduction of medical errors. The REH must maintain and demonstrate evidence of its QAPI program for review by CMS.
(a)
(2) The REH must measure, analyze, and track quality indicators, including adverse patient events, staffing, and other aspects of performance that assess processes of care including REH service and operations.
(b)
(c)
(i) Focus on high-risk, high-volume, or problem-prone areas;
(ii) Consider the incidence, prevalence, and severity of problems in those areas; and
(iii) Affect health outcomes, patient safety, and quality of care.
(2) Performance improvement activities must track medical errors and adverse patient events, analyze their causes, and implement preventive actions and mechanisms that include feedback and learning throughout the REH. An adverse patient event means an untoward, undesirable, and usually unanticipated event that causes death or serious injury or the risk thereof. Medical error means an error that occurs in the delivery of health care services.
(3) The REH must take actions aimed at performance improvement and, after implementing those actions, the REH must measure its success, and track performance to ensure that improvements are sustained.
(d)
(1) That an ongoing program for quality improvement and patient safety, including the reduction of medical errors, is defined, implemented, and maintained.
(2) That the REH-wide quality assessment and performance improvement efforts address priorities for improved quality of care and patient safety; and that all improvement actions are evaluated.
(3) That clear expectations for safety are established.
(4) That adequate resources are allocated for measuring, assessing, improving, and sustaining the REH's performance and reducing risk to patients.
(e)
(1) The unified and integrated QAPI program is established in a manner that takes into account each member REH's unique circumstances and any significant differences in patient populations and services offered in each REH; and
(2) The unified and integrated QAPI program establishes and implements policies and procedures to ensure that the needs and concerns of each of its separately certified REHs, regardless of practice or location, are given due consideration, and that the unified and integrated QAPI program has mechanisms in place to ensure that issues localized to particular REHs are duly considered and addressed.
The REH must have in effect an agreement with at least one certified hospital that is a level I or level II trauma center for the referral and transfer of patients requiring emergency medical care beyond the capabilities of the REH that is—
(a) Licensed as a hospital in a state that provides for the licensing of hospitals under state or applicable local law or approved by the agency of such state or locality responsible for licensing hospitals, as meeting standards established for licensing established by the agency of the state; and
(b) Licensed or designated by the state or local government authority as level I or level II trauma center or is verified by the American College of Surgeons as a level I or level II trauma center.
(a)
(2) The records must be legible, complete, accurately documented, readily accessible, and systematically organized.
(3) A designated member of the professional staff is responsible for maintaining the records and for ensuring that they are completely and accurately documented, readily accessible, and systematically organized.
(4) For each patient receiving health care services, the REH must maintain a record that includes, as applicable—
(i) Identification and social data, evidence of properly executed informed consent forms, pertinent medical history, assessment of the health status and health care needs of the patient, and a brief summary of the episode, disposition, and instructions to the patient;
(ii) Reports of physical examinations, diagnostic and laboratory test results, including clinical laboratory services, and consultative findings;
(iii) All orders of doctors of medicine or osteopathy or other practitioners, reports of treatments and medications, nursing notes and documentation of complications, and other pertinent information necessary to monitor the patient's progress, such as temperature graphics, progress notes describing the patient's response to treatment; and
(iv) Dated signatures of the doctor of medicine or osteopathy or other health care professional.
(b)
(2) The REH must have written policies and procedures that govern the use and removal of records from the REH and the conditions for the release of information.
(3) The patient's written consent is required for release of information not required by law.
(c)
(d)
(1) The system's notification capacity is fully operational and the REH uses it in accordance with all state and Federal statutes and regulations applicable to the REH's exchange of patient health information.
(2) The system sends notifications that must include at least patient name, treating practitioner name, and sending institution name.
(3) To the extent permissible under applicable Federal and state law and regulations, and not inconsistent with the patient's expressed privacy preferences, the system sends notifications directly, or through an intermediary that facilitates exchange of health information, at the time of the patient's registration in the REH's emergency department.
(4) To the extent permissible under applicable Federal and state law and regulations, and not inconsistent with the patient's expressed privacy preferences, the system sends notifications directly, or through an intermediary that facilitates exchange of health information, either immediately prior to, or at the time the patient's discharge or transfer from the REH's emergency department.
(5) The REH has made a reasonable effort to ensure that the system sends the notifications to all applicable post-acute care services providers and suppliers, as well as to any of the following practitioners and entities, which need to receive notification of the patient's status for treatment, care coordination, or quality improvement purposes:
(i) The patient's established primary care practitioner;
(ii) The patient's established primary care practice group or entity; or
(iii) Other practitioner, or other practice group or entity, identified by the patient as the practitioner, or practice group or entity, primarily responsible for their care.
The REH must comply with all applicable Federal, state, and local emergency preparedness requirements. The REH must establish and maintain an emergency preparedness program that meets the requirements of this section. The emergency preparedness program must include, but not be limited to, the following elements:
(a)
(1) Be based on and include a documented, facility-based and community-based risk assessment, utilizing an all-hazards approach.
(2) Include strategies for addressing emergency events identified by the risk assessment.
(3) Address patient population, including, but not limited to, the type of services the REH has the ability to provide in an emergency; and continuity of operations, including delegations of authority and succession plans.
(4) Include a process for cooperation and collaboration with local, tribal, regional, state, and Federal emergency preparedness officials' efforts to maintain an integrated response during a disaster or emergency situation.
(b)
(1) The provision of subsistence needs for staff and patients, whether they evacuate or shelter in place, include, but are not limited to—
(i) Food, water, medical, and pharmaceutical supplies;
(ii) Alternate sources of energy to maintain:
(A) Temperatures to protect patient health and safety and for the safe and sanitary storage of provisions;
(B) Emergency lighting;
(C) Fire detection, extinguishing, and alarm systems; and
(D) Sewage and waste disposal.
(2) A system to track the location of on-duty staff and sheltered patients in the REH's care during an emergency. If on-duty staff or sheltered patients are relocated during the emergency, the REH must document the specific name and location of the receiving facility or other location.
(3) Safe evacuation from the REH, which includes the following:
(i) Consideration of care and treatment needs of evacuees.
(ii) Staff responsibilities.
(iii) Transportation.
(iv) Identification of evacuation location(s).
(v) Primary and alternate means of communication with external sources of assistance.
(4) A means to shelter in place for patients, staff, and volunteers who remain in the REH.
(5) A system of medical documentation that does the following:
(i) Preserves patient information.
(ii) Protects confidentiality of patient information.
(iii) Secures and maintains the availability of records.
(6) The use of volunteers in an emergency and other staffing strategies, including the process and role for integration of state and federally designated health care professionals to address surge needs during an emergency.
(7) The role of the REH under a waiver declared by the Secretary, in accordance with section 1135 of the Act, in the provision of care and treatment at an alternate care site identified by emergency management officials.
(c)
(1) Names and contact information for the following:
(i) Staff.
(ii) Entities providing services under arrangement.
(iii) Patients' physicians.
(iv) Volunteers.
(2) Contact information for the following:
(i) Federal, state, tribal, regional, and local emergency preparedness staff.
(ii) Other sources of assistance.
(3) Primary and alternate means for communicating with the following:
(i) REH's staff.
(ii) Federal, state, tribal, regional, and local emergency management agencies.
(4) A method for sharing information and medical documentation for patients under the REH's care, as necessary, with other health care providers to maintain the continuity of care.
(5) A means, in the event of an evacuation, to release patient information as permitted under 45 CFR 164.510(b)(1)(ii).
(6) A means of providing information about the general condition and location of patients under the facility's care as permitted under 45 CFR 164.510(b)(4).
(7) A means of providing information about the REH's needs, and its ability to provide assistance, to the authority having jurisdiction, the Incident Command Center, or designee.
(d)
(1)
(i) Provide initial training in emergency preparedness policies and procedures to all new and existing staff, individuals providing on-site services under arrangement, and volunteers, consistent with their expected roles.
(ii) Provide emergency preparedness training at least every 2 years.
(iii) Maintain documentation of all emergency preparedness training.
(iv) Demonstrate staff knowledge of emergency procedures.
(v) If the emergency preparedness policies and procedures are significantly updated, the REH must conduct training on the updated policies and procedures.
(2)
(i) Participate in a full-scale exercise that is community-based every 2 years.
(A) When a community-based exercise is not accessible, conduct a facility-based functional exercise every 2 years; or
(B) If the REH experiences an actual natural or man-made emergency that requires activation of the emergency plan, the REH is exempt from engaging in its next required community-based or individual, facility-based functional exercise following the onset of the emergency event.
(ii) Conduct an additional exercise at least every 2 years, opposite the year the full-scale or functional exercise under paragraph (d)(2)(i) of this section is conducted, that may include, but is not limited to the following:
(A) A second full-scale exercise that is community-based, or an individual, facility-based functional exercise; or
(B) A mock disaster drill; or
(C) A tabletop exercise or workshop that is led by a facilitator and includes a group discussion using a narrated, clinically-relevant emergency scenario, and a set of problem statements, directed messages, or prepared questions designed to challenge an emergency plan.
(iii) Analyze the REH's response to and maintain documentation of all drills, tabletop exercises, and emergency events and revise the REH's emergency plan, as needed.
(e)
(1)
(2)
(3)
(f)
(1) Demonstrate that each separately certified facility within the system actively participated in the development of the unified and integrated emergency preparedness program.
(2) Be developed and maintained in a manner that takes into account each separately certified facility's unique circumstances, patient populations, and services offered.
(3) Demonstrate that each separately certified facility is capable of actively using the unified and integrated emergency preparedness program and is in compliance.
(4) Include a unified and integrated emergency plan that meets the requirements of paragraphs (a)(2), (3), and (4) of this section. The unified and integrated emergency plan must also be based on and include the following:
(i) A documented community-based risk assessment, utilizing an all-hazards approach.
(ii) A documented individual facility-based risk assessment for each separately certified facility within the health system, utilizing an all-hazards approach.
(5) Include integrated policies and procedures that meet the requirements set forth in paragraph (b) of this section, a coordinated communication plan and training and testing programs that meet the requirements of paragraphs (c) and (d) of this section, respectively.
(g)
(1) National Fire Protection Association, 1 Batterymarch Park, Quincy, MA 02169,
(i) NFPA 99, Health Care Facilities Code, 2012 edition, issued August 11, 2011.
(ii) Technical interim amendment (TIA) 12-2 to NFPA 99, issued August 11, 2011.
(iii) TIA 12-3 to NFPA 99, issued August 9, 2012.
(iv) TIA 12-4 to NFPA 99, issued March 7, 2013.
(v) TIA 12-5 to NFPA 99, issued August 1, 2013.
(vi) TIA 12-6 to NFPA 99, issued March 3, 2014.
(vii) NFPA 101, Life Safety Code, 2012 edition, issued August 11, 2011.
(viii) TIA 12-1 to NFPA 101, issued August 11, 2011.
(ix) TIA 12-2 to NFPA 101, issued October 30, 2012.
(x) TIA 12-3 to NFPA 101, issued October 22, 2013.
(xi) TIA 12-4 to NFPA 101, issued October 22, 2013.
(xii) NFPA 110, Standard for Emergency and Standby Power Systems, 2010 edition, including TIAs to chapter 7, issued August 6, 2009.
(2) [Reserved]
The REH must be constructed, arranged, and maintained to ensure the safety of the patient, and to provide facilities for diagnosis and treatment and for special services appropriate to the needs of the community.
(a)
(1) There must be emergency power and lighting in at least the operating, recovery, and emergency rooms, and stairwells. In all other areas not serviced by the emergency supply source, battery lamps and flashlights must be available.
(2) There must be facilities for emergency gas and water supply.
(3) The REH must have a safe and sanitary environment, properly constructed, equipped, and maintained to protect the health and safety of patients.
(b)
(1) Diagnostic and therapeutic facilities must be located for the safety of patients.
(2) Facilities, supplies, and equipment must be maintained to ensure an acceptable level of safety and quality.
(3) The extent and complexity of facilities must be determined by the services offered.
(4) There must be proper ventilation, light, and temperature controls in patient care, pharmaceutical, food preparation, and other appropriate areas.
(c)
(2) In consideration of a recommendation by the state survey
(3) The provisions of the Life Safety Code do not apply in a state if CMS finds that a fire and safety code imposed by state law adequately protects patients in an REH.
(4) An REH may place alcohol-based hand rub dispensers in its facility if the dispensers are installed in a manner that adequately protects against inappropriate access.
(5) When a sprinkler system is shut down for more than 10 hours, the REH must:
(i) Evacuate the building or portion of the building affected by the system outage until the system is back in service, or
(ii) Establish a fire watch until the system is back in service.
(d)
(1) Chapters 7, 8, 12, and 13 of the adopted Health Care Facilities Code do not apply to an REH.
(2) If application of the Health Care Facilities Code required under paragraph (d) of this section would result in unreasonable hardship for the REH, CMS may waive specific provisions of the Health Care Facilities Code, but only if the waiver does not adversely affect the health and safety of patients.
(e)
(1) National Fire Protection Association, 1 Batterymarch Park, Quincy, MA 02169,
(i) NFPA 99, Health Care Facilities Code, 2012 edition, issued August 11, 2011.
(ii) Technical interim amendment (TIA) 12-2 to NFPA 99, issued August 11, 2011.
(iii) TIA 12-3 to NFPA 99, issued August 9, 2012.
(iv) TIA 12-4 to NFPA 99, issued March 7, 2013.
(v) TIA 12-5 to NFPA 99, issued August 1, 2013.
(vi) TIA 12-6 to NFPA 99, issued March 3, 2014.
(vii) NFPA 101, Life Safety Code, 2012 edition, issued August 11, 2011;
(viii) TIA 12-1 to NFPA 101, issued August 11, 2011.
(ix) TIA 12-2 to NFPA 101, issued October 30, 2012.
(x) TIA 12-3 to NFPA 101, issued October 22, 2013.
(xi) TIA 12-4 to NFPA 101, issued October 22, 2013.
(2) [Reserved]
If the REH provides skilled nursing facility services in a distinct part unit, the services furnished by the distinct part unit must be separately licensed and certified and comply with the requirements of participation for long-term care facilities specified in part 483, subpart B, of this chapter.
(c)
(2) Primary roads of travel for determining the driving distance of a CAH and its proximity to other providers is defined as:
(i) A numbered Federal highway, including interstates, intrastates, expressways, or any other numbered Federal highway with 2 or more lanes each way; or
(ii) A numbered State highway with 2 or more lanes each way.
A CAH must protect and promote each patient's rights.
(a)
(2) The hospital must establish a process for prompt resolution of patient grievances and must inform each patient whom to contact to file a grievance. The hospital's governing body must approve and be responsible for the effective operation of the grievance process and must review and resolve grievances, unless it delegates the responsibility in writing to a grievance committee. The grievance process must include a mechanism for timely referral of patient concerns regarding quality of care or premature discharge to the appropriate Utilization and Quality Control Quality Improvement Organization. At a minimum:
(i) The hospital must establish a clearly explained procedure for the submission of a patient's written or verbal grievance to the hospital.
(ii) The grievance process must specify time frames for review of the grievance and the provision of a response.
(iii) In its resolution of the grievance, the hospital must provide the patient with written notice of its decision that contains the name of the hospital contact person, the steps taken on behalf of the patient to investigate the grievance, the results of the grievance process, and the date of completion.
(b)
(2) The patient or their representative (as allowed under state law) has the right to make informed decisions regarding their care. The patient's rights include being informed of their health status, being involved in care planning and treatment, and being able to request or refuse treatment. This right must not
(3) The patient has the right to formulate advance directives and to have hospital staff and practitioners who provide care in the hospital comply with these directives, in accordance with §§ 489.100, 489.102, and 489.104 of this chapter.
(4) The patient has the right to have a family member or representative of their choice and their own physician notified promptly of their admission to the hospital.
(c)
(2) The patient has the right to receive care in a safe setting.
(3) The patient has the right to be free from all forms of abuse or harassment.
(d)
(2) The patient has the right to access their medical records, including current medical records, upon an oral or written request, in the form and format requested by the individual, if it is readily producible in such form and format (including in an electronic form or format when such medical records are maintained electronically); or, if not, in a readable hard copy form or such other form and format as agreed to by the facility and the individual, and within a reasonable time frame. The hospital must not frustrate the legitimate efforts of individuals to gain access to their own medical records and must actively seek to meet these requests as quickly as its record keeping system permits.
(e)
(1)(i) A restraint is—
(A) Any manual method, physical or mechanical device, material, or equipment that immobilizes or reduces the ability of a patient to move their arms, legs, body, or head freely; or
(B) A drug or medication when it is used as a restriction to manage the patient's behavior or restrict the patient's freedom of movement and is not a standard treatment or dosage for the patient's condition.
(C) A restraint does not include devices, such as orthopedically prescribed devices, surgical dressings or bandages, protective helmets, or other methods that involve the physical holding of a patient for the purpose of conducting routine physical examinations or tests, or to protect the patient from falling out of bed, or to permit the patient to participate in activities without the risk of physical harm (this does not include a physical escort).
(ii)
(2) Restraint or seclusion may only be used when less restrictive interventions have been determined to be ineffective to protect the patient a staff member or others from harm.
(3) The type or technique of restraint or seclusion used must be the least restrictive intervention that will be effective to protect the patient, a staff member, or others from harm.
(4) The CAH must have written policies and procedures regarding the use of restraint and seclusion that are consistent with current standards of practice.
(f)
(1) The CAH must provide patient-centered, trauma informed competency-based training and education of CAH personnel and staff, including medical staff, and, as applicable, personnel providing contracted services in the CAH, on the use of restraint and seclusion.
(2) The training must include alternatives to the use of restraint/seclusion.
(g)
(1) With the exception of deaths described under paragraph (g)(2) of this section, the hospital must report the following information to CMS by telephone, facsimile, or electronically, as determined by CMS, no later than the close of business on the next business day following knowledge of the patient's death:
(i) Each death that occurs while a patient is in restraint or seclusion.
(ii) Each death that occurs within 24 hours after the patient has been removed from restraint or seclusion.
(iii) Each death known to the hospital that occurs within 1 week after restraint or seclusion where it is reasonable to assume that use of restraint or placement in seclusion contributed directly or indirectly to a patient's death, regardless of the type(s) of restraint used on the patient during this time. “Reasonable to assume” in this context includes, but is not limited to, deaths related to restrictions of movement for prolonged periods of time, or death related to chest compression, restriction of breathing, or asphyxiation.
(2) When no seclusion has been used and when the only restraints used on the patient are those applied exclusively to the patient's wrist(s), and which are composed solely of soft, non-rigid, cloth-like materials, the hospital staff must record in an internal log or other system, the following information:
(i) Any death that occurs while a patient is in such restraints.
(ii) Any death that occurs within 24 hours after a patient has been removed from such restraints.
(3) The staff must document in the patient's medical record the date and time the death was:
(i) Reported to CMS for deaths described in paragraph (g)(1) of this section; or
(ii) Recorded in the internal log or other system for deaths described in paragraph (g)(2) of this section.
(4) For deaths described in paragraph (g)(2) of this section, entries into the internal log or other system must be documented as follows:
(i) Each entry must be made not later than seven days after the date of death of the patient.
(ii) Each entry must document the patient's name, date of birth, date of death, name of attending physician or other licensed practitioner who is responsible for the care of the patient, medical record number, and primary diagnosis(es).
(iii) The information must be made available in either written or electronic form to CMS immediately upon request.
(e)
(1) The medical staff members of each separately certified CAH in the system (that is, all medical staff members who hold specific privileges to practice at that CAH) have voted by majority, in accordance with medical staff bylaws, either to accept a unified and integrated medical staff structure or to opt out of such a structure and to maintain a separate and distinct medical staff for their respective CAH;
(2) The unified and integrated medical staff has bylaws, rules, and requirements that describe its processes for self-governance, appointment, credentialing, privileging, and oversight, as well as its peer review policies and due process rights guarantees, and which include a process for the members of the medical staff of each separately certified CAH (that is, all medical staff members who hold specific privileges to practice at that CAH) to be advised of their rights to opt out of the unified and integrated medical staff structure after a majority vote by the members to maintain a separate and distinct medical staff for their CAH;
(3) The unified and integrated medical staff is established in a manner that takes into account each member CAH's unique circumstances and any significant differences in patient populations and services offered in each hospital, CAH, and REH; and
(4) The unified and integrated medical staff establishes and implements policies and procedures to ensure that the needs and concerns expressed by members of the medical staff, at each of its separately certified hospitals, CAHs, and REHs, regardless of practice or location, are given due consideration, and that the unified and integrated medical staff has mechanisms in place to ensure that issues localized to particular hospitals, CAHs, and REHs are duly considered and addressed.
(g)
(1) The unified and integrated infection prevention and control and antibiotic stewardship programs are established in a manner that takes into account each member CAH's unique circumstances and any significant differences in patient populations and services offered in each CAH;
(2) The unified and integrated infection prevention and control and antibiotic stewardship programs establish and implement policies and procedures to ensure that the needs and concerns of each of its separately certified CAHs, regardless of practice or location, are given due consideration;
(3) The unified and integrated infection prevention and control and antibiotic stewardship programs have mechanisms in place to ensure that issues localized to particular CAHs are duly considered and addressed; and
(4) A qualified individual (or individuals) with expertise in infection prevention and control and in antibiotic stewardship has been designated at the CAH as responsible for communicating with the unified infection prevention and control and antibiotic stewardship programs, for implementing and maintaining the policies and procedures governing infection prevention and control and antibiotic stewardship as directed by the unified infection prevention and control and antibiotic stewardship programs, and for providing education and training on the practical applications of infection prevention and control and antibiotic stewardship to CAH staff.
(f)
(1) The unified and integrated QAPI program is established in a manner that takes into account each member CAH's unique circumstances and any significant differences in patient populations and services offered in each CAH; and
(2) The unified and integrated QAPI program establishes and implements policies and procedures to ensure that the needs and concerns of each of its separately certified CAHs, regardless of practice or location, are given due consideration, and that the unified and integrated QAPI program has mechanisms in place to ensure that issues localized to particular CAHs are duly considered and addressed.
42 U.S.C. 1302, 1395i-3, 1395x, 1395aa(m), 1395cc, 1395ff, and 1395hh.
(b) * * *
(11) Rural emergency hospitals (REHs).
(i) A hospital;
(ii) A critical access hospital as defined in section 1861(mm)(1) of the Act that has entered into a Medicare provider agreement under section 1866 of the Act; or
(iii) A rural emergency hospital as defined in section 1861(kkk)(2) of the Act.
Environmental Protection Agency (EPA)
Final rule.
The Environmental Protection Agency (EPA) is finalizing particulate matter (PM) emission standards and test procedures applicable to certain classes of engines used by civil subsonic jet airplanes (engines with rated output of greater than 26.7 kilonewtons (kN)) to replace the existing smoke standard for those engines. The EPA is adopting these standards under our authority in the Clean Air Act (CAA). These standards and test procedures are equivalent to the engine standards adopted by the United Nations' International Civil Aviation Organization (ICAO) in 2017 and 2020 and will apply to both new type design aircraft engines and in-production aircraft engines. The EPA, as well as the U.S. Federal Aviation Administration (FAA), actively participated in the ICAO proceedings in which the ICAO requirements were developed. These standards reflect the importance of the control of PM emissions and U.S. efforts to secure the highest practicable degree of uniformity in aviation regulations and standards. Additionally, the EPA is migrating, modernizing, and streamlining the existing regulations into a new part in the Code of Federal Regulations. As part of this update, the EPA is also aligning with ICAO by applying the smoke number standards to engines less than or equal to 26.7 kilonewtons rated output used on supersonic airplanes.
This final rule is effective on December 23, 2022. The incorporation by reference of certain material listed in this rule is approved by the Director of the Federal Register as of December 23, 2022.
The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2019-0660. All documents in the docket are listed on the
Bryan Manning, Office of Transportation and Air Quality, Assessment and Standards Division (ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4832; email address:
This action will potentially affect companies that design and/or manufacture civil subsonic jet aircraft engines with a rated output of greater than 26.7 kN and those that design and/or manufacture civil jet engines with a rated output at or below 26.7 kN for use on supersonic airplanes. These potentially affected entities include the following:
This table lists the types of entities that the EPA is now aware could potentially be affected by this action. Other types of entities not listed in the table could also be regulated. To determine whether your activities are regulated by this action, you should carefully examine the relevant applicability criteria in 40 CFR parts 87, 1030, and 1031. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding
For consistency purposes across the U.S. Code of Federal Regulations (CFR), common definitions for the words “airplane,” “aircraft,” “aircraft engine,” and “civil aircraft” are found at 14 CFR 1.1 and are used as appropriate throughout this new regulation under 40 CFR parts 87, 1030, and 1031.
The EPA is regulating PM emissions from certain aircraft engines through the adoption of domestic PM regulations that match the ICAO PM standards, which will be implemented and enforced in the United States. The covered engines are subsonic turbofan and turbojet aircraft engines with rated output (maximum thrust available for takeoff) of greater than 26.7 kN. These aircraft engines are used by civil subsonic jet airplanes generally for the purpose of commercial passenger and freight aircraft, as well as larger business jets. The EPA is adopting three different forms of PM standards: a PM mass standard in milligrams per kilonewton (mg/kN), a PM number standard in number of particles per kilonewton (#/kN), and a PM mass concentration standard in micrograms per cubic meter (µg/m
First, the EPA is finalizing PM engine emission standards, in the form of both PM mass (mg/kN) and PM number (#/kN), for both new type design and in-production covered engines. The standards for in-production engines apply to those engines that are manufactured on or after January 1, 2023. The standards for new type designs apply to those engines whose initial type certification application is submitted on or after January 1, 2023. The in-production standards have different emission levels limits than the standards for new type designs. The different emission limits for new type designs and in-production engines depend on the rated output of the engines. Compliance with the PM mass and number standards will be done in accordance with the standard landing and take-off (LTO) test cycle, which is currently used for demonstrating compliance with gaseous emission standards (oxides of nitrogen (NO
Second, the EPA is adopting a PM engine emission standard in the form of maximum mass concentration (µg/m
The PM mass concentration standard was developed by ICAO to provide, through a PM mass measurement, the equivalent smoke opacity or visibility control as afforded by the existing smoke number standard for the covered engines. Thus, the EPA is no longer applying the existing smoke number standard for new engines that will be subject to the PM mass concentration standard after January 1, 2023, but the EPA is maintaining smoke number standards for new engines not covered by the PM mass concentration standard (
Third, the EPA is finalizing testing and measurement procedures for the PM emission standards and various updates to the existing gaseous exhaust emissions test procedures. These test procedure provisions will implement the recent additions and amendments to the ICAO's regulations, which are codified in ICAO Annex 16, Volume II. As we have historically done, we are incorporating these test procedure additions and amendments to the ICAO Annex 16, Volume II into our regulations by reference.
The aircraft engine PM standards, test procedures and associated regulatory requirements are equivalent to the international PM standards and test procedures adopted by ICAO in 2017 and 2020 and promulgated in Annex 16, Volume II.
In addition to the PM standards just discussed, the EPA is migrating most of the existing aircraft engine emissions regulations from 40 CFR part 87 to a new 40 CFR part 1031, and all the aircraft engine standards and requirements are specified in this new 40 CFR part 1031. Along with this migration, the EPA is restructuring the regulations to allow for better ease of use and allow for more efficient future updates. The EPA is also deleting some unnecessary definitions and regulatory provisions. Finally, the EPA is adopting several other minor technical amendments to the regulations, including applying smoke number standards to engines of less than or equal to 26.7 kilonewtons (kN) rated output used in supersonic airplanes.
In developing these standards, the EPA took into consideration the Agency's legal authority and the explicit requirements under CAA section 231, including those relating to safety, noise, lead time and costs. The EPA further considered the importance of controlling PM emissions, international harmonization of aviation requirements, and the international nature of the aircraft industry and air travel. In addition, the EPA gave significant weight to the United States' treaty obligations under the Chicago Convention, as discussed in Section II.B, in determining the need for and appropriate levels of PM standards. These considerations led the EPA to conclude that adopting standards for PM emissions from certain classes of
One of the core functions of ICAO is to adopt Standards and Recommended Practices on a wide range of aviation-related matters, including aircraft emissions. As a member State of ICAO, the United States actively participates in the development of new environmental standards, within ICAO's Committee on Aviation Environmental Protection (CAEP), including the PM standards adopted by ICAO in both 2017 and 2020. Due to the international nature of the aviation industry, there is an advantage to working within ICAO to secure the highest practicable degree of uniformity in international aviation regulations and standards. Uniformity in international aviation regulations and standards is a goal of the Chicago Convention, because it ensures that passengers and the public can expect similar levels of protection for safety and human health and the environment regardless of manufacturer, airline, or point of origin of a flight. Further, it helps reduce barriers in the global aviation market, benefiting both U.S. aircraft engine manufacturers and consumers.
When developing new emission standards, ICAO/CAEP seeks to capture the technological advances made in the control of emissions through the adoption of anti-backsliding standards reflecting the current state of technology. The PM standards that the EPA is adopting were developed using this approach. Thus, the adoption of these aviation standards into U.S. law will simultaneously prevent aircraft engine PM levels from increasing beyond their current levels, align U.S. domestic standards with the ICAO standards for international harmonization, and meet the United States' treaty obligations under the Chicago Convention.
These standards will also allow U.S. manufacturers of covered aircraft engines to remain competitive in the global marketplace (as described in Section IV). In the absence of U.S. standards implementing the ICAO aircraft engine PM emission standards, U.S. civil aircraft engine manufacturers could be forced to seek PM emissions certification from an aviation certification authority of another country (not the FAA) to market and operate their aircraft engines internationally. U.S. manufacturers could be at a significant disadvantage if the United States fails to adopt standards that are at least as stringent as the ICAO standards for PM emissions. The ICAO aircraft engine PM emission standards have been adopted by other ICAO member states that certify aircraft engines.
The EPA defines environmental justice as the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies. Section III.G discusses the potential environmental justice concerns associated with exposure to aircraft PM near airports.
Studies have reported that many communities in close proximity to airports are disproportionately represented by people of color and low-income populations (as described in Section III.G). Separate from this rulemaking, the EPA is conducting an analysis of communities residing near airports where jet aircraft operate to more fully understand disproportionately high and adverse human health or environmental effects on people of color, low-income populations, and/or Indigenous peoples. The results of this analysis could help inform additional policies to reduce pollution in communities living in close proximity to airports.
As described in Section V.C, while newer aircraft engines typically have significantly lower emissions than existing aircraft engines, the standards in this final rule are technology-following to align with ICAO's standards and are not expected to, in and of themselves, result in further reductions in PM from these engines. Therefore, we do not anticipate the standards to result in an improvement in air quality for those who live near airports where these aircraft operate.
While the EPA believes that adopting PM standards that match those developed and adopted by ICAO is the proper course of action in this final rule, the EPA views the standards adopted in this action as just one appropriate step in our efforts to control PM emissions from aircraft engines. Consistent with our statutory authority, which directs the EPA to issue, and permits the EPA to revise, standards “from time to time,” CAA section 231(a)(2)(A) and (a)(3), after consultation with the FAA (CAA section 231(a)(2)(B)(i)), the EPA views our regulation of aircraft PM emissions as a long-term process, with the potential for successive standards of increasing stringency. Future stringencies may include technology-forcing standards, where appropriate, provided that such standards do not significantly increase noise and adversely affect safety in accordance with CAA section 231(a)(2)(B)(ii). The EPA intends to continue to assess available emission control technologies and associated lead times, so that if the EPA were to pursue more stringent standards in the future, the EPA would provide the necessary time to permit the development and application of the requisite technology—giving appropriate consideration to the cost of compliance within such period.
The EPA continues to believe that ICAO is the most appropriate venue in which to undertake such work. To that end, the U.S. delegation to ICAO/CAEP, with significant input from EPA, developed a position paper to the CAEP/12 meeting in February 2022.
CAEP did not accept the U.S. request to work on updated aircraft engine NO
This final action is “nationally applicable” within the meaning of CAA section 307(b)(1) because it is expressly listed in the section (
CAA section 307(d)(7)(B) further provides that only an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review. This section also provides a mechanism for the EPA to reconsider the rule if the person raising an objection can demonstrate to the Administrator that it was impracticable to raise such objection within the period for public comment or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule. Any person seeking to make such a demonstration should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, WJC South Building, 1200 Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both the person listed in the
The following portions of this rulemaking are mutually severable from each other: (1) the PM mass concentration standard in Section IV.C; (2) the PM mass and number standards in sections IV.A and IV.B; (3) the test and measurement procedures in Section IV.D; (4) the reporting requirements in Section IV.E; (5) those changes to 40 CFR parts 87 and 1031 described in Section VII that are not intended solely to implement the new PM standards; and (6) the changes to 40 CFR part 1030 described in Section VII.C.
The EPA has been regulating PM emissions from aircraft engines since the 1970s when the first smoke number standards were adopted. This section provides context for the final rule, which adopts three PM standards for aircraft engines (a PM mass standard, a PM number standard, and a PM mass concentration standard). This section includes a description of the EPA's statutory authority, the U.S. role in ICAO and developing international emission standards, and the relationship between the U.S. standards and the ICAO international standards.
CAA section 231(a)(2)(A) directs the Administrator of the EPA to, from time to time, propose aircraft engine emission standards applicable to the emission of any air pollutant from classes of aircraft engines which in his or her judgment causes or contributes to air pollution that may reasonably be anticipated to endanger public health or welfare.
Consistent with its longstanding approach
Thus, as in past rulemakings, the EPA notes its authority under the CAA to issue reasonable aircraft engine standards with either technology-following or technology-forcing results, provided that, in either scenario, the Agency has a reasonable basis after considering all the relevant factors for setting the standard.
The Convention on International Civil Aviation (commonly known as the Chicago Convention) was signed in 1944 at the Diplomatic Conference held in Chicago. It was ratified by the United States on August 9, 1946. The Chicago Convention establishes the legal framework for the development of international civil aviation. The primary objective is “that international civil aviation may be developed in a safe and orderly manner and that international air transport services may be established on the basis of equality of opportunity and operated soundly and economically.”
In the interest of global harmonization and international air commerce, the Chicago Convention urges its member States to “collaborate in securing the highest practicable degree of uniformity in regulations, standards, procedures and organization in relation to aircraft, [. . .] in all matters which such uniformity will facilitate and improve air navigation.”
ICAO's work on the environment focuses primarily on those problems that benefit most from a common and coordinated approach on a worldwide basis, namely aircraft noise and engine emissions. SARPs for the certification of aircraft noise and aircraft engine emissions are covered by Annex 16 of the Chicago Convention. To continue to address aviation environmental issues, in 2004, ICAO established three environmental goals: (1) limit or reduce the number of people affected by significant aircraft noise; (2) limit or reduce the impact of aviation emissions
The Chicago Convention has a number of other features that govern international commerce. First, member States that wish to use aircraft in international transportation must adopt emission standards that are at least as stringent as ICAO's standards if they want to ensure recognition of their airworthiness certificates by other member States. Member States may ban the use of any aircraft within their airspace that does not meet ICAO standards.
ICAO's Committee on Aviation Environmental Protection (CAEP), which consists of members and observers from States as well as intergovernmental and non-governmental organizations representing the aviation industry and environmental interests, undertakes ICAO's technical work in the environmental field. The Committee is responsible for evaluating, researching, and recommending measures to the ICAO Council that address the environmental impacts of international civil aviation. CAEP's terms of reference indicate that “CAEP's assessments and proposals are pursued taking into account: technical feasibility; environmental benefit; economic reasonableness; interdependencies of measures (for example, among others, measures taken to minimize noise and emissions); developments in other fields; and international and national programs.”
The FAA plays an active role in ICAO/CAEP, including serving as the representative (member) of the United States at annual ICAO/CAEP Steering Group meetings, as well as the ICAO/CAEP triennial meetings, and contributing technical expertise to CAEP's working groups. The EPA serves as an advisor to the U.S. member at the annual ICAO/CAEP Steering Group and triennial ICAO/CAEP meetings, while also contributing technical expertise to CAEP's working groups and assisting and advising the FAA on aviation emissions, technology, and environmental policy matters. In turn, the FAA assists and advises the EPA on aviation environmental issues, technology, and airworthiness certification matters.
CAEP's predecessor at ICAO, the Committee on Aircraft Engine Emissions (CAEE), adopted the first international SARPs for aircraft engine emissions which were proposed in 1981.
At the CAEP/10 meeting in 2016, the Committee agreed to the first airplane
At the CAEP/10 and CAEP/11 meetings in 2016 and 2019, the Committee agreed to three different forms of international PM standards for aircraft engines. Maximum PM mass concentration standards were agreed to at CAEP/10, and PM mass and number standards were agreed to at CAEP/11. ICAO adopted the PM maximum mass concentration standards in 2017 and the PM mass and number standards in 2020. The CAEP/10 PM standards apply to in-production engines on or after January 1, 2020, and the CAEP/11 PM standards apply to new-type and in-production engines on or after January 1, 2023. In addition to CAEP/10 agreeing to a maximum PM mass concentration standard, CAEP/10 adopted a reporting requirement where aircraft engine manufacturers were required to provide PM mass concentration, PM mass, and PM number emissions data—and other related parameters—by January 1, 2020 for in-production engines.
Domestically, as required by the CAA, the EPA has been engaged in reducing harmful air pollution from aircraft engines for over 40 years, regulating gaseous exhaust emissions, smoke, and fuel venting from engines.
For many years the EPA has regulated aircraft engine PM emissions with smoke number standards.
Internationally, the EPA and the FAA have worked within the standard-setting process of ICAO (CAEP and its predecessor, CAEE) since the 1970s to help establish international emission standards and related requirements, which individual member States adopt into domestic law and regulations. Historically, under this approach, international emission standards have first been adopted by ICAO, and subsequently the EPA has initiated rulemakings under CAA section 231 to establish domestic standards that are harmonized with ICAO's standards. After the EPA promulgates aircraft engine emission standards, CAA section 232 requires the FAA to issue regulations to ensure compliance with the EPA aircraft engine emission standards when certificating aircraft pursuant to its authority under title 49 of the U.S. Code. This rulemaking will continue this historical rulemaking approach.
The EPA and FAA worked from 2009 to 2019 within the ICAO/CAEP standard-setting process on the development of the three different forms of international aircraft engine PM emission standards (a PM mass concentration standard, a PM mass standard, and a PM particle number standard). In this action, we are adopting PM standards equivalent to ICAO's three different forms of aircraft engine PM emission standards. Adoption of these standards will meet
In December 2018, the EPA issued an information collection request (ICR) that matches the CAEP/10 PM reporting requirements described in Section II.B.
Particulate matter (PM) is a highly complex mixture of solid particles and liquid droplets distributed among numerous atmospheric gases which interact with solid and liquid phases. Particles range in size from those smaller than 1 nanometer (10
Particles span many sizes and shapes and may consist of hundreds of different chemicals. Particles are emitted directly from sources and are also formed through atmospheric chemical reactions between PM precursors; the former are often referred to as “primary” particles, and the latter as “secondary” particles. Particle concentration and composition varies by time of year and location, and, in addition to differences in source emissions, is affected by several weather-related factors, such as temperature, clouds, humidity, and wind. Ambient levels of PM are also impacted by particles' ability to shift between solid/liquid and gaseous phases, which is influenced by concentration, meteorology, and especially temperature.
Fine particles are produced primarily by combustion processes and by transformations of gaseous emissions (
Particulate matter is comprised of both volatile and non-volatile PM. PM emitted from the engine is known as non-volatile PM (nvPM), and PM formed from transformation of an engine's gaseous emissions are defined as volatile PM.
“During the combustion of hydrocarbon-based fuels, aircraft engines generate gaseous and particulate matter (PM) emissions. At the engine exhaust, particulate emissions consist mainly of ultrafine soot or black carbon emissions. These particles, referred to as “non-volatile” PM (nvPM), are present at high temperatures, in the engine exhaust. Compared to conventional diesel engines, gas turbine engines emit non-volatile particles of smaller mean diameter. Their characteristic size ranges roughly from 15 to 60 nanometers. . . . These particles are invisible to the human eye and are ultrafine.” (page 98.)
“Additionally, gaseous emissions from engines can also condense to produce new particles (
Scientific studies show exposure to ambient PM is associated with a broad range of health effects. These health effects are discussed in detail in the U.S. EPA's Integrated Science Assessment for Particulate Matter (PM ISA), which was finalized in December 2019 (2019 PM ISA), with a more targeted evaluation of studies published since the literature cutoff date of the 2019 PM ISA in the Supplement to the Integrated Science Assessment for PM (Supplement).
The 2019 PM ISA concludes that human exposures to ambient PM
The EPA has concluded that recent evidence in combination with evidence evaluated in the 2009 PM ISA supports a “causal relationship” between both long- and short-term exposures to PM
More detailed information on the health effects of PM can be found in a memorandum to the docket.
Environmental effects that can result from particulate matter emissions include visibility degradation, plant and ecosystem effects, deposition effects, and materials damage and soiling. These effects are briefly summarized here and discussed in more detail in the memo to the docket cited in Section III.B.
PM
Several significant ecological effects are associated with deposition of chemical constituents of ambient PM such as metals and organics.
Deposition of PM is associated with both physical damage (materials damage effects) and impaired aesthetic qualities (soiling effects). Wet and dry deposition of PM can physically affect materials, adding to the effects of natural weathering processes, by potentially promoting or accelerating the corrosion of metals, by degrading paints and by deteriorating building materials such as stone, concrete and marble.
Airport activity can adversely impact air quality in the vicinity of airports. Furthermore, these adverse impacts may disproportionately impact sensitive subpopulations. A recent study by Yim et al (2015) assessed global, regional, and local health impacts of civil aviation emissions, using modeling tools that address environmental impacts at different spatial scales.
A significant body of research has addressed pollutant levels and potential health effects in the vicinity of airports. Much of this research was synthesized in a 2015 report published by the Airport Cooperative Research Program (ACRP), conducted by the Transportation Research Board.
Furthermore, the report states that “existing studies indicate that ultrafine particle concentrations are highly elevated at an airport (
Since the publication of the 2015 ACRP literature review, a number of studies conducted in the United States have been published which concluded that ultrafine particle number concentrations were elevated downwind of commercial airports, and that proximity to an airport also increased particle number concentrations within residences. Hudda et al. investigated ultrafine particle number concentrations (PNC) inside and outside 16 residences in the Boston metropolitan area. They found elevated outdoor PNC within several kilometers of the airport. They also found that aviation-related PNC infiltrated indoors and resulted in significantly higher indoor PNC.
Because of these potential impacts, a systematic literature review was recently conducted to identify peer-reviewed literature on air quality near commercial airports and assess the quality of the studies.
A systematic review of health effects associated with exposure to jet engine emissions in the vicinity of airports was also recently published.
This section provides background on the contribution of aircraft engine emissions to local PM concentrations. In some areas with large commercial airports, turbine engine aircraft can make a significant contribution to ambient PM
In addition to particulate matter, a number of other criteria pollutants are emitted by the aircraft subject to this final rule. These pollutants, which are not covered by the rule, include NO
The term polycyclic organic matter (POM) defines a broad class of compounds that includes the polycyclic aromatic hydrocarbon compounds (PAHs). POM compounds are formed primarily from combustion and are present in the atmosphere in gas and particulate form. Metal compounds emitted from aircraft turbine engine combustion include chromium, manganese, and nickel. Several POM compounds, as well as hexavalent chromium, manganese compounds and nickel compounds are included in the National Air Toxics Assessment, based on potential carcinogenic risk.
The EPA's June 2016 “Technical Guidance for Assessing Environmental Justice in Regulatory Analysis” provides recommendations on conducting the highest quality analysis feasible, recognizing that data limitations, time and resource constraints, and analytic challenges will vary by media and regulatory context.
When assessing the potential for disproportionately high and adverse health or environmental impacts of regulatory actions on minority populations, low-income populations, tribes, and/or Indigenous peoples, the EPA strives to answer three broad questions: (1) Is there evidence of potential EJ concerns in the baseline (the state of the world absent the regulatory action)? Assessing the baseline will allow the EPA to
The EPA's 2016 Technical Guidance does not prescribe or recommend a specific approach or methodology for conducting an environmental justice analysis, though a key consideration is consistency with the assumptions underlying other parts of the regulatory analysis when evaluating the baseline and regulatory options. Where applicable and practicable, the Agency endeavors to conduct such an analysis. Going forward, the EPA is committed to conducting environmental justice analysis for rulemakings based on a framework similar to what is outlined in the EPA's Technical Guidance, in addition to investigating ways to further weave environmental justice into the fabric of the rulemaking process.
Numerous studies have found that environmental hazards such as air pollution are more prevalent in areas where people of color and low-income populations represent a higher fraction of the population compared with the general population, including near transportation sources.
As described in Section III.D, concentrations of PM increase with proximity to an airport. Air pollution can disproportionately impact sensitive subpopulations near airports. Henry et al. (2019) studied impacts of several California airports on surrounding schools and found that over 65,000 students spend 1 to 6 hours a day during the academic year being exposed to airport pollution, and the percentage of impacted students was higher for those who were economically disadvantaged.
Additional studies have reported that many communities in close proximity to airports are disproportionately represented by minorities and low-income populations. McNair (2020) describes nineteen major airports that underwent capacity expansion projects between 2000 and 2010, thirteen of which met characteristics of race, ethnicity, nationality and/or income that indicate a disproportionate impact on these residents.
Although not being conducted as part of this rulemaking, the EPA is conducting a demographic analysis to explore whether populations living nearest the busiest runways show patterns of racial and socioeconomic disparity.
The final in-production standards for both PM mass and PM number are levels that all aircraft engines in production currently meet to align with ICAO's standards. Thus, the final standards are not expected to result in emission reductions, beyond the business-as-usual fleet turnover that would occur absent the final standards. Therefore, we do not anticipate an improvement in air quality for those who live near airports where these aircraft operate, beyond what may occur as a result of fleet turnover and from any reductions in emissions from other sectors contributing to air quality near airports.
Response to comments on Section III of this action can be found in the Response to Comments document. In addition, all website addresses for references cited in this section are provided in a memorandum to the docket.
In determining what final PM standards are appropriate under CAA section 231 and after consultation with FAA, the EPA considered the level of standards that could be met with the application of requisite technology within the necessary period of time that would allow the United States to meet its obligations under the Chicago Convention to at least match the ICAO standards, and gave appropriate consideration to the cost of compliance within this period. This determination also took into account the requirement that EPA's revised standards not significantly increase noise and adversely affect safety. The EPA considered the statutory requirements in CAA section 231 and other relevant factors as described in Section VI of both the proposed rule and this final rule, and we concluded that it was reasonable and appropriate to finalize the new PM standards that match the international standards in scope, stringency, and effective date. The EPA has consulted with FAA and believes sufficient lead time has been provided since the technology has already been developed and implemented by manufacturers to comply with the new PM standards. Also, as described in Section IV.F.1, the EPA is confident that the final standards will not significantly increase noise and adversely affect
These considerations led the EPA to determine that adopting aircraft engine PM standards based on engine standards adopted by ICAO is appropriate at this time. When developing the PM standards, ICAO adopted three different methods of measuring the amount of PM emitted. The first is PM mass, or a measure of the total weight of the particles produced over the test cycle. This is how the EPA has historically set PM emission standards for other sectors. The second is PM number, or the number of particles produced by the engine over the test cycle. These are two different methods of measuring the same pollutant, PM, but each provides distinct and valuable information. Third, ICAO developed PM mass concentration standards, as a replacement to the existing standards based on smoke number.
The EPA's final action will apply to subsonic turbofan and turbojet engines of a type or model with a rated output (maximum thrust available for takeoff) greater than 26.7 kN, hereinafter referred to as covered engines, and consists of three key parts: (1) PM mass and number emission standards for covered engines, (2) a change in test procedure and form of the existing standards for covered engines—from smoke number to PM mass concentration, and (3) new testing and measurement procedures for the PM emission standards and various updates to the existing gaseous exhaust emissions test procedures.
Sections IV.A through IV.C describe the final mass, number, and mass concentration standards for aircraft engines. Section IV.D describes the test procedures and measurement procedures associated with the PM standards. Section IV.E presents information related to the reporting requirements.
As discussed in Section III.A, PM
Due to the international nature of the aviation industry, there is an advantage to working within ICAO to secure the highest practicable degree of uniformity in international aviation regulations and standards. Uniformity in international aviation regulations and standards is a goal of the Chicago Convention, because it ensures that passengers and the public can expect similar levels of protection for safety and human health and the environment regardless of manufacturer, airline, or point of origin of a flight. Further, it helps prevent barriers in the global aviation market, benefiting both U.S. aircraft engine manufacturers and consumers.
When developing new emission standards, ICAO/CAEP seeks to capture the technological advances made in the control of emissions through the adoption of anti-backsliding standards reflecting the current state of technology. The PM standards the EPA is adopting were developed using this approach. Thus, the adoption of these aircraft engine standards into U.S. law will simultaneously prevent aircraft engine PM levels from increasing beyond their current levels, align U.S. domestic standards with the ICAO standards for international harmonization, meet the United States' treaty obligations under the Chicago Convention.
These standards will also allow U.S. manufacturers of covered aircraft engines to remain competitive in the global marketplace. The ICAO aircraft engine PM emission standards have been, or are being, adopted by other ICAO member states that certify aircraft engines. In the absence of U.S. standards implementing the ICAO aircraft engine PM emission standards, the United States would not be able to certify aircraft engines to the PM standards. In this case, U.S. civil aircraft engine manufacturers could be forced to seek PM emissions certification from an aviation certification authority of another country to market and operate their aircraft engines internationally. Foreign certification authorities may not have the resources to certify aircraft engines from U.S. manufacturers in a timely manner, which could lead to delays in these engines being certified. Thus, U.S. manufacturers could be at a disadvantage if the United States does not adopt standards that are at least as stringent as the ICAO standards for PM emissions. This action to adopt, in the United States, PM standards that match the ICAO standards will help ensure international consistency and acceptance of U.S.-manufactured engines worldwide.
The EPA considered whether to propose standards more stringent than the ICAO standards. See 87 FR 6324, 6337 (February 3, 2022). As noted in the preceding paragraphs, the EPA, after consultation with FAA, considered the statutory requirements under CAA section 231, the importance of controlling PM emissions, international harmonization of aviation requirements, the international nature of the aircraft industry and air travel, and the United States' obligations under the Chicago Convention in evaluating which stringency of standards to propose. These considerations have historically led the EPA to adopt international standards developed through ICAO. The EPA concluded that proposing and now adopting standards equivalent to the ICAO PM standards in place of more stringent standards is appropriate in part because international uniformity and regulatory certainty are important elements of these standards. This is especially true for these final standards because they change our approach to regulating aircraft PM emissions from past smoke measurements to the measurement of nvPM mass concentration, nvPM mass, and nvPM number for the first time. It is
These standards for PM mass, like the ICAO standards, will apply to covered engines whose date of manufacture is on or after January 1, 2023.
The level of the standard will vary based on when the initial type certification application is submitted.
Covered engines manufactured on or after January 1, 2023 will be subject to the in-production level, in Section IV.A.3.
Covered engines whose initial type certification application is submitted to the FAA on or after January 1, 2023 shall not exceed the level, as defined by Equation IV-1. As described in Section IV.D, the nvPM mass limit is based on milligram (mg) of PM, as determined over the LTO cycle, divided by kN of rated output (rO).
Covered engines that are manufactured on or after January 1, 2023 shall not exceed the level, as defined by Equation IV-2.
Figure IV-1 shows how the nvPM mass emission limits compare to known in-production engines. Data shown in this figure is from the ICAO Engine Emissions Databank (EEDB)
These standards for PM number, like the ICAO standards, will apply to covered engines whose date of manufacture is on or after January 1, 2023.
The level of the standard will vary based on when the initial type certification application is submitted. Covered engines for which the type certificate application was first submitted on or after January 1, 2023 will be subject to the new type level in Section IV.B.2. These are new engines that have not been previously certificated.
Covered engines manufactured on or after January 1, 2023 will be subject to the in-production level, in Section IV.B.3.
Covered engines whose initial type certification application is submitted to the FAA on or after January 1, 2023 shall not exceed the level, as defined by Equation IV-3. As described in Section IV.D, the nvPM number limit is based on number of particles, as determined over the LTO cycle, divided by kN of rO.
Covered engines that are manufactured on or after January 1, 2023 shall not exceed the level, as defined by Equation IV-4.
Figure IV-2 shows how the nvPM number emission limits compare to known in-production engines. Data shown in this figure is from the ICAO Engine Emissions Databank (EEDB).
The previous smoke number-based standards were adopted to reduce the visible smoke emitted by aircraft engines. Smoke number is quantified by measuring the opacity of a filter after soot has been collected upon it during the test procedure. Another means of quantifying the smoke from an engine exhaust is through PM mass concentration (PM
ICAO developed a PM mass concentration standard during the CAEP/10 cycle and adopted it in 2017.
While the ICAO PM mass concentration standard was intended to have equivalent visibility control as the existing smoke number standard, the method used to derive it was based on limited data and needed to be confirmed for regulatory purposes. Additional analysis was conducted during the CAEP/11 cycle to confirm this equivalence. The EPA followed this work as it progressed, provided input
The EPA is adopting a PM mass concentration standard for all covered engines manufactured on or after January 1, 2023.
To determine compliance with the PM mass concentration standard, the maximum nvPM mass concentration [μg/m
Engines certificated under the new PM mass concentration standard will not need to certify smoke number values and will not be subject to in-use smoke standards. It is important to note that other smoke number standards remain in effect for turbofan and turbojet aircraft engines at or below 26.7 kN rated output and for turboprop engines. Also, the in-use smoke standards will continue to apply to some already manufactured aircraft engines that were certified to smoke number standards. In this final rule, the EPA did not reexamine or reopen the existing smoke number standards. Any comments we received on the existing smoke number standards are beyond the scope of this rulemaking.
Figure IV-3 shows how the nvPM mass concentration emission limits compare to known in-production engines, which all were certified to the previous smoke standard. Data shown in this figure is from the ICAO Engine Emissions Databank (EEDB).
When developing the PM standards, ICAO adopted three different methods of measuring the amount of PM emitted. The first is PM mass, or a measure of the total weight of the particles produced over the test cycle. This is how the EPA has historically measured PM emissions subject to standards for other sectors. The second is PM number, or the number of particles produced by the engine over the test cycle. These are two different methods of measuring the same pollutant, PM, but each provides valuable information. Third, ICAO developed PM mass concentration standards, as an alternative to the existing visibility standards based on smoke.
The EPA is incorporating by reference the metrics agreed at ICAO and incorporated into Annex 16 Volume II, to measure PM mass (Equation IV-6) and PM number (Equation IV-7). These metrics are based on a measurement of the nvPM emissions, as measured at the instrument, over the LTO cycle and is normalized by the rated output of the engine (rO).
The EPA is adopting the PM mass concentration standard based on the maximum mass concentration, in micrograms per meter cubed, produced by the engine at any thrust setting.
Regulatory compliance with the emission standards is based on the product of Equation IV-6 or Equation IV-7 or mass concentration divided by the appropriate factor from Table IV-2, to obtain the characteristic level that is used to determine compliance with emission standards (see Section IV.D.4).
The EPA is incorporating by reference the PM test and measurement procedures in ICAO Annex 16, Volume II. These procedures were developed in conjunction with the Society of Automotive Engineers (SAE) E-31 Aircraft Exhaust Emissions
These procedures build off the existing ICAO Annex 16, Volume II aircraft engine measurement procedures for gaseous pollutants. As described in the Annex 16, at least three engine tests need to be conducted to determine the emissions rates. These tests can be conducted on a single engine or multiple engines.
The methodology for measuring PM from aircraft engines differs from certain other EPA test procedures for mobile source PM
Second, the sample is measured continuously rather than being collected on a filter and measured after the test. This approach was taken primarily for the practical reasons that, due to high dilution rates leading to relatively low concentrations of PM in the sample, collecting enough particulate on a filter to analyze has the potential to take hours. Given the high fuel flow rates of these engines, such lengthy test modes would be very expensive. Additionally, because of the high volume of air required to run a jet engine and the extreme engine exhaust temperatures, it is not possible to collect the full exhaust stream in a controlled manner as is done for other mobile source PM
Included in the procedures now incorporated by reference by the EPA are measurement system specifications and requirements, instrument specifications and calibration requirements, fuel specifications, and corrections for fuel composition, dilution, and thermophoretic losses in the collection part of the sampling system.
To create a uniform sampling system design that works across gas turbine engine testing facilities, the test procedure calls for a 35-meter sample line. This results in a significant portion of the PM being lost in the sample lines, on the order of 50 percent for PM mass and 90 percent for PM number. These particle losses in the sampling system are not corrected for in the standards. Compliance with the standard is based on the measurement at the instruments rather than the exit plane of the engine (instruments are 35 meters from engine exit). This is due to the lack of robustness of the sampling system particle loss correction methodology and that a more stringent standard at the instrument will lead to a reduction in the nvPM emissions at the engine exit plane. A correction methodology has been developed to better estimate the actual PM emitted into the atmosphere. This correction is described in Section V.A.2.
Mass and number PM emissions are measured over the LTO cycle shown in Table IV-1. This is the same duty cycle used to measure gaseous emissions from aircraft engines and is intended to represent operations and flight under an altitude of 3,000 feet near an airport. Emissions rates for each mode can be calculated by testing the engine(s) over a sufficient range of thrust settings such that the emission rates at each condition in Table IV-1 can be determined.
The
The EPA is incorporating by reference ICAO's Annex 16 to the Convention on International Civil Aviation, Environmental Protection, Volume II—Aircraft Engine Emissions, Fourth Edition, July 2017.
EPA is incorporating by reference Appendix 6 to ICAO Annex 16, Volume II—International Standards and Recommended Practices for correcting engine measurements to characteristic value. Like existing gaseous standards, compliance with the PM standards adopted in this action is based on the characteristic level of the engine. The characteristic level is a statistical
Table IV-2 is reproduced from Annex 16 Volume II Appendix 6 Table A6-1 and shows how these factors change based on the number of engines tested.
For PM mass and PM number, the characteristic level is based on the mean of all engines tested, and appropriately corrected, divided by the factor corresponding to the number of engine tests performed in Table IV-1. For PM mass concentration, the characteristic level is based on the mean of the maximum values of all engines tested, and appropriately corrected, divided by the factor corresponding to the number of engine tests performed in Table IV-2.
For example, an engine type where three measurements were obtained from the same engine has an nvPM mass metric value of 100 mg/kN (mean metric value of all engine tests). The nvPM LTO mass factor (or nvPM mass characteristic factor) from Table IV-2 for three engines is 0.7194. The metric value, with applicable corrections applied, is then divided by the factor to obtain the characteristic level of the engine. Therefore, the resulting characteristic level for this engine type, to determine compliance with the nvPM mass standard is 139.005 mg/kN. If instead three engines are each tested once, the characteristic factor would be 0.8858 and the nvPM mass characteristic level to determine compliance with the standard would be 112.892 mg/kN.
An engine type's characteristic level can also be further improved by testing additional engines. For example, if 10 separate engines were tested of the same type, the nvPM mass characteristic factor becomes 0.9375. The resulting characteristic level (assuming the average nvPM mass metric value remains 100 mg/kN) would be 106.667 mg/kN. This approach could be used if an engine exceeds the standard at the time it is initially tested or there is a desire to increase the margin to the standard for whatever reason. Table IV-3 shows these three different examples for nvPM LTO Mass.
Aircraft engine types can remain in production for many years and be subject to numerous modifications during their production life. As part of the certification process for any change, the type certificate applicant will need to show if the change will have an impact the engine emissions. While some of these changes could impact engine emissions rates, many of them will not. To simplify the certification process and reduce burden on both type certificate applicant and certification authorities, ICAO developed criteria to determine whether there has been an emissions change that requires new testing. Such criteria already exist at ICAO and in the EPA regulations for gaseous and smoke standards.
ICAO recommends
ICAO evaluated the measurement uncertainty to develop criteria for determining if a proposed derivative engine's emissions are similar to the previously certificated engine's emissions. The EPA is adopting these ICAO criteria in this final rule.
For PM mass measurements described in Section IV.A, the following values apply:
• 80 mg/kN if the characteristic level for nvPM
• ±20% of the characteristic level if the characteristic level for nvPM
For PM number measurements, described in Section IV.B, the following values apply:
• 4×10
• ±20% of the characteristic level if the characteristic level for nvPM
For PM mass concentration measurements described in Section IV.C, the following values apply:
• ±200 μg/m
• ±20% of the characteristic level if the characteristic level for maximum nvPM mass concentration is at or above 1,000 μg/m
If a type certificate applicant can demonstrate that the engine's emissions are within these ranges, then new emissions rates will not need to be developed and the proposed derivative engine for emissions certification purposes will keep the existing emissions rates.
If the engine is not determined to be a derivative engine for emissions certification purposes, the type certificate applicant will need to certify the new emission rates for the engine.
In 2012, the EPA adopted an annual reporting requirement as part of a rulemaking to adopt updated aircraft engine NO
The EPA uses the collection of information to help conduct technology assessments, develop aircraft emission inventories (for current and future inventories), and inform our policy decisions—including future standard-setting actions. The information enables the EPA to further understand the characteristics of aircraft engines that are subject to emission standards—and engines subject to the PM emission standards—and engines' impact on emission inventories. In addition, the information helps the EPA set appropriate and achievable emission standards and related requirements for aircraft engines. Annually updated information helps in assessing technology trends and their impacts on national emissions inventories. Also, it assists the EPA to stay abreast of developments in the aircraft engine industry.
As discussed in Section VII, the EPA is finalizing the proposal to migrate the existing 40 CFR part 87 regulatory text to a new 40 CFR part 1031. This effort includes clarifying portions of the regulatory text for ease of use. In the old 40 CFR 87.42(c)(6), the regulatory text did not specifically spell out some required data, but instead relied on incorporation by reference of ICAO Annex 16, Volume II's data reporting requirements and listed the data from this Annex that is not required by the EPA's reporting requirement. For future ease of use, 40 CFR 1031.150 explicitly lists all the required items rather than continuing the incorporation by reference approach in the existing reporting regulations. Finally, the EPA is incorporating by reference Appendix 8 of Annex 16, Volume II, which outlines procedures used to estimate measurement system losses, which are a required element of the reporting provisions.
The EPA received numerous comments on the proposed rulemaking
In this action, the EPA is aiming to minimize disruption by finalizing this action before the January 1, 2023, the international effective date of the PM mass and number standards.
For comparison, the EPA notes the EPA finalized the domestic GHG standards for airplanes on January 11, 2021, after the international effective date for new type planes;
However, in the EPA's view, ICAO's use of TRL8 to define technological feasibility is not the only means to ensure a standard does not adversely affect safety and does not significantly increase noise. The EPA does not view TRL8 to represent the most stringent level of technology that could be required in an EPA aircraft standard setting rulemaking. Nor does the EPA agree with the premise that standards based on technology below TRL8 would necessarily be technology forcing or inherently have a negative effect on safety and noise. In establishing U.S. aircraft engine emission standards, the EPA is not constrained to ICAO's definition of technological feasibility in assessing appropriate aircraft engine standards under CAA section 231(a).
As described in Section II.A, CAA section 231(a)(2)(A) directs the Administrator of the EPA to, from time to time, propose aircraft engine emission standards applicable to the emission of any air pollutant from classes of aircraft engines which in the Administrator's judgment causes or contributes to air pollution that may reasonably be anticipated to endanger public health or welfare. CAA section 231(a)(3) provides that after the EPA proposes standards, the Administrator shall issue such standards “with such modifications as he deems appropriate.” CAA section 231(b) requires that any emission standards “take effect after such period as the Administrator finds necessary . . . to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance during such period.” The D.C. Circuit has held that the delegation of authority in CAA section 231 “is both explicit and extraordinarily broad” and that the text confers “broad discretion . . . to weigh various factors in arriving at appropriate standards.”
The statutory language of CAA section 231 is not identical to other provisions in the CAA that direct the EPA to establish technology-based standards. CAA section 231(a) states that the EPA must “issue proposed emission standards applicable to the emission of any air pollutant” from aircraft engines
CAA section 231 lacks comparable language requiring it to meet a particular threshold of protectiveness, emission reduction, or technological stringency, despite this clear evidence that Congress knew how to impose such obligations when it wished.
Some commenters also presented a textual comparison of the House and Senate bills to conclude that Congress intended for CAA section 231 to be based on a consideration of pollution impacts and technological feasibility because the final CAA section 231(a)(1) required the EPA to conduct a study within 90 days after December 31, 1970 of air pollutants from aircraft to determine impact on air quality and technological feasibility of controlling such pollutants. S. Rep. No. 91-1196, at 24, 1 Leg. Hist. at 424; H.R. Rep. No. 91-1783, at 55 (Conf. Rep.). One commenter alleged this means “the necessary premise [is] that such study should inform the standards themselves.”
The commenters also quoted to a Senate report accompanying the CAA 1970 amendment Senate bill to suggest CAA section 231 requires standards to be based on the degree of harm caused by aircraft pollution and the technology that can be developed in the future to reduce it. The statement cited by commenters from the Senate Report does not constrain the EPA where the plain text of the statute does not, and where Congress knew how, but declined, to make such constraints mandatory on the Agency. “Congress' authoritative statement is the statutory text, not the legislative history.”
The EPA's interpretation of CAA section 231 is not categorically at odds with the Clean Air Act's general protective purpose. The Act's general goal of reducing air pollution does not, in itself, prescribe regulatory factors for specific programs, nor does it restrict the EPA's discretion as to how best effectuate that goal in a specific action or in a regulatory program over time. Accordingly, while the EPA's discretion under CAA section 231 would allow it to select more stringent standards when appropriate, it does not mandate that the EPA elevate pollution reduction over all relevant factors in the consideration of any particular aircraft standard.
The final PM standards fall squarely within the EPA's statutory authority under CAA section 231 to promulgate. As described in Section I.B.2 and the introductory text of Section IV, in proposing and adopting the final PM standards, the EPA considered the statutory requirements of CAA section 231. The EPA also took into account the need to control PM emissions, the importance of international harmonization, avoiding adverse impacts that could result from delaying adoption of PM standards at least as stringent as ICAO's PM standards, and gaining experience from the novel approach to implementing PM standards. Further, based on the EPA's independent view that technology at the TRL8 has been demonstrated to be safe and of an acceptable noise-level, the EPA is confident that the final standards will not significantly increase noise or adversely affect safety. The EPA reached the same conclusion as ICAO that a new noise and safety analysis was not necessary. For the same reasons, the EPA believes sufficient lead time has been provided since the technology has already been developed. Costs information for the standards is described in Section VI.D. Based on this assessment, the EPA concludes that it is reasonable to finalize PM standards that match the international standards in scope, stringency, and effective date.
Additional legal issues raised by these comments are addressed in the Response to Comments document.
The EPA believes that the limited scope of the proposal is permissible under CAA section 231 and, based on the plain language of the statute, disagrees with the premise that the statute requires the Agency to propose multiple levels of stringency of standards. To the extent commenters identified specific alternative levels of stringency they would prefer, the comments did not provide sufficient information about safety, noise, lead time, and costs of those alternatives to support the EPA finalizing more stringent standards in this rulemaking. In light of the reasons the EPA has provided for adopting the PM standards as proposed, the EPA does not view these “modifications” requested by commenters to be “appropriate” to incorporate into the PM standards adopted in this rulemaking. See CAA section 231(a)(3). The EPA's current and intended future work related to addressing PM emissions from aircraft engines is described in Section I.C.
A number of commenters also provided suggested ideas for alternative methods to regulating PM emissions (
Having invested significant effort and resources, working with the FAA and the Department of State, to gain international consensus within ICAO to adopt the international PM standards for aircraft engines, the EPA believes that meeting the United States' obligations under the Chicago Convention by aligning domestic standards with the ICAO standards, rather than adopting more stringent standards, will have substantial benefits for future international cooperation on aircraft engine emission standards, and such cooperation is the key for achieving worldwide emission reductions. Deviating from the international PM standards could undermine future efforts by the United States to seek international consensus on aircraft emission standards in general, including more stringent future standards for PM. Reaching this conclusion is not tantamount to a determination that it would never be appropriate for the EPA to adopt more stringent PM standards than ICAO's standards. However, at this time, the EPA finds it appropriate to finalize the standards as proposed.
In addition, the ICAO applicability date of the mass and number standards of January 1, 2023, is fast approaching. The U.S. aircraft engine manufacturers, aircraft manufacturers, and airlines are urging the EPA to promptly promulgate this final rulemaking to adopt ICAO's standards, which were adopted back in 2017 and 2020, so they can build (and sell) or have access to U.S. engines to remain competitive in the global marketplace. Furthermore, the EPA understands that U.S. aircraft engine manufacturers need time to certify their products, after the subsequent FAA rulemaking to enforce the standards, to ensure the aircraft engines comply with standards. Also, the EPA did not conduct the analyses needed to support more stringent standards in the proposed rulemaking, or otherwise develop a sufficient record for more stringent standards, that would be necessary to support finalizing such standards in this final rule. We do not believe we could finalize more stringent standards without conducting significant additional analyses and undertaking a new round of notice and comment, which would certainly cause a significant delay in meeting the United States' obligations under the Chicago Convention. We have decided that the most appropriate course, under CAA section 231, is to adopt aircraft engine PM standards that are harmonized with the standards adopted by ICAO in 2017 and 2020.
In determining what final PM standards are appropriate under CAA section 231 and after consultation with FAA, the EPA considered the level of standards that could be met with the application of requisite technology within the necessary period of time that would allow the United States to meet its obligations under the Chicago Convention to at least match the ICAO standards, and gave appropriate consideration to the cost of compliance within this period. This determination also took into account the requirement
The EPA disagrees that the standards are not anti-backsliding. Although the PM mass concentration standard is replacing the smoke standard for some engines, the PM mass and number standards are the first of their kind. In that regard, PM mass and number are currently unregulated from aircraft engines and the standards finalized in this action represent a new regulatory backstop of those two forms of previously uncontrolled PM emissions. Further, all three PM standards will prevent backsliding by ensuring that all new type design and in-production aircraft engines will not exceed those regulatory levels in the future.
CAEP meets triennially, and in the future, we anticipate ICAO/CAEP considering more stringent aircraft engine PM standards. The U.S. Interagency Group on International Aviation (IGIA) facilitates coordinated recommendations to the Secretary of State on issues pertaining to international aviation (and ICAO/CAEP), and the FAA is the chair of IGIA. Representatives of domestic states, non-governmental organizations, and industry can participate in IGIA to provide input into future standards for ICAO/CAEP. U.S. manufacturers will be better prepared for any future standard change due to their experience with measuring nvPM mass and number for the first time for these final standards. The PM standards adopted in this rulemaking, within the larger context of international aircraft standard-setting, send an important signal that PM emissions is a factor that manufacturers need to consider when building aircraft engines now and going forward—with the anticipation that ICAO/CAEP will consider more stringent PM standards in the future.
In response to the comments that the standards are far less stringent than PM emission levels of existing aircraft engine technologies, the EPA notes that there is a wide range of PM levels for in-production aircraft engines. As described in Section VI.C, for some manufacturers new technologies aimed at reducing aircraft engine NO
The need for direct cooperation between countries gave rise to ICAO, an active regulatory body that sets and revises standards. As described in Section II.B, ICAO's work on the environment focuses primarily on those problems that benefit most from a common and coordinated approach on a worldwide basis, namely aircraft noise and engine emissions. Compliance with ICAO's standards, including its emission standards, is essential to ensure acceptance by other countries as people, aircraft, and cargo move in international commerce. The EPA recognizes nations have authority to vary from ICAO standards, provided they give the required notice. Also, the EPA has not concluded that the unique features of the aviation industry necessitate a policy to never adopt more stringent emission standards compared to ICAO standards. However, adopting more stringent PM standards than ICAO's PM standards, which change the approach to regulating aircraft engine PM emissions, would risk disruption to international cooperation. The EPA considered the timing of the ICAO PM mass and number standards for new type design and in-production engines, which have a January 1, 2023 implementation date. Given the limited time frame and potential implications of the EPA not adopting a standard, the EPA has acted reasonably in this rulemaking by giving significant weight to the value of international harmonization and to the fact that, in the EPA's judgment, international harmonization would promote ongoing cooperation to control global pollution of PM.
The PM emissions inventory is presented here to provide information on the contribution of aircraft engine emissions to local inventories as context for this regulatory effort. This PM emissions inventory is from the aviation portion of the EPA's 2017 National Emissions Inventory (NEI).
The inventory is developed from using actual operations at airports. The number of aircraft operations or landings and takeoffs affects PM emissions that contribute to the local air quality near airports. The landing and take-off (LTO) emissions are defined as emissions between ground level and an altitude of about 3,000 feet. These LTO emissions directly affect the ground level air quality at the vicinity of the airport since they are within the local mixing height. They are composed of emissions during departure operations (taxi-out movement from gate to runway, aircraft take-off run and climb-out to 3,000 feet), and during arrival operations (approach at or below 3,000 feet down to landing on the ground and taxi-in from runway to gate). Depending on the meteorological conditions, the emissions will be mixed with ambient air down to ground level, dispersed, and transported to areas downwind from the airport with elevated concentration levels.
As described in Section III.A, aircraft PM emissions are composed of both volatile and non-volatile PM (nvPM) components.
“At the engine exhaust, particulate emissions mainly consist of ultrafine soot or black carbon emissions. Such particles are called `non-volatile' (nvPM). They are present at the high temperatures at the engine exhaust and they do not change in mass or number as they mix and dilute in the exhaust plume near the aircraft. The geometric mean diameter of these particles is much smaller than PM
“Additionally, gaseous emissions from engines can also condense to produce new particles (
This section describes the nvPM approximation method we used in the proposed rulemaking, the use of newly available measured nvPM data, and
Measured PM data were not available when the EPA first developed the 2017 inventory. Thus, to calculate the baseline aircraft engine PM emissions, we used the First Order Approximation Version 3.0 (FOA3) method defined in the Society of Automotive Engineers (SAE) Aerospace Information Report, AIR5715.
In addition, as described in sections III.A and IV, volatile PM and nvPM together make up total PM. The FOA3 method for volatile PM is based on the jet fuel organics
The measurement and reporting of engine EIs allows for improved accuracy of engine emission inventories. As mentioned in Section IV.D.2, the regulatory compliance level is based on the amount of particulate that is directly measured by the instruments. The test procedures specify a sampling line that can be up to 35 meters long. This length results in significant particle loss in the measurement system, on the order of 50 percent for nvPM mass and 90 percent for nvPM number.
The EPA led the effort within the SAE E-31 committee to develop the methodology to correct for system losses. The EPA led the development of two SAE standards publications, AIR 6504
The engine exit emissions rate, which is corrected for system losses, is specific to each measurement system and to each engine. The calculation is an iterative function based upon the measured nvPM mass and nvPM number values and the geometry of the measurement system. Manufacturers provide the corrected emissions values to the ICAO EEDB and to the EPA.
When calculating emissions inventories, these corrected EIs are used rather than the values used to show compliance with emission standards as they are more reflective of what is emitted into the atmosphere. These measured EIs are only for the non-volatile component of PM, and an approximation method is still required for quantifying the volatile PM inventory.
As described in Section V.A, an improved approximation method has also been developed since the EPA's 2017 NEI was first published. This new approximation method is needed for modeling PM emissions of in-service engines that do not have measured PM data. The new version of the approximation method, known as FOA4, has been developed by CAEP to improve nvPM mass estimation and to extend the methodology to nvPM number based on the newly available PM measurement data.
Recognizing that the development of the first order approximation method is not static and continues to evolve, while more accurate measurement data and better understanding of the underlying mechanisms will certainly help to improve the estimate further, FOA4 represents the state of the science today. It has been used to update the nvPM baseline emission rates for this final rule.
The calculation of volatile PM has not changed between FOA3 and FOA4 because no improved data or method has become available to inform improvements.
As discussed in the introductory paragraphs of Section V, the PM
The aviation emissions developed for the NEI include emissions associated with airport activities in commercial aircraft, air taxi aircraft,
For aircraft PM contribution in 2017 to total mobile PM emissions in counties and MSAs for the top 25 airports (inventories for aircraft with engines >26.7 kN), see Figure III-1 and Figure III-2 in Section III.E.
We respond to comments on the emissions inventory in Section 7 of the Response to Comments document.
Due to the technology-following nature of the PM standards, the final in-production and new type design standards will not result in emission reductions below current levels of engine emissions. The in-production standards for both PM mass and PM number, which are set at levels where all in-production engines meet the standards, will not affect any in-production engines as shown in Figure IV-1 and Figure IV-2. Thus, the in-production standards are not expected to produce emission reductions, beyond the business-as-usual fleet turn over that would occur in the absence of the standards. The EPA projects that all future new type design engines will meet the new type design standards. There are a few in-production engines that do not meet the new type design standards, but because in-production engines will not be subject to these new type design standards, engine manufacturers will not be required to make improvements to these engines to meet the standards. Therefore, the EPA also does not anticipate emission reductions from the new type design standards.
Most of the in-production engines that do not meet the new type design standards are older engines that already have replacement engines that will meet the new type design standards. There is only one newer in-production engine (an engine that recently started being manufactured) that does not meet the new type design standards, and it does not currently have a replacement engine. Since the new type design standards will not apply to in-production engines, the manufacturer of this engine could continue producing and selling its one in-production engine that does not meet the new type design standards. Market forces might drive the manufacturer of this in-production engine to make some improvements to meet the new type design standards, or chose to bring forward its next generation new type design engine to the market a few years earlier than currently planned. The manufacturer has announced plans to develop the next generation of engines to improve emission levels compared to the previous generation of engines.
All website addresses for references cited in this section are provided in a memorandum to the docket.
As described in Section IV, we are adopting PM mass concentration, PM mass, and PM number standards that match ICAO's standards. As discussed in Section V.C, for in-production aircraft engines, the 2017 ICAO PM maximum mass concentration standard and the 2020 ICAO PM mass and number
As described in Section I.B.2, when developing new emission standards, ICAO/CAEP seeks to capture the technological advances made in the control of emissions through the adoption of anti-backsliding standards reflecting the current state of technology. The final standards that match ICAO's standards are anti-backsliding standards that prevent aircraft engine PM levels from increasing beyond their current levels. As discussed in Section IV.F.2, in that regard, PM mass and number are currently unregulated from aircraft engines and the standards finalized in this action represent a new regulatory backstop of those two new standards. Further, all three PM standards will prevent backsliding by ensuring that all new type design and in-production aircraft engines will not exceed those regulatory levels in the future.
As described in Section IV.F.2, for some manufacturers, new technologies aimed at reducing aircraft engine NO
U.S. manufacturers could be at a significant disadvantage if the United States fails to adopt standards by the international implementation date, January 1, 2023. Also, given the short timeframe from this final action and the international implementation date, there would not be enough lead time for manufacturers to respond to more stringent standards that would require them to develop and implement new technologies.
Aircraft and aircraft engines are sold around the world, and international aircraft emission standards help ensure the worldwide acceptability of these products. Aircraft and aircraft engine manufacturers make business decisions and respond to the international market by designing and building products that conform to ICAO's international standards. However, ICAO's standards need to be implemented domestically for products to prove such conformity. Domestic action through the EPA rulemaking and subsequent FAA rulemaking enables U.S. manufacturers to obtain internationally recognized U.S. certification, which for the final PM standards will ensure type certification consistent with the requirements of the international PM emission standards. This is important, as compliance with the international standards (via U.S. type certification) is a critical consideration in aircraft manufacturer and airlines' purchasing decisions. By implementing the requirements in the United States that align with ICAO standards, any question regarding the compliance of aircraft engines certificated in the United States will be removed. The rulemaking will help ensure the acceptance of U.S. aircraft engines by member States, aircraft manufacturers, and airlines around the world. Conversely, without this domestic action, U.S. aircraft engine manufacturers would likely be at a competitive disadvantage compared with their international competitors.
In considering the aviation market, it is important to understand that the international PM emission standards were predicated on demonstrating ICAO's concept of technological feasibility;
The long-established ICAO/CAEP terms of reference were taken into account when deciding the international PM standards, principal among these being technical feasibility. For the ICAO PM standard setting, technical feasibility refers to any technology demonstrated to be safe and airworthy proven to Technology Readiness Level
The EPA and FAA participated in the ICAO analysis that informed the adoption of the international aircraft engine PM emission standards. A summary of that analysis was published in the report of ICAO/CAEP's eleventh meeting (CAEP/11),
The 2019 ICAO Independent Expert Review document indicates that new technologies aimed at reducing aircraft engine NO
The EPA does not anticipate new technology costs (non-recurring costs) due to the final rule. As described in the introductory paragraph of Section VI, since all in-production engines meet the in-production standards and nearly all in-production engines meet these new type design standards, we project there will not be costs, nor emission reductions, from the final rule. Also, because current in-production engines will not be required to make any changes under this final rule, there will not be any adverse impact on noise and safety of these engines. Likewise, the noise and safety of future type designs should not be adversely impacted by compliance with these final new type design standards since all manufacturers currently have engines that meet that level.
Following this final rulemaking for the PM standards, the FAA will issue a rulemaking to enforce compliance to these standards, and any anticipated certification costs for the PM standards will be estimated by FAA.
As described in Section VI.A, manufacturers have already developed or are developing technologies to respond to ICAO standards that are equivalent to the final standards, and they will comply with the ICAO standards in the absence of U.S. regulations. Also, domestic implementation of the ICAO standards will potentially provide for cost savings to U.S. manufacturers since it will enable them to certify their aircraft engine (via subsequent FAA rulemaking) domestically instead of having to certificate with a foreign authority (which will occur without this EPA rulemaking). If the final PM standards, which match the ICAO standards, are not ultimately adopted in the United States, U.S. civil aircraft engine manufacturers will have to certify to the ICAO standards at higher costs because they will have to move their entire certification program(s) to a non-U.S. certification authority.
For the same reasons there will be no non-recurring and certification costs for the rule, there also will be no recurring costs (recurring operating and maintenance costs) for the rule. The elements of recurring costs include additional maintenance, material, labor, and tooling costs.
As described in Section IV.E, the EPA is formally incorporating the PM aspects of the existing information collection request (ICR) into the CFR (or regulations) in 40 CFR 1031.150 and 1031.160. This action will not create a new requirement for the manufacturers of aircraft engines. Instead, it will simply incorporate the existing reporting requirements into the CFR for ease of use by having all the reporting requirements readily available in the CFR. Thus, this action will not create new costs.
The final standards match the ICAO standards, and as discussed in Section II.C and Section IV.F.1 of this preamble, ICAO intentionally established its standards at a level which is technology following. The final rule takes an appropriate step in controlling aircraft engine PM emissions and prevents backsliding by ensuring that all in-production and new type design engines have at least the PM emission levels of today's aircraft engines. Additionally, this final rule maintains consistency or harmonizes with the international standards and meets the United States' treaty obligations under the Chicago Convention. Also, it allows U.S. manufacturers of covered aircraft engines to remain competitive in the global marketplace by ensuring the acceptance of their engines worldwide (which benefits U.S. manufacturers and consumers), provides uniformity and
In addition to the PM-related regulatory provisions discussed in Section IV, the EPA is finalizing technical amendments to the regulatory text that apply more broadly than to just the new PM standards. First, the EPA is migrating the existing aircraft engine emissions regulations from 40 CFR part 87 to a new 40 CFR part 1031. Along with this migration, the EPA is restructuring the regulations to allow for better ease of use and allow for more efficient future updates. The EPA is also deleting some regulatory provisions and definitions that are unnecessary, as well as making several other minor technical amendments to the regulations. Finally, the EPA is also revising 40 CFR part 87 to provide continuity during the transition of 40 CFR part 87 to 40 CFR part 1031. In this final rule, the EPA did not reexamine or reopen the substantive provisions of 40 CFR part 87 that were merely migrated to the new 40 CFR part 1031 and streamlined or the substantive provisions of 40 CFR part 1030 and 40 CFR part 1031 beyond those specially discussed in the proposed rule. Any comments we received on the substance of the provisions migrated from 40 CFR part 87 to 40 CFR part 1031 provisions, as opposed to comments pointing out typos or inadvertent impacts on substantive provisions caused by the regulatory streamlining, are beyond the scope of this rulemaking.
In the 1990s, the EPA began an effort to migrate all transportation-related air emissions regulations to new parts, such that all mobile source regulations are contained in a single group of contiguous parts of the CFR. In addition to the migration, that effort has included clarifications to regulations and improvements to the ease of use through plain language updates and restructuring. To date, the aircraft engine emission regulations contained in 40 CFR part 87 are the only mobile source emission regulations which have not undergone this migration and update process.
The current 40 CFR part 87 was initially drafted in the early 1970s and has seen numerous updates and revisions since then. This has led to a set of aircraft engine emission regulations that is difficult to navigate and contains numerous unnecessary provisions. Further, the current structure of the regulations would make the adoption of the PM standards finalized in this document, as well as any future standards the EPA may adopt, difficult to incorporate.
Therefore, the EPA is migrating the existing aircraft engine regulations from 40 CFR part 87 to a new 40 CFR part 1031, directly after the airplane GHG standards contained in 40 CFR part 1030. In the process, the EPA is restructuring, streamlining, and clarifying the regulatory provisions for ease of use and to facilitate more efficient future updates. Finally, the EPA is deleting unnecessary regulatory provisions, which are discussed in detail in the next section. This regulatory migration and restructuring effort is not intended to change any substantive provision of the existing regulatory provisions.
As noted in the amendatory instructions in the regulations, the EPA is making this transition effective on January 1, 2023. The new 40 CFR part 1031 will become effective (
The EPA received a comment regarding some existing equations being incorrectly migrated from 40 CFR part 87 to the new 40 CFR part 1031. Specifically, the equations in the proposed 40 CFR 1031.40(a)(1), 1031.50(a)(1), and 1031.90(a)(1), (b) and (c) contained terms that should have been exponents but were instead expressed as multiplicative terms. Given that the EPA's stated intent with the proposed migration from 40 CFR part 87 to 40 CFR part 1031 was to move, restructure, streamline and clarify the existing regulations without changing the underlying regulatory requirements, the equations contained in the paragraphs in 40 CFR part 1031 should have aligned with the corresponding equations in 40 CFR part 87. Thus, these equations in 40 CFR part 1031 have been accordingly corrected in this final rule.
As previously mentioned, the existing aircraft engine emission regulations contain some unnecessary provisions which the EPA is deleting. These deletions include transitional exemption provisions that are no longer available, several definitions, and some unnecessary language regarding the Secretary of the Department of Transportation, as detailed in the following paragraphs.
The EPA is not migrating the current 40 CFR 87.23(d)(1) and (3) to the new 40 CFR part 1031. Both these paragraphs contain specific phase-in provisions available for a short period after the Tier 6 NO
The EPA is also deleting several definitions from the current 40 CFR part 87 as it is migrated to the new 40 CFR part 1031 for two reasons. First, in the effort to streamline and clarify the regulations, some of these definitions have effectively been incorporated directly into the regulatory text where they are used, making a stand-alone definition unnecessary. Second, some of these definitions are simply not needed for any regulatory purpose and are likely artifacts of previous revisions to the regulations (
The definitions that the EPA is deleting and the reasons for the deletions are listed in Table VII-1.
The EPA is also not migrating the current 40 CFR 87.3(b) to the new 40 CFR part 1031, which in effect results in its deletion. This paragraph is simply a restatement of an obligation directly imposed under the Clean Air Act that the Secretary shall issue regulations to assure compliance with the regulations issued under the Act. This is not a regulatory requirement related to the rest of the part, and as such it is not needed in 40 CFR part 1031.
In addition to the migration of the regulations to a new part and the removal of unnecessary provisions just discussed, the EPA is adopting some minor technical amendments to the regulations.
The EPA is adding definitions for “Airplane” and “Emission index.” Both these terms are used in the current aircraft engine emissions regulations, but they are currently undefined. The new definitions will help provide clarity to the provisions that utilize those terms.
The EPA is modifying the definitions for “Exception” and “Exemption.” The current definitions of these terms in 40 CFR 87.1 go beyond simply defining the terms and contain what could more accurately be described as regulatory requirements stating what provisions an excepted or exempted engine must meet. These portions of the definitions, which are more accurately described as regulatory requirements, are being moved to the introductory text in 1031.15 and 1031.20, as applicable. These changes are in no way intended to change any regulatory requirement applicable to excepted or exempted engines. Rather, they are intended simply to more clearly separate definitions from the related regulatory requirements.
The EPA is not migrating the existing 40 CFR 87.42(d) to the new 40 CFR part 1031, which in effect results in the deletion of this provision. This paragraph related to the annual production report regards the identification and treatment of confidential business information (CBI) in manufacturers' annual production reports. The EPA is instead relying on the existing CBI regulations in 40 CFR 1068.10 (as referenced in 40 CFR 1031.170). This change will have no impact on the ability of manufacturers to make claims of CBI, or in the EPA's handling of such claims. However, it will assure a more consistent treatment of CBI across mobile source programs.
The EPA is adopting a minor change to the existing emission requirements
The EPA is aligning the applicability of smoke number standards for engines used in supersonic airplanes with ICAO's applicability. The EPA adopted emission standards for engines used on supersonic airplanes in 2012.
The EPA is incorporating by reference Appendix 1 of ICAO Annex 16, Volume II. This appendix deals with the determination of a test engine's reference pressure ratio, and its exclusion from the U.S. regulations was an oversight. Other Annex 16, Volume II appendices which contain test procedures, fuel specifications, and other compliance-related provisions have been incorporated by reference into the U.S. regulations for many years, and it is important to correct this oversight so the complete testing and compliance provisions are clear.
The EPA is streamlining, restructuring, and updating the exemption provisions currently in 40 CFR 87.50. First, this section contains provisions regarding exemptions, exceptions, and annual reporting provisions relating to exempted and excepted engines. The EPA is migrating the exceptions section concerning spare engines (40 CFR 87.50(c)) to 40 CFR 1031.20(a), with the changes discussed in the preceding paragraphs. The provisions regarding the annual reporting of exempted and excepted engines are being incorporated into the new annual reporting 40 CFR 1031.150. These reporting provisions otherwise remain unchanged. Section 87.50(a), regarding engines installed on new aircraft, and 40 CFR 87.50(b), regarding temporary exemptions based on flights for short durations at infrequent intervals, are being migrated to a new 40 CFR 1031.15. The temporary exemptions provisions remain unchanged, with the exception of adding “of Transportation” after “Secretary” in 40 CFR 1031.15(b)(4) to improve clarity. The changes to the exemptions for engines installed on new aircraft are a bit more extensive, as discussed in the next paragraph.
In 2012, the EPA adopted new exemption provisions specifically to provide flexibility during the transition to Tier 6 and Tier 8 NO
The EPA is adopting some changes relative to the prohibition on fuel venting. The fuel venting standard is
The EPA is adding the word `liquid' in front of the phrase “fuel emissions” in 40 CFR 1031.30(b)(2). That phrase has been interpreted internationally in significantly different ways. Some have interpreted the word “emissions” to mean any emission of pollutants from the combustion process. The EPA's rule that promulgated the requirement to control fuel venting emissions, however, dates to 1973 and was intended to address the issue of liquid fuel being released from an aircraft engine after engine shutdown when no combustion processes are occurring.
The EPA is modifying the applicability date language associated with the standards applicable to Tier 8 engines, as contained in 1031.60(e)(2). The applicability of new type design standards has traditionally been linked to the date of the first individual production engine of a given type, both for the EPA regulations and ICAO regulations. This approach has been somewhat cumbersome in the past because a manufacturer would have to estimate what standards would be in effect when actual production of a new type design began to determine to what standards a new type design engine would be subject. Given that the engine type certification process can take up to three years, this approach has proven problematic during periods of transition from one standard to another. To address this concern, ICAO agreed at the CAEP/11 meeting in 2019 to transition from the date of manufacture of the first production engine to the date of application for a type certificate to determine standards applicability for new type designs. The EPA was actively involved in the deliberations that led to this agreement and supported the transition from date of first individual production model to date of application to establish the certification basis for type certification in the future. This approach is reflected in the applicability date provisions of the PM standards being adopted in this action, consistent with ICAO. The EPA is also adopting it in 40 CFR 1031.60(e)(5) for existing standards applicable to Tier 8 engines as well. This change will only impact engines for which an application for an original or amended type certificate is submitted to the FAA in or after January 1, 2023. This change will have no impact on manufacturers as the existing standards applicable to Tier 8 engines have been in place since 2014, and there are no new gaseous or smoke number standards set to take effect for such engines. Thus, this change in applicability will not result in a change in standards for any engines, and it is solely intended to improve consistency with ICAO and to structure the regulations such that the adoption of any future standards using this applicability date approach will be straightforward.
The EPA is revising the definition of “date of manufacture” by replacing “competent authority” with “recognized airworthiness authority” in two places. The term “competent” has no specific meaning in the context of either the EPA's or the FAA's regulations. However, the FAA does verify compliance of engines certificated outside the United States, as indicated through existing bilateral agreements with such authorities. Also, the EPA is updating its definition of “supersonic” by replacing it with a new definition of “supersonic airplane.” The new definition for “supersonic airplane” is based on a revised definition for such proposed by the FAA in a recent proposed action regarding noise regulations for supersonic airplanes.
The EPA is updating several definitions and aligning them with definitions included in the recent airplane GHG regulations.
The EPA is also addressing an unintentional applicability gap related to the EPA's airplane GHG standards that could potentially exclude some airplanes from being subject to the standards. The intention of the international standards was to cover all jet airplanes with a maximum takeoff mass (MTOM) greater than 5,700 kg. At ICAO it was agreed that airplanes with an MTOM less than 60,000 kg and with 19 seats or fewer could have extra time to comply with the standards (incorporated at 40 CFR 1030.1(a)(2)). With that in mind, 40 CFR 1030.1(a)(1) was written to cover airplanes with 20 or more seats and an MTOM greater than 5,700 kg. However, this means that airplanes with 19 seats or fewer and an MTOM greater than 60,000 kg are not covered by the current regulations but would be covered by the ICAO CO
The EPA is correcting the effective date of new type design GHG standards for turboprop airplanes (with a maximum takeoff mass greater than 8,618 kg), which is currently specified in 40 CFR 1030.1(a)(3)(ii) as January 1, 2020. The EPA did not intend to
The EPA is adopting a minor word change to the existing applicability language in 40 CFR part 1030 to make it consistent with the current applicability language in the EPA's airplane engine regulations as well as FAA regulations. Specifically, the current language in 40 CFR 1030.1(c)(7) refers to airplanes powered with piston engines. The EPA is replacing the word “piston” with “reciprocating” in 40 CFR 1030.1(c)(7) to align it with the existing 40 CFR 87.3(a)(1), the language in 40 CFR 1031.1(b)(1), and existing FAA regulations in 14 CFR parts 1 and 33. This change is for consistency among Federal regulations and to avoid any confusion that may be caused by using two different terms. This change will have no material impact on the meaning of the regulatory text.
Following consultation with FAA, the EPA is finalizing some clarifying changes to the proposed provisions related to derivative engines for emissions certification purposes. None of these edits change the fundamental regulatory provisions at hand, but rather serve to clarify the requirements and improve consistency between EPA and FAA regulations. Thus, these changes will have no effect on obligations of regulated parties or on implementing these regulations. In 40 CFR 87.48, the EPA inserted “for emissions certification purposes” to properly direct the reader to the correct section of the new 40 CFR part 1031. Most of these changes are in 40 CFR 1031.130(a), and include replacing “type certificate holder” with “applicant” to better reflect who would request a designation as a derivative engine for emissions certification purposes (this change was also made to 40 CFR 1031.130(c)), a change from “the FAA may approve” to “a type certificate holder may request” to better reflect the actual process, the inclusion of the phrase “derived from” which was in both 14 CFR 34.48 and 40 CFR 87.48, but was inadvertently left out of this paragraph in the proposed migration of the regulatory text, inclusion of the word “type” to clarify the design that is being referred to, and the replacement of “previously certificated (original) engine for purposes of compliance with exhaust emission standards” with “an engine that has a type certificate issued in accordance with 14 CFR part 33” to more precisely indicate that these provisions apply to engines previously certificated under the FAA's engine certification regulations. The EPA is also clarifying 40 CFR 1031.130(c)(2) by adding “for individual certification applications” and “beyond those,” and clarifying that the FAA should make determinations on using ranges beyond those specified in the regulation consistent with good engineering judgement rather than following consultation with the EPA. Finally, the EPA is revising the proposed definition for “derivative engine for emissions certification purposes” in 40 CFR 1031.205 by replacing a description of the requirements of 40 CFR 1031.130 with an actual reference to 40 CFR 1031.130, and other editorial changes to make it consistent with the changes to 40 CFR 1031.130 discussed in this paragraph.
The EPA is making a correction to the proposed regulatory text of 40 CFR 87.50. In the NPRM, an incorrect reference was included to 40 CFR 1031.11. The correct reference is 40 CFR 1031.20. The text of 40 CFR 87.50 has been updated accordingly.
Finally, the EPA is finalizing minor changes to the proposed regulatory text in 40 CFR 1031.140(f)(1) and (f)(2)(i). As stated in the preamble to the proposed rule, the existing smoke standards and the proposed PM mass concentration standard are all based on the maximum value measured at any thrust level across and engine's entire operating thrust range.
Additional information about these statutes and Executive orders can be found at
This final action is not a significant regulatory action and was therefore not submitted to the Office of Management and Budget (OMB) for review.
This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2060-0680. This rule codifies that existing collection by including the current nvPM data collection in the regulatory text, but it will not add any new reporting requirements.
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. Among the potentially affected entities (manufacturers of aircraft engines) there is only one small entity, and that aircraft engine manufacturer does not make engines in the category subject to the new provisions contained in this document (
This action does not contain any unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any State, local, or Tribal governments or the private sector.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have Tribal implications as specified in Executive Order 13175. This action regulates the manufacturers of aircraft engines and will not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes. Thus, Executive Order 13175 does not apply to this action.
This action is not subject to Executive Order 13045 because it is not economically significant as defined in Executive Order 12866. The EPA believes that the environmental health risks or safety risks of particulate matter, which is addressed by this action, may have a disproportionate effect on children. The 2021 Policy on Children's Health also applies to this action. This action's health and risk assessments are contained in Section III. Children make up a substantial fraction of the U.S. population, and often have unique factors that contribute to their increased risk of experiencing a health effect from exposures to ambient air pollutants because of their continuous growth and development. Children are more susceptible than adults to many air pollutants because they have (1) a developing respiratory system, (2) increased ventilation rates relative to body mass compared with adults, (3) an increased proportion of oral breathing, particularly in boys, relative to adults, and (4) behaviors that increase chances for exposure.
This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.
This action involves technical standards for testing emissions from aircraft gas turbine engines. The EPA is adopting test procedures contained in ICAO's Annex 16 to the Convention on International Civil Aviation, Environmental Protection, Volume II—Aircraft Engine Emissions, Fourth Edition, July 2017, along with the modifications contained in this rulemaking as described in Section IV. These procedures are currently used by all manufacturers of aircraft gas turbine engines to demonstrate compliance with ICAO emission standards.
In accordance with the requirements of 1 CFR 51.5, we are incorporating by reference the use of test procedures contained in ICAO's International Standards and Recommended Practices Environmental Protection, Annex 16, Volume II, along with the modifications contained in this rulemaking. This includes the following standards and test methods:
The version of the ICAO Annex 16, Volume II, that is being incorporated into the new 40 CFR part 1031 is the same version that is currently incorporated by reference in 40 CFR 87.1, 40 CFR 87.42(c), and 40 CFR 87.60(a) and (b). This final rule removes those references to ICAO Annex 16, Volume II.
The referenced standards and test methods may be obtained through the International Civil Aviation Organization, Document Sales Unit, 999 University Street, Montreal, Quebec, Canada H3C 5H7, (514) 954-8022,
Executive Order 12898 (59 FR 7629, February 16, 1994) directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations (people of color and/or Indigenous peoples) and low-income populations.
The EPA believes that the human health or environmental conditions that exist prior to this action result in or have the potential to result in disproportionate and adverse human health or environmental effects on people of color, low-income populations and/or Indigenous peoples. The EPA provides a summary of the evidence for potentially disproportionate and adverse effects among people of color and low-income populations residing near airports in Section III.G.
The EPA believes that this action is not likely to change existing disproportionate and adverse effects on people of color, low-income populations and/or Indigenous peoples, as specified in Executive Order 12898. The information supporting this Executive Order review is contained in Section III.G, and all supporting documents have been placed in the public docket for this action.
This action will not achieve emission reductions and will therefore result in no improvement in per-aircraft emissions for all communities living near airports. The EPA describes in Section III.G the existing literature reporting on disparities in potential exposure to aircraft emissions for people of color and low-income populations. The EPA, in an analysis separate from this rulemaking, is conducting an analysis of the communities residing near airports where jet aircraft operate to more fully understand disproportionately high and adverse human health or environmental effects on people of color, low-income populations, and/or Indigenous peoples, as specified in Executive Order 12898. The results of this analysis could help inform additional policies to reduce pollution in communities living in close proximity to airports.
The EPA additionally engaged with Environment Justice organizations in several ways for this rulemaking, including: (1) contacting members of Environmental Justice organizations to provide information on pre-registration for the public hearings for the proposed rule; (2) contacting members of Environmental Justice organizations when the proposed rule was published in the
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Reporting and recordkeeping requirements.
Environmental protection, Aircraft, Air pollution control.
Environmental protection, Aircraft, Air pollution control, Greenhouse gases.
Environmental protection, Aircraft, Air pollution control, Incorporation by reference.
For the reasons set forth in the preamble, the EPA is amending title 40, chapter I of the Code of Federal Regulations as set forth below.
7 U.S.C. 135
42 U.S.C. 7401
Definitions apply as described in 40 CFR 1031.205.
Abbreviations apply as described in 40 CFR 1031.200.
Provisions related to the general applicability and requirements of aircraft engine standards apply as described in 40 CFR 1031.1.
Fuel venting standards apply to certain aircraft engines as described in 40 CFR 1031.30(b).
Fuel venting standard apply as described in 40 CFR 1031.30(b).
Exhaust emission standards apply to certain aircraft engines as described in 40 CFR 1031.40 through 1031.90.
Exhaust emission standards apply to new aircraft engines as described in 40 CFR 1031.40 through 1031.90.
Exhaust emission standards apply to new aircraft engines as follows:
(a) New turboprop aircraft engine standards apply as described in 40 CFR 1031.40.
(b) New supersonic engine standards apply as described in 40 CFR 1031.90.
(c) New subsonic turbofan or turbojet aircraft engine standards apply as follows:
(1) Standards for engines with rated output at or below 26.7 kN thrust apply as described in 40 CFR 1031.50.
(2) Standards for engines with rated output above 26.7 kN thrust apply as described in 40 CFR 1031.60.
(d) NOX standards apply based on the schedule for new type and in-production aircraft engines as described in 40 CFR 1031.60.
Exhaust emission standards apply to in-use aircraft engines as described in 40 CFR 1031.60.
Provisions related to derivative engines for emissions certification purposes apply as described in 40 CFR 1031.130.
Provisions related to exceptions apply as described in 40 CFR 1031.20. Provisions related to exemptions apply as described in 40 CFR 1031.10.
Test procedures for measuring gaseous emissions and smoke number apply as described in 40 CFR 1031.140.
42 U.S.C. 7401-7671q.
(a) Except as provided in paragraph (c) of this section, when an aircraft engine subject to 40 CFR part 1031 is installed on an airplane that is described in this section and subject to 14 CFR chapter I, the airplane may not exceed the Greenhouse Gas (GHG) standards of this part when original civil certification under 14 CFR chapter I is sought.
(1) A subsonic jet airplane that has —
(i) Either—
(A) A type-certificated maximum passenger seating capacity of 20 seats or more,
(B) A maximum takeoff mass (MTOM) greater than 5,700 kg, and
(C) An application for original type certification that is submitted on or after January 11, 2021;
(ii) Or—
(A) A type-certificated maximum passenger seating capacity of 19 seats or fewer,
(B) A MTOM greater than 60,000 kg, and
(C) An application for original type certification that is submitted on or after December 23, 2022.
(3) * * *
(ii) An application for original type certification that is submitted on or after January 11, 2021.
(c) * * *
(7) Airplanes powered by reciprocating engines.
42 U.S.C. 7401-7671q.
This part applies to aircraft gas turbine engines on and after January 1, 2023. Emission standards apply as described in subpart B of this part.
(a) Except as provided in paragraph (b) of this section, the regulations of this part apply to aircraft engines subject to 14 CFR part 33.
(b) The requirements of this part do not apply to the following aircraft engines:
(1) Reciprocating engines (including engines used in ultralight aircraft).
(2) Turboshaft engines such as those used in helicopters.
(3) Engines used only in aircraft that are not airplanes.
(4) Engines not used for propulsion.
The Secretary of Transportation shall apply these regulations to aircraft of foreign registry in a manner consistent with obligations assumed by the United States in any treaty, convention or agreement between the United States and any foreign country or foreign countries.
No State or political subdivision of a State may adopt or attempt to enforce any aircraft or aircraft engine standard with respect to emissions unless the standard is identical to a standard that applies to aircraft or aircraft engines under this part.
Individual engines may be exempted from current standards as described in this section. Exempted engines must conform to regulatory conditions specified for an exemption in this part and other applicable regulations. Exempted engines are deemed to be “subject to” the standards of this part even though they are not required to comply with the otherwise applicable requirements. Engines exempted with respect to certain standards must comply with other standards as a condition of the exemption.
(a) Engines installed in new aircraft. Each person seeking relief from compliance with this part at the time of certification must submit an application for exemption to the FAA in accordance with the regulations of 14 CFR parts 11 and 34. The FAA will consult with the EPA on each exemption application request before the FAA takes action. Exemption requests under this paragraph (a) are effective only with FAA approval and EPA's written concurrence.
(b) Temporary exemptions based on flights for short durations at infrequent intervals. The emission standards of this part do not apply to engines that power aircraft operated in the United States for short durations at infrequent intervals. Exemption requests under this paragraph (b) are effective with FAA approval. Such operations are limited to:
(1) Flights of an aircraft for the purpose of export to a foreign country, including any flights essential to demonstrate the integrity of an aircraft prior to its flight to a point outside the United States.
(2) Flights to a base where repairs, alterations or maintenance are to be performed, or to a point of storage, and flights for the purpose of returning an aircraft to service.
(3) Official visits by representatives of foreign governments.
(4) Other flights the Secretary of Transportation determines to be for short durations at infrequent intervals. A request for such a determination shall be made before the flight takes place.
Individual engines may be excepted from current standards as described in this section. Excepted engines must conform to regulatory conditions specified for an exception in this part and other applicable regulations. Excepted engines are deemed to be “subject to” the standards of this part even though they are not required to comply with the otherwise applicable requirements. Engines excepted with respect to certain standards must comply with other standards from which they are not excepted.
(a)
(1) This exception allows production of a newly manufactured engine for installation on an in-use aircraft. It does not allow for installation of a spare engine on a new aircraft.
(2) Spare engines excepted under this paragraph (a) may be used only if they are certificated to emission standards equal to or lower than those of the
(3) Engine manufacturers do not need to request approval to produce spare engines, but must include information about spare engine production in the annual report specified in § 1031.150(d).
(4) The permanent record for each engine excepted under this paragraph (a) must indicate that the engine was manufactured as an excepted spare engine.
(5) Engines excepted under this paragraph (a) must be labeled with the following statement: “EXCEPTED SPARE”.
(b) [Reserved]
(a)
(1) Where there are multiple tiers of standards for a given pollutant, the named tier generally corresponds to the meeting of the International Civil Aviation Organization's (ICAO's) Committee on Aviation Environmental Protection (CAEP) at which the standards were agreed to internationally. Other standards are named Tier 0, Tier 1, or have names that describe the standards.
(2) Where a standard is specified by a formula, determine the level of the standard as follows:
(i) For smoke number standards, calculate and round the standard to the nearest 0.1 smoke number.
(ii) For maximum nvPM mass concentration standards, calculate and round the standard to the nearest 1 μg/m
(iii) For LTO nvPM mass standards, calculate and round the standard to three significant figures.
(iv) For LTO nvPM number standards calculate and round the standard to three significant figures.
(v) For gaseous emission standards, calculate and round the standard to three significant figures, or to the nearest 0.1 g/kN for turbojet and turbofan standards at or above 100 g/kN.
(3) Perform tests using the procedures specified in § 1031.140 to measure emissions for comparing to the standard. Engines comply with an applicable standard if test results show that the engine type certificate family's characteristic level does not exceed the numerical level of that standard.
(4) Engines that are covered by the same type certificate and are determined to be derivative engines for emissions certification purposes under the requirements of § 1031.130 are subject to the emission standards of the previously certified engine. Otherwise, the engine is subject to the emission standards that apply to a new engine type.
(b)
(i) Turbojet and turbofan engines with rated output at or above 36 kN thrust manufactured after February 1, 1974.
(ii) Turbojet and turbofan engines with rated output below 36 kN thrust manufactured after January 1, 1975.
(iii) Turboprop engines manufactured after January 1, 1975.
(2) Engines may not discharge liquid fuel emissions into the atmosphere. This standard is directed at eliminating intentional discharge of liquid fuel drained from fuel nozzle manifolds after engines are shut down and does not apply to normal fuel seepage from shaft seals, joints, and fittings. Certification for the fuel venting standard will be based on an inspection of the method designed to eliminate these emissions.
The following standards apply to turboprop engines with rated output at or above 1,000 kW:
(a)
(b) [Reserved]
The following standards apply to new turbofan or turbojet aircraft engines with rated output at or below 26.7 kN thrust that are installed in subsonic aircraft:
(a)
(b) [Reserved]
The following standards apply to new turbofan or turbojet aircraft engines with rated output above 26.7 kN thrust that are installed in subsonic aircraft:
(a)
(2)
(ii) Engines of the type JT3D for which the date of manufacture of the individual engine is on or after January 1, 1978 and before January 1, 1984 may not have a characteristic level for smoke number exceeding an emission standard of 25.
(3)
(4)
(5)
(6)
(b)
(1)
(2)
(c)
(d)
(e)
(1)
(2)
(3)
(4)
(5)
The following standards apply to new engines installed in supersonic airplanes:
(a)
(b) [Reserved]
(c)
(d)
(e)
(a)
(1) The FAA determines that a safety issue requires an engine modification.
(2) All regulated emissions from the proposed derivative engine are lower than the corresponding emissions from the previously certificated engine.
(3) The FAA determines that the proposed derivative engine's emissions are similar to the previously certificated engine's emissions as described in paragraph (c) of this section.
(b)
(c)
(i) ±3.0 g/kN for NO
(ii) ±1.0 g/kN for HC.
(iii) ±5.0 g/kN for CO.
(iv) ±2.0 SN for smoke number.
(v) The following values apply for nvPM
(A) ±200 μg/m
(B) ±20% of the characteristic level if the characteristic level for maximum nvPM
(vi) The following values apply for nvPM
(A) 80 mg/kN if the characteristic level for nvPM
(B) ±20% of the characteristic level if the characteristic level for nvPM
(vii) The following values apply for nvPM
(A) 4 × 10
(B) ±20% of the characteristic level if the characteristic level for nvPM
(2) In unusual circumstances, the FAA may, for individual certification applications, adjust the ranges beyond those specified in paragraph (c)(1) of this section to evaluate a proposed derivative engine, consistent with good engineering judgment.
(a)
(b)
(c)
(1) The test engine may not extract shaft power or bleed service air to provide power to auxiliary gearbox-
(2) Test engines must reach a steady operating temperature before the start of emission measurements.
(d)
(1) The engine cannot be tested using the specified procedures.
(2) The alternate procedure is shown to be equivalent to or better (
(e)
(f)
(1)
(2)
(i)
(ii)
(3)
(4)
(g)
(h)
Engine manufacturers must submit an annual production report for each calendar year in which they produce any engines subject to emission standards under this part.
(a) The report is due by February 28 of the following calendar year. Include emission data in the report as described in paragraph (c) of this section. If you produce exempted or excepted engines, submit a single report with information on exempted/excepted and normally certificated engines.
(b) Send the report to the Designated EPA Program Officer.
(c) In the report, specify your corporate name and the year for which you are reporting. Include information as described in this section for each engine sub-model subject to emission standards under this part. List each engine sub-model manufactured or certificated during the calendar year, including the following information for each sub-model:
(1) The type of engine (turbofan, turboprop, etc.) and complete sub-model name, including any applicable model name, sub-model identifier, and engine type certificate family identifier.
(2) The certificate under which it was manufactured. Identify all the following:
(i) The type certificate number. Specify if the sub-model also has a type certificate issued by a certificating authority other than FAA.
(ii) Your corporate name as listed in the certificate.
(iii) Emission standards to which the engine is certificated.
(iv) Date of issue of type certificate (month and year).
(v) Whether or not this is a derivative engine for emissions certification purposes. If so, identify the previously certificated engine model.
(vi) The engine sub-model that received the original type certificate for an engine type certificate family.
(3) Identify the combustor of the sub-model, where more than one type of combustor is available.
(4) The calendar-year production volume of engines from the sub-model that are covered by an FAA type certificate. Record zero for sub-models with no engines manufactured during the calendar year, or state that the
(i) List the sub-model that was shipped or the most probable sub-model.
(ii) List all potential sub-models.
(iii) State “Unknown Sub-Model.”
(5) The number of engines tested and the number of test runs for the applicable type certificate.
(6) Test data and related information required to certify the engine sub-model for all the standards that apply. Round reported values to the same number of decimal places as the standard. Include the following information, as applicable:
(i) The engine's rated pressure ratio and rated output.
(ii) The following values for each mode of the LTO test cycle:
(A) Fuel mass flow rate.
(B) Smoke number.
(C) nvPM mass concentration.
(D) mass of CO
(E) Emission Indices for HC, CO, NO
(F) The following values related to nvPM mass and nvPM number:
(
(
(
(iii) Weighted total values calculated from the tested LTO cycle modes for HC, CO, NO
(iv) The characteristic level for HC, CO, NO
(v) The following maximum values:
(A) Smoke number.
(B) nvPM mass concentration.
(C) nvPM mass Emission Index with and without system loss correction.
(D) nvPM number Emission Index with and without system loss correction.
(d) Identify the number of exempted or excepted engines with a date of manufacture during the calendar year, along with the engine model and sub-model names of each engine, the type of exemption or exception, and the use of each engine (for example, spare or new installation). For purposes of this paragraph (d), treat spare engine exceptions separate from other new engine exemptions.
(e) Include the following signed statement and endorsement by an authorized representative of your company: “We submit this report under 40 CFR 1031.150. All the information in this report is true and accurate to the best of my knowledge.”
(f) Where information provided for the previous annual report remains valid and complete, you may report your production volumes and state that there are no changes, without resubmitting the other information specified in this section.
(a) You must keep a copy of any reports or other information you submit to us for at least three years.
(b) Store these records in any format and on any media, as long as you can promptly send us organized, written records in English if we ask for them. You must keep these records readily available. We may review them at any time.
The provisions of 40 CFR 1068.10 apply for information you consider confidential.
This part uses the following abbreviations:
The following definitions apply to this part. Any terms not defined in this section have the meaning given in the Clean Air Act (42 U.S.C. 7401-7671q). The definitions follow:
Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that specified in this section, the EPA must publish a document in the
(a) Annex 16 to the Convention on International Civil Aviation, Environmental Protection, Volume II—Aircraft Engine Emissions, Fourth Edition, July 2017 (including Amendment No. 10, applicable January 1, 2021); IBR approved for §§ 1031.140; 1031.205.
(b) [Reserved]